How to run a successful farm diversification

Diversifying into non-farming business ventures is now almost an essential for farmers who want to secure their financial survival.

At Farmers Weekly’s second diversification event in Cumbria farmers who have done just that explained how they went about setting up additional income streams.

Find out what kind of enterprises they set up and advice on how they did it successfully.

See also: So you want to… open a campsite?

Visitors centre

Event hosts Isaac and Kerrie Benson had a window of just 12 months in which to build their Lakeland Visitor Centre as they put in for planning permission.

During that 12-month period, they also had to lamb 900 ewes and calve 100 cows.

The centre is a farm experience based on an auction-ring setting for safe livestock handling and demonstration.

There are also dry stone walling demos and classes alongside wool spinning and craft classes.

See also: Top tips and advice on diversification from farmers

They found getting planning permission was more straightforward than they had imagined, but once they started the building work it became a bit more complicated.

“We uncovered a view that we thought we must preserve, so we had to go back and request a change to the planning permission to achieve that,” said Mr Benson.

This major design change meant that the window was reduced to five months for the actual construction and fitting-out work.

Everything was sourced from within Cumbria, which added cost and time, but also lent the authenticity they were looking for and helped support the local economy.

Footfall

Contrary to what they had expected and despite Cumbria’s huge visitor numbers, footfall at the centre and in the shop and café is about 90% local.

Mr Benson had some initial reservations about showing live animals to schoolchildren and making the link with food on the plate. However, his opening line of “Who likes McDonald’s?” seemed to kick things off fine.

He had some advice about the challenges of working with the public.

“Work out who is best at that – Kerrie is better at problem solving than me – if I get left to my own devices, it usually ends up on TripAdvisor or somewhere like that. Kerrie is more diplomatic.”

Caravan site

Rural surveyor John Welbank turned farmer in 2012, buying a fairly run-down 31ha livestock holding with a small caravan site.

Using his experience of advising other farmers on diversification ventures, he and his wife, Sylvia, have spent the past seven years transforming Ireby Green Farm, near Kirkby Lonsdale, Cumbria.

The farm now receives more than 30,000 visitors a year to its café, farm shop, plant nursery and 40-pitch seasonal caravan site.

More than 20 staff are employed year-round.

Conversions are more likely to get planning permission than new builds but can be expensive because you never know what you’re going to find once you start work, advises Mr Welbank.

“New builds are cheaper, easier and quicker – our timber-framed café building went up in 48 hours.

“It took another four months to fit out.”

Although the farm is outside the National Park, it can be seen from the park so the local authority’s policies take that into account.

Meat, wool, soap and holidays

John Atkinson’s family has been farming in Cumbria for 600 years.

However, Mr Atkinson has also worked outside the farm, in film and for the National Trust for many years.

He believes it’s important for farmers to get off the farm to make links and to get ideas.

As well as running his own Nibthwaite Grange Farm, Mr Atkinson also manages conservation grazing for organisations who don’t want to manage directly the land they have bought or control.

He and Maria Benjamin, who is from an arts background, have developed several strands to their business.

“We didn’t have a lot of cash for investment, so rather than going to the bank, we said let’s see if we can increase profits.”

Their four strands are:

Accommodation

This is on three National Trust sites – a barn, an off-grid cottage and basic camping.

The camping venture helps them control who is coming on to the site as they graze the land around it.

They considered glamping but dismissed it at the prospect of changing sheets in posh tents.

Instead, they boosted the image of what they already have with a “back to nature, technology detox” brand that gets repeat business.

Most of their customers are from London and want to get away.

The barn was converted with the help of Leader funding (a pain, says Ms Benjamin) to holiday accommodation and an area where Ms Benjamin makes soap from Jersey milk.

Wool

Their wool business, Shear Delight, is growing as the specialist single breed, single farm market develops.

Their rare breed wool is exported to Japan and sold online.

Meat

Conventional lamb is sold through the auction market but most of the rare breeds go to butchers and restaurants.

“The meat flavour is different so it’s good for restaurants. It’s a question of picking your market,” said Ms Benjamin.

“You can do boxes, but it can be stressful if the box doesn’t turn up.

“I think it’s more important that people just buy from local butchers – we sell quite lot to local butchers and that has a good response – people want to buy specifically from us.”

Mr Atkinson and Ms Benjamin get three cash incomes from their sheep – meat, wool and skins, with rare-bred sheepskins worth considerably more than mass-market breeds.

Soap

This is made with milk from Ms Benjamin’s Jersey cows and sold 50% wholesale, 37.5% online and at a few Christmas markets, at Tebay services and a few National Trust shops.

In its third year, this strand is growing, has a quick turnround, is more labour intensive but has a good cashflow.

“Each strand is profitable,” said Ms Benjamin.

“We look at what gives us most profit from the least effort.

“If we had stuck to that policy, we would just have done accommodation, but it’s better to find something you like.

“If you like talking to people all day, fine, but think carefully about it.

“We very rarely see the people that are staying with us, it doesn’t impact on our other businesses.”

A questionnaire on why people buy from Mr Atkinson and Ms Benjamin revealed that provenance and the assurance that everything is produced on farm engendered trust.

Motorway services empire

John Dunning and his wife first diversified into holiday accommodation.

In the early 1970s they took a huge leap in opening a northbound motorway services on the M6, which newly ran through their land.

“We were successful but aware that we didn’t have all the skills. We weren’t caterers and we weren’t retailers, but found a partner in a local bakery,” says Mr Dunning.

It was a demanding project, although planning permission was not a problem at that time.

With a farm and a bakery behind the two main businesses, there was not the pressing need to take income out of the services in the first years, so everything ploughed back.

Following the service area, a truck-stop was built, then a motel in 1987, and with M6 traffic heavier than originally predicted, the business grew at about 3% a year.

Since then, the family, which still farms, has developed a southbound M6 services, Gloucester services, the M6 junction 38 truck services, Cairn Lodge services south of Glasgow, and the Rheged Centre, offering arts, food and shopping.

Food business

Mr Dunning stressed the importance of the heritage and provenance of the meat and other products offered in the Westmorland family business service stations, which now number four.

His two daughters, Jane Lane and Sarah Dunning, are the shareholders in the business.  

“We see ourselves as a food business that happens to be situated on a motorway,” said Mrs Lane.

“We give travellers a snapshot of the land they are travelling through.

“Our roots remain embedded in the family farm – we use local suppliers and work with them to produce products. Their success is our success.”

The business has grown to welcome 10 million people a year and employs 1,300 staff.

It also helps suppliers with some aspects of people management and logistics for which a small business could often find it difficult to find the resources, said Mrs Lane.

Success

Business success is identified under several headings – commercial, customer, colleague and community.

People like to feel connected with a place, said Mrs Lane.

“Customer success for us is focusing on that cause [of identifying people with place] and giving our customers a great experience, never losing sight that what were there to enable that experience.

“Customer satisfaction and feedback is monitored through Google review and TripAdvisor.

“Colleague success is doing our best for each other, doing jobs willingly and well, valuing each other and our teams.

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Our sponsor

Thanks to our headline event sponsor Carter Jonas, who enabled us to run this diversification on-farm event earlier this month.

Farmers Weekly had full editorial control of this report.