St John Craner is the Managing Director of Argraian, an independent agribusiness that helps rural companies win through proven, effective sales and marketing strategies. St John grew up in the farmland of Essex and started his career at McCann in the UK before finding his way to the other end of the earth. Here, his career has spanned corporate marketing, as well as agency marketing roles. But his first love is growing rural businesses. And he shares the challenges, the mistakes and the opportunities for those willing to commit to this very authentic category.
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Welcome to Managing Marketing, a weekly podcast where we discuss the issues and opportunities facing marketing, media, and advertising with industry thought leaders and practitioners.
Today, I’m sitting down with St. John Craner, Managing Director of Agrarian: the independent, agribusiness that helps rural companies win through proven effective sales and marketing strategies. Welcome, St. John.
Hey Darren, nice to be here.
St. John, I’m really quite excited because, for me, agribusiness and even rural marketing feel like it’s lower on the scale of what advertising agencies consider than even retail. Retail’s often discarded down to the sort of forgotten bin, and it feels the same for agribusiness. Have you got any perspectives on that?
Yeah, I mean it often is. I mean, often people sort of conjuring up pictures of farmers and food producers as people just hay seeders chewing on barley leaning against the fence posts, who haven’t got much money to rub together, except for the lint in their pockets.
But the reality is, that farmers are a very, very prosperous bunch. They spend a lot of money. They’re the backbone of a lot of economies, even more so, in COVID times where food production and fibre are incredibly important.
So, yeah, it’s often sort of overlooked, undervalued and most importantly, underestimated. So, I’ve always been taught you got to hit it where they ain’t.
It’s part of your blue ocean strategy, I imagine.
Well, yeah, I mean, I can’t take that because that’s someone else’s idea, but the idea is really to find a niche and exploit it and rather go sort of horizontal, go really, really deep on a vertical.
And I come from a farming background and we’ll talk about the corporate gigs, I’ve done the agency life, and I’ve come full-back to farming agricultural kind of industry, which is kind of we’re in, and it’s funny that I’ve ended up there, but I love the people in it. It’s a very honest trade and I think it’s very much underserved and underestimated, so it goes well.
So, let’s start with that growing up in a rural, but it wasn’t rural in Australia or New Zealand, was it? You grew up in rural England.
Yeah, I grew up on the sort of shores of Essex. They always say you can take the boy out of Essex, but not Essex out of the boy. I was fortunate sent away to school, but I grew up on a farm in England, just outside of Epping in Epping Forest.
Small farm and my dad was a director for Dow Getty at the time. And we had had the farm as a sort of side interest really. I think he just upset too many people. So, that’s why we had the farm because, like me, he was one of the most patient men in the world.
And I sort of grew up in an agricultural environment, we had farming neighbours. My dad started off originally selling seed and chemicals and fertilizer and Mamba pro, various objects at him as farmers came up the driveway to collect cans and drums and drench.
And yeah, I’ve been sort of surrounded by it. And I was very lucky I had a really beautiful childhood. A lot of land to live on and then obviously, moved across later on in life to New Zealand where I sort of gravitated to an agricultural environment or an agrarian economy. Again, so I find myself back where I started really.
St. John, before you even left the UK, you actually started a career in advertising. You were working for one of the big agencies, weren’t you?
Yeah, I was. So, it’s kind of weird how it came full circle, but I’ve always been a competitive wee fella and did my school. And the story is actually my old man used to take his truck drivers to Tottenham for the varsity match, which is the cheap version, the cheap seats version. So, he couldn’t afford the England tickets and sorry to mention the word England because it might offend some of your listeners.
And so, dad would take his truck drivers, he’d bring me along and from like the get-go, I was always fascinated why the hoardings were around the stadium and why the hell were they spending money? And I’m showing my age here, but like wheat bread and CASIO and Toyota and Fosters and all these appearances, it’s like, “Well, why are they advertising?”
Like why would someone buy just because they were exposed to some billboards around a stadium? And that really started it, that curiosity. And then I found myself competing for one place against 50 for Bournemouth University, which was the only advertising marketing media degree course of its kind. So, the UK government were throwing money at this red brick college.
I wasn’t smart enough to get to Oxbridge, I missed out. And I went down to Bournemouth because one, it was a course that was unique of its time. And it also had the most sunshine hours and it has sandy beaches. So, it kind of ticked all the boxes.
So, yeah, did that and that really set me up. And that’s where I kind of got into the agency world really. We went through the IPA UK clearing house and did some work for Lowe Howard-Spink as an intern. So, I wasn’t on the farm. I’d catch the train in and then go and work in Covent Garden with those guys and run to the British Library and do their research with the new business pitches like a little intern, and then enjoy London by night, and then go home and come back.
And I did that and then finished my degree course and ended up getting picked up in the agency sort of milk round, really.
And was it the same selection criteria: sunlight, good beaches that got you to New Zealand? That’s halfway around the world, by the way.
Yeah, I know. It is a long way. It’s a long plane ride or two, as I recently worked out again when I saw you. But I met my wife actually in Australia and I was backpacking, a grubby little English backpacker doing my PADI dive ticket and going through life and life was pretty simple then, Darren, you remember the days.
And I then met my wife and went over to New Zealand and thought it’s a pretty cool place. And it reminded me a lot of home, actually; very agricultural, very rural, rugby, farming, lots of big open spaces. I’ve never really been a city boy. I’ve always been sort of provincial and play rugby in different provincial centres.
And so, yeah, and then picked up agency world there and then picked up some client side opportunities because I don’t know what you think, and we might go on a tangent, but it’s really interesting working agency side and then going client-side. And I really wanted to kind of balance my career in that regard. So, I’ve done a bit of both.
I think it’s interesting talking to people that have either gone just agency or just client compared to those that have actually been on both sides. And you’ve worked for some really quite substantial corporate businesses: Westpac, New Zealand Post, and Contact Energy in the marketing area. What was the biggest lesson for you or what were the biggest differences when you first went from the agency side to being a marketer in an organization or corporation?
Great question. The first thing is that agencies think they’re close to the decision-making and they’re not. I think the whole reason I went client-side to round off my experience was to really understand how that environment, that corporate environment operates; the hierarchies, business cases, structures, systems, and strategy.
And the biggest insight I got pretty early on at my days at Westpac and Contact Energy, which is owned by Origin Energy, or was in Aussie, was agencies think they’re really close to the decision-making and influencing decision-making and they’re not, or we found we weren’t with our agencies.
And so, you’re much closer talking to the GMs, doing the strategy, working on economic business cases. I mean, I know you’re a big fan of talking about outcomes rather than outputs, but everything was a business case. Everything was commercially justified.
We did brand work where Contact Energy, we would actually correlate brand favorability against customer churn and try and see if there was a correlation. And so, we kind of took the agency kicking and screaming down that road because obviously, if our churn went down because our brand favorability went up, then we were going to spend more money with that agency.
So, yeah, that was the biggest insight really just that agency side, you think you’re close, you think you’re influencing, you’re really close to decision-making. The reality is you’re not.
Yeah. And it’s-
Because there’s so many layers.
Well, it’s interesting as well that those three big organizations in many ways are all service providers rather than package goods. Banking, logistics, posters, logistics, energy, and utilities which is a very different relationships and a different way of working as a marketer compared to say, traditional consumer package goods, which if you listen to the sort of university of marketing teaches this very long-term planning, whereas service industry seem to work on much shorter cycles.
I remember talking to bankers and insurance companies and I’d talk about their annual plans and most marketers would say, “We’re lucky to have a 90-day plan.” Was that your experience?
I think with Post and with Contact Energy and with Westpac, were all kinds of what you call grudge purchases because you didn’t have a choice. You had to have utility, you had to have a bank and you had to use the postal system when the postal system was kind of worked.
So, it was very much more the kind of brand positioning end, share market share as opposed to that kind of granular units, sales, lead generation. So, it was much more the macro kind of brand level. So, my marketing experience was more at the sort of brand positioning level and we were desperately trying to correlate that to attributable, accountable lead generation.
Like how many customers did we get? How many did we lose? Share of what opportunity, did we get them as a first home buyer? Can we then get their credit card? And then can we expand that customer relationship further?
So, I mean all of them were grudge purchases and everyone kind of hated us. So, it was like how do we get them to hate us less? And I’m being terribly impolite and a disservice to them, but that was the kind of thing, is just being liked more. And obviously, if they liked us more, maybe they would hang around and choose us and stay with us for longer.
