The spread of the COVID-19 virus has forced Minnesota food companies to pivot their business plans and distribution systems to an online focus in order to meet consumer demand, while also allaying safety concerns.
Minnesota is well known for its thriving cattle, turkey, poultry and pork industries, but it also has a rapidly expanding aquaculture sector growing fish across the state.
The Agricultural Utilization Research Institute’s (AURI) 2020 Ag Innovation Partnership (AIP) program focuses on these two topics. Each year AURI sponsors this initiative to spur innovation and long-term economic impact for Minnesota’s agriculture sector. In the fourth year of the program, AURI selected two projects that will drive value for the food and ag industry and help AURI better serve its stakeholders.
“The AIP program is an important piece of the puzzle in terms of activating AURI’s mission to address emerging issues and meet industry needs,” said Jen Wagner-Lahr, AURI’s senior director of commercialization. “In the end, we moved these projects forward based on overall merit and budget considerations.”
The 2020 AIP projects selected include a guide to e-commerce and digital marketing for Minnesota’s food businesses and a report on the state’s aquaculture industry. Both address timely subjects and will have wide-ranging benefits for Minnesota businesses and producers. Further, the selected projects align with AURI’s mission to foster long-term economic benefit through value added agricultural products.
Demystifying E-Commerce and Digital Marketing
E-commerce is a critical and increasingly important channel in a food company’s growth strategy. Industry research concludes that e-commerce grew by 300 percent from 2013 to 2017, and that by 2021 nearly 18 percent of global retail sales will occur online. The COVID-19 pandemic has made online business even more critical as consumers utilized features like curbside pickup and online ordering for restaurant meals and groceries to minimize virus exposure.
This shift in consumer preferences has forced many small and large businesses to adjust and adapt. Companies know they need to have a stronger digital presence, but many questions arise about topics like social media, online marketing, e-commerce platforms and distribution tied to e commerce, said Jason Robinson, AURI’s business development director.
To address these issues, AURI is partnering with Clutch Performance, a Minneapolis-based food marketing firm to develop a toolkit for food entrepreneurs. The research will provide guidance and a concise online learning module to help AURI better share information with clients. Ultimately, Robinson said, the guide will help demystify the rapidly evolving world of e-commerce and digital marketing.
“What we recognized is that there really isn’t a good tool, that was easily accessible, to help Minnesota businesses figure out some of the concepts and strategies in this space,” Robinson said. “It is also clear that the COVID-19 pandemic has greatly accelerated this need in the marketplace. It forced more businesses to shift to an ‘online-first’ model before they were ready or before they knew what they were doing.”
The Minnesota Department of Agriculture is partnering with AURI to provide both funding and thought leadership for this project.
The guide will cover several topics, including recommendations and best practices to develop a company website and overall online presence. It will also address some of the most useful and popular tools, platforms and services that businesses can use to effectively connect with clients as part of a digital marketing strategy. The final section will address e-commerce considerations specific to food and ag businesses, and key factors to best price, sell, store and ship products to consumers.
“The COVID-19 pandemic impacted many distribution channels for startups, small and medium businesses that AURI serves on a regular basis. E-commerce emerged as a viable channel and many businesses scrambled to figure it out. This initiative is intended as a primer to assist companies as they navigate digital marketing and e-commerce channels,” Wagner-Lahr said.
AURI worked with Clutch on previous AIP projects, including a “Packaging Guide for Scaling Food Businesses” and “Food Shelf-Life Guide for Scaling Businesses.” The goal for the e-commerce and digital marketing guide is to create a “one-stop” shop for established and emerging businesses at a critical time, said Dave Miller, Clutch’s vice president of the food practice.
“For a business that is scaling up and ready to expand, so many different options are available for these topics. But many of the resources are scattered and it is difficult to marshal all the information into a cohesive strategy,” said Miller. “For this guide, we are not looking to provide the definitive answer to the myriad of questions a business will have, but rather to help businesses understand the questions they should ask when it is ready to take that step.”
Miller said many food companies know the basics of digital marketing and e-commerce, but often struggle with getting the most out of their efforts. The guide can help businesses streamline and improve their processes in both areas, he said.
“A business can spend $10,000 building a website with all kinds of content and great photography. It can also devote hours and hours to writing posts for several social media platforms,” Miller said. “But before investing that time and energy, business owners need to ask themselves if having an expensive website, or all kinds of content, moves their brand forward? We want to help businesses use these tools effectