Understanding the diversification opportunity

A beautiful view can be a big selling point.


What does diversification do for farming businesses? It can mean different things. For some people, it’s the opportunity to add additional complementary enterprises to the current primary production offer on farm, or for others it’s taking advantage of a beautiful view that you know customers will get great pleasure from. Sometimes you can walk past it every day and not see its beauty or its ability to bring joy to others.

However, there are more practical reasons for farming businesses to diversify, namely the opportunity to add additional income streams to the business offer. This builds resilience into a business but can also reinvigorate the existing farming members as they can see a future to get on board with and support.

It often comes alongside the return of the next generation or the family farm or a new family member joining the family business, and that person needs an income. More importantly, they often have great skills to offer to make a success of the diversification, which cannot be utilised in the farming enterprises. These family members can often bring creative thinking, drive and energy and a pair of fresh eyes to the farm business. This professional employment opportunity can often be lacking in rural areas.

So, what to do? There may be old steading buildings on farm to convert to accommodation, an event venue, a farm shop, or even an educational space. There is primary produce to add value to in the form of creating new food and drink products in the thriving independent food retail sector that we now have in Scotland.

There is also the opportunity to take advantage of changes in consumer trends that have emerged as a result of the Covid-19 pandemic, the renewed interest in the general public in accessing nature, rural areas, and the concept of wellbeing tourism. Farm businesses often have these assets in spades: what looks like a grassy bank with a stand of trees around it is someone else’s glade for relaxing in a sheltered spot, with no phone signal, and watching out for the wildlife that goes by

This is not to discount the diversifications that are primary production based, the alternative crops that can be grown for direct sale, the potential for equine liveries, dog walking parks, or even growing hemp for carbon sequestration. These all have the opportunity to introduce different thinking into a family business, to allow new members to thrive, and for the next generation to have a more financially secure future.

So, why should farms consider diversification?

  • creating succession options
  • enterprise –allowing risk management of farm income streams
  • professional development for family members, which can be important in rural areas where other opportunities are limited
  • tourism opportunities such as day-visits or on-farm experiences
  • short supply chains and local food
  • to benefit from alternative markets (for example: equine/alternative crops, such as hemp)
  • optimising the use of your natural capital land and buildings

If you’re thinking about diversification, talk to our food and enterprise team about your options by emailing or visit our dedicated diversification page

Sascha Grierson and Ceri Ritchie
SAC Consulting

Posted by SRUC on 22/09/2022

Tags: Agriculture, Diversification, Food and Drink, SAC Consulting
Categories: Consulting and Commercial