And was it sort of your childhood and the happy memories of growing up on the farm that sort of came back to you, or what was it that got your focus from what are quite corporate roles that you had both on the agency and client side, because you even had time as the Head of Marketing for, was it Distinct Communications for two or three years? You’ve had quite senior roles. What brought you back to rural and agricultural marketing?
Well, I think it’s really important that everyone experiences corporate. I think it’s a really important part of a career for people coming through, particularly people that have worked in agencies. The best advice I got from my group account director Y&R, was like, to go and get a client role and work out their environment, their world, what they’re about and spend a few years there. And that was really good advice and it served me really, really well.
But going back to the sort of agricultural-agribusiness sector and farming sector I wanted to kind of niche down. And I felt, to be honest, corporate didn’t suit me. I’m a farm boy who doesn’t really live in the city and we just don’t sort of tolerate the sort of the corporate way.
And as a result, I didn’t stay in Corp for too long. I mean I moved out of London and played my rugby in Cirencester pretty quick, because I found London pretty full-on. But it was a rite of passage, I had to do it. And sometimes, you got to work out what you don’t want to do to work out what you do want to do.
And so, I ended up in agriculture and rural because it’s such an important sector and it’s such a neglected sector. And I think you’ve also got to do something that you love doing, and then that whole idea of career capital and following your passions.
But you really got to kind of choose your tribe, like who you’re into and who you walk over water for. And having come from a farming background, I’ve known farmers, I’ve grown from rural communities. I’ve lived and worked and played in rural communities.
I like rural people. I like country folk. It’s not that I don’t like city folk, I love coming to the city. I love my city fix as well, it’s always exciting. But I find there’s a real, more of a deep, genuine persona attached to rural people because often, it was described as rural communities are close, but not closed, but everyone thinks it’s the reverse, that rural communities are very closed off.
They’ll look you up and down in the pub when you turn up and who the hell are you, but once you work out who they are and how they check and what they’re about and you give them their due respect, which a lot of people don’t, because you’ve got to remember like most farmers or dairy farmers, Darren, could probably buy you and me five times over. Maybe not you, but definitely me.
And they’re very modest, they’re very humble. And that kind of sat with me because there’s a lot of kind of puffery, a lot of insecurity in corporate, same in the agency world. And I just wanted something that was more genuine, more authentic, where it was kind of my kind of people and they say your vibe attracts your tribe, so to speak. So, I kind of found myself gravitating back to where I came from.
There is a danger, isn’t there? More from a corporate and/or a large agency sense of really not either being in touch or engaged with the consumer. Other than perhaps seeing some research reports or God forbid, attending some focus groups, people are inclined to lose touch with what it actually means to be a customer of particular brands, don’t they?
Oh, they do. I mean, we see this all the time that oh, I spent time on the family farm the holiday, so I must know rural, I must know agribusiness. And you hear this from agencies that have tap on rural and agribusiness, because they want to crack at a piece of rural marketing, like a big dairy process or mow process or feed for whatever, seed.
And I think one of the things is you have to be from the market to know the market, and you can’t pay lip service because you get found out and you have to go a million miles deep and you really … isn’t it ironic that marketers … I mean, you need to know your market but so few do because they don’t take the time to immerse themselves in their customer’s world.
Look, I think the marketers that have, like you, made a commitment to a particular category, go very deep very quickly over time. I think it’s the ones that move around. You do have to spend – it’s quite a significant amount of time and effort to really get under the skin.
I used to joke to people that when I moved from medical science to advertising, people would say, “Why?” And I said, “Well, my boss at the time gave me the opportunity to do a PhD.” And the worry for me was that I’d end up an expert in a very narrow field, but it would be a mile deep.
And they say, “Well, what about advertising?” I go, “Well, that allows you to be an expert in a field that’s a mile wide if you’re happy just being an inch deep.” And I think that’s one of the things about advertising, that in some ways, attracts people that have got a curiosity across many different areas rather than necessarily applying it to a very focused and deep knowledge in a particular area.
And I know that’s a generalization, but generally, I’ve found many people think that way.
Well, it’s funny you say that because you’re talking about generalization. So, the analogy I always use is do you want to be the cardiologist or the GP? So, we know that doctors today are — we’ve got Dr. Google sort of challenging what was the traditional mainstay of communities, the doctor. And we don’t believe our doctor’s advice these days.
So, what happens when the doctor’s got a real problem? They send you to the specialist. So, I think being the cardiologist, not the GP, being the specialist, not the generalist actually serves you a lot better. It’s scary to narrow down to a niche because you worry about, “Oh, is it going to be boring? I’m going to be working on the same brands, talking to the same kind of customers.”
But do you think the best-paid cardiologists or oncologists in the world get bored? Do you want your cardiologist who’s also an expert in pediatrician or podiatry? You don’t. You want them to be the very best.
So, yeah, I think being a specialist actually serves you a lot better than being a generalist because you’re a jack of all trades but master of none.
So, since you’ve been focusing on agribusiness, what would you say is the big differences? Because you’ve got this corporate experience as a marketer, you’ve got the agency experience over the years mixed in with that.
When you came to agribusiness, did you have some preconceived ideas that perhaps have been debunked or you realized they don’t give you the mileage that you thought they would?
Well, I suppose like again, coming from the sector, my eyes weren’t closed. I’ve hung around farmers and they’ve been our neighbours in the community for years when I grew up. So, I had a bit of an idea, I think.
But I mean like agribusiness doesn’t separate itself from being corporate. There are some very big corporates. You look at the John Deeres, the Fonterra’s, then you’ve got all the rural real estate guys, the fertilizer companies, these are really, really big businesses in their own right.
Depending on where you’re listening, the GDP of any country, some countries is predominantly agricultural and food and fibre production.
I’d just pull you up there though, St. John, because like take Fonterra: Fonterra is a massive dairy business. But it has a consumer front that is promoting its brands and that’s the one the agencies are attracted to.
So, when we’re talking about agribusiness, I’m really interested in getting some sort of definition from you as to what’s the difference because any agency listening to this would say, “We love food businesses. We love Nestle, Mondelez …” who else is there? “We’d love any of those pieces of business because they’re really rich and exciting B2C advertising opportunities.”
Whereas I think most people, when they talk about agribusiness, are not thinking about it as B2C, they’re thinking more as a B2B opportunity. Is that a fair assumption?
Yeah. It’s bang on and I’m glad you reminded me because it’s almost a B2F, isn’t it? Business-to-farmer. And when you talk about agribusiness and some people spit between agriculture because they say farming is so last century and it’s food production today. But in order to get food production, you need a farmer.
So, agribusiness works at the farmer end and then consumer works at the food production end. So, you’re absolutely right, that’s the distinction. So, when it comes to agribusiness, it’s going deep on understanding that farmer’s psyche. It’s not like I’m a pharmacologist if there is such a term, but actually really getting inside the brain of your buyer, your specific ideal buyer, which is a farmer, which could be a low order share milk or a 50/50 share milk or dairy milk or a farm manager, farm owner.
So, yeah, when I talk about agribusiness, I’m working for companies that want to sell to farmers and farmers have very big chequebooks.
Well, it’s an expensive business as well. They make good money, but they also have to invest significantly. And it’s an incredibly risky business as well, because largely at the whim of, first of all, the environment, the weather, which has become more and more unpredictable, but also the marketplaces.
I mean, in Australia, we saw the Chinese market put bans on things like barley, lobster and the like, and wines, and it decimated those categories initially because so much of it. There are significant risks associated with agribusiness, isn’t there?
There is. I mean, it’s not just weather, it’s schedule prices, it’s trade wars, currency. There are so many things that a farmer can’t control. So, the best advice I got from some of farming panels is the best farmers control what they can control, and they call it controlling the controllable and that whole locus of control.
But the reality is most farmers are price takers, not value makers. So, they have to take what’s there and it is, it’s a high risk, it’s very volatile. You have a good season, you have a bad season, schedule price, payout price changes, particularly. So, that adds a lot of their ability to … you’ve got to understand those nuances and understand the pressures from input costs.
So, you think about the input costs of farmers at the moment; nitrogen or urea fertilizers at $1,400 a ton. This is Aussie or New Zealand, and it used to be 600. So, we are talking about increasing food prices as consumers, but farmers are hitting massive input costs. But if you don’t understand that stuff and you’re trying to sell a farmer something, you’ve really got to get that value tuned in because they’re facing massive input costs and that is squeezing their margins.
So, then you have to have a different conversation because anyone can sell anything to farmers in the good times, it’s being able to sell something to them in the bad times. And it’s very volatile.
So, for big agribusinesses, and I’ll go back to Fonterra as well, because in some ways I know it was owned by the co-ops, the dairy co-ops were really popular. They’ve all become corporatized. Most of them have ended up either being bought or they’ve floated on the stock exchange.
And so, we’ve seen now a situation where the dairy farmer that you were talking about before no longer has that influence or control over the processor. And so, they’re producing milk and they’re getting paid by the litre based on whatever the process or contracts they met. That must also have a huge impact on farmers as well.
Yeah. I mean, I’m not an expert on the corporate model, but there are a lot of fertilizer companies or dairy companies that run on the coorporative model because farmers, in terms of agency and autonomy, they are right at the end of the scale.
And what I mean by that is they want to be their own boss. They don’t want to be controlled and as a result, they want to try and own and get dividends back. So, whether it’s Nutrien or Elders or Farmlands or PGG Wrightson, rural retailers — they have a cooperative model where the dividend is returned to the farmer, I mean, farmers even have their own vet clubs.
They own the veterinary practices to keep those vets in their communities and then they take a dividend from the proceeds, from the building, from the valuation, from the medicine, from the prescriptions, et cetera, but ultimately, farmers are control freaks, Darren, just like all of us.
They want to control everything they possibly can, but there’s a limit to what they control and the good ones work out that, okay, I can only control this, so I’ll just focus on what I can control and what I can’t and cooperative model is changing.
The problem with Fonterra and I’ve been on record saying this, is they’re trying to run two business models at the same time and that’s what really bugger them up. They’re trying to be a consumer brands business and they’re trying to be a wholesaler milk procurement business, and this is the same for others.
And they fall between two stools and there’s a lot of discussions, a lot of commentary in the media. And we won’t bore our listeners to deaf on this, because we go deeper on other stuff, but Fonterra, it’s like they’re straddling two horses. And as a result, they’ve tried to do trading amongst farmers, and float more of it on the socket exchange, but it has been a mess.
I just want to pick you up on something that you said earlier, which is, that those corporate marketing roles that you had was very much focused on brand, and brand building and making people like the brand because as you said, in many ways, it was an essential grudge purchase that people were making in those particular categories. And I also noticed in the description of your business, Agrarian, you talk about proven, effective sales and marketing strategies.
Now, that’s also something that’s quite different because when we talk to advertising agencies working with say, consumer package goods and food companies, they’re primarily talking about brand and advertising as a tool to drive brand awareness and brand values.
But you’ve actually, and I’m assuming it’s deliberately, built sales and marketing into your proposition. What is it about your philosophy or the category of agribusiness that makes it so important to have sales as part of that mix?
I’m glad you asked because the thing is we often see marketing and I’ve worked in agencies, I’ve been privileged to work in agencies in corporate and there’s not enough attribution. It’s very simple; either the farmer’s buying something from you or they’re buying it from someone else. They don’t generally care so much about brands. Yes, that’s a generalization.
At the end of the day, we are measuring success by did the farmer buys the fertilizer, the feed, the seed, the tractor, the raker, the tedder, the mow — what they buy? And we’re measuring success in a much more granular way.
So, what we’re trying to do is like marketing to me is sometimes it’s just, it’s a bit … when I meet rural companies that have worked with agencies, they’ve been burnt and bruised with the dark arts of what they call the muck and mystery of agencies, who’ve gone in there, pretended that they’ve known the business, but they haven’t.
They paid lip service to it that rural companies then paid that agency to learn on the job. And I spill some beans as well so we can get this sort of fired up a bit, is that sometimes those agencies because rural isn’t their core competency and there’s a very few that are (there are a few that are, but not many), is they lean on the rural media companies to teach them about rural.
So, the agency world struggles because they can’t get granular about attribution and accountability. And in farming, they live or die not based on macro factors. It’s like how much yield did I produce? How much dry matter did I produce? How many milk solids do I produce? What was my live weight gain? So, it’s about measuring things and farming is very much about inputs and outputs.
So, the same with marketing is okay, I spent a bunch of money on marketing, what return did I get? You’re using a farmer’s value equation there, inputs equal outputs. So, you can’t just bury some money in there and expect not to get an outcome. And I think that’s what’s made me really move away from that traditional kind of agency model where I even hate the word “agency,” to be honest, Darren, because of the connotations it kicks up because of the lack of duty of care or pastoral care in this sense.
They don’t care about getting the results. And you can’t do that in rural because memories died very, very long in rural. It’s a very, very tight community. You can’t do that. You can’t burn and bruise and play the numbers games in rural.
And is that also because relatively speaking, compared to consumer marketing where in any market, there’s potentially millions of consumers, rural’s actually, to your point earlier, quite a tight community or a smaller community, but they’re all connected in many ways. And so, if you burn any part of it, it has long-term brand impacts or reputational impacts.
It does. It’s kind of self-governing. It keeps everyone honest. We’ve had situations where people turn up and say, “Oh, can I talk to the boss?” This is to the wife of the farming household. This is like a bank that we were training and you’ve just basically alienated 50% of your market and you’re probably not going to get another look in because usually, that farming wife is the CFO or the CEO of the household and she’s going to bugger that: “I’m the boss, you haven’t given me the respect I deserve. So, you can off down the driveway in your Ute and you won’t be back here for another 10 years to get a look in.”
So, there are some really bad mistakes that get made and I’m not going to talk to you about the importance of rural women and agricultural women because there are plenty of people better positioned and qualified to talk about that.
But you’ve got to understand that rural, you can’t play a corporate game with rural. They are a different beast. It’s not a numbers game. There’s a lot of loyalty and you need to be a man or woman of your word. You need to deliver on what you do because otherwise, you get kicked out of the community. It’s as simple as that. You just can’t play the big numbers game. You’re right, they’re all interconnected.
So, it’s all about being authentic, I guess. Actually, delivering as a brand or a business is authentic in all your dealings with your customers.
Well, absolutely. It’s back to what I said at the start of our conversation, is that I gravitated back to rural because I saw them as authentic, real, genuine people with an honest trade of like I spend this money on a crop and animal to get this result and I’m just applying the same philosophy and same principles of the business here.
So, yeah, it’s not like corporates are dishonest or city folk are different, but it’s faster. It’s more transactional and it’s not as deep. So, with the rural, you’ve just got to be more … I think there’s a greater responsibility for rural and yeah, you hold each other to account because it’s such a small community. They’re all connected and so, you got to do the right job and you got to do the right thing by them. You can get away with it in the city, you won’t get away with it in the country.
Well, and I think it’s a numbers game because if you’ve got a large customer base, maybe some people play the, if I’m upsetting one or two, that’s a small percentage, but to your point, in this particular case, it’s actually significant because they are so well-connected.
And you might say I’m being a pedant here, but I do think that the order that you put it in of effective sales and marketing strategies in that order, is actually arse about. And I say that because I personally believe that marketing comes before sales, in that establishing a brand or a reputation, actually opens the door and makes sales easier.
But do you have a different perspective because some people say to me, no, sales come first and marketing is the support to it.
Yeah, good pickup. I probably transposed it, so I’ll give myself the grace. The reality is marketing gets a bad rap because of a lack of attribution accountability. Sometimes, I can’t get deals through because marketing is a trigger word that activates and arouses boards in the wrong way.
And so, we actually call it sales support. And I actually think that basically marketing is subservient to sales, Darren, and is a servant to sales because marketing should generate qualified leads that the sales team can then close, but they’ve got to work together.
And the problem is most agencies don’t want to talk about sales. They just want to talk about marketing because marketing is way sexier. Who wants to talk about sales? Even the word sales kick up these horrible connotations, but the lifeblood of any business is sales.
So, marketing has to work very closely to support the sales team with the insights, the leads, the positioning, the lead generation, with the content to then create an opportunity to have a conversation to close a customer.
Okay. But you mentioned before, you started reeling off some brands like John Deere, there are fertilizer companies like Incitec Pivot, they’ve all built brands that have reputations that must give them some sort of advantage in the marketplace or is it all commodity and commoditized?
Look, that’s a good one. I mean, the reality is it depends on the behaviour of the brand, isn’t it? Like you can choose to be a commodity. The price differential between a New Holland Tractor and a John Deere tractor, I mean a John Deere tractor is a conspicuous fitness signal. It’s I’m a successful farmer, so I’m going to drive a green and gold tractor as opposed to a blue and yellow one.
So, the reality is that … we probably haven’t got enough time to run commodities versus brands, but what I would say to it is that commodities don’t understand brand. They’re just selling on price, they’re not selling on any emotive or value or any psychological factors. But the reality is you do need to have the brand space, but you also need to then convert that brand marketing into some kind of sales attribution.
Obviously, your brand position is going to hold up a price premium. So, if you’re pulling a brand together, you’ve got to make sure the positioning, this is why people pay more for Mercedes versus a Suzuki Swift. We know that, but the Insatechs, the John Deeres, the big, the Nutriens, the Elders, it’s really, really hard for them to play in the brand space because farmers’ mindset is commoditized because they are selling commodities as well. They’re selling on the futures market.
So, it’s really, really hard, but you still see those brand dynamics at play. And so, there’s a place for brands in rural, but you’ve also got to ground truth. You’ve got to get lead generation off the back of brand. So, the positioning has got to support the price which has got to support the lead generation. So, why should I buy it from you? It’s not just a rational decision, it’s an emotional decision too.
And then if you can build the brand, then you can hold the premium and you get yourself away from that commodity trap. But it’s really, really hard because farmers are in a commodity mindset: give me this generic chemical, give me this seed, give me this fert, they buy in commodity. So, it’s very hard to break out of it. So, there’s definitely a place for brand, but you’ve also got to get the sale at the same time.
It’s an interesting framework that you’re sharing there because there are not many farm brands that have worked beyond a very niche opportunity. Like we’ve seen particular farmers, dairy farmers, beef and cattle trying to create highland beef and things like that to create brand awareness and hopefully, break out of that market commoditization of selling by the kilo or the ton or the, whatever.
But it’s a really tough thing to do because I mean, one of the big struggles is actually being able to guarantee supply. And one of the things a brand needs is to be able to guarantee supply. So, it’s interesting that that same mentality of creating and selling your product as a commodity on a commoditized market also goes through to the way they purchase. It makes sense.
I mean, there are a few success stories in there. I mean, I did a bit of this when I was at Lincoln doing my catalogue, and Icebreaker has done a great job with fir and wool, with merino wool and they’ve obviously got bought up. And I work with a client here, Atkins Ranch here in New Zealand and they supply through to whole foods, Amazon, and they get really good premiums for their food producers because they hit certain grades and certain specifications that that particular customer wants.
The thing is the way that you get out of the commodity trap is understanding … we’ve talked about food production and consumers being separate from farmer and food producer. There’s a line of sight between the two of them and that’s where you make the premiums and that’s where you escape from the commodity trap.
Because what they’re doing is they’re going, “Actually I know how my food is produced. The animals had good welfare, they didn’t use a bunch of chemical or timber treatments on their fencing, so therefore, I’m going to pay more for it.” But those success stories are far and few between, it’s still very much a commodity market and it’s a market share kind of play and like price.
So, the marketing maturity of rural is still quite immature and unsophisticated generally. And that of rural marketing managers just by the way in which they spend their money in sort of big dick swinging competitions at field days and such. You see a lot of immaturity. There’s a long way to go, Darren, to get … like rural marketers could learn so much more from their consumer cousins.
Yeah, absolutely. Look, St. John, it’s been terrific having this conversation. You’ve reminded me of some of the big challenges food producers have. And look, you operate across Australia and New Zealand, I’m sure you’ve had the conversation as well with many of your clients around the strength of the Australian and New Zealand brands for those food producers, yeah?
Yeah, very much so. I mean, you guys do a great job on the wool side, on your meat side as well and little old New Zealand holds its own as well and flies that flag. I was obviously over in the UK and I walk into Tesco’s down the road from the farm and the UK farm is front and centre of UK beef.
So, that whole providence story is a big one and there’s a lot of storytelling in that. But yeah, it’s still a big business for these countries, to these agrarian economies. And so, it’s something that obviously agencies would be well-served if they understood and took the time to understand that market better.
Well, St. John, we’ve run out of time. I’ve been talking with St. John Crane, Managing Director of Agrarian. Thank you so much for joining us.
You’re welcome, Darren. It’s been a pleasure.
Look, I’ve got a final question just before we finish up, and that is where do you see the big players coming in the agribusiness? Where should people be looking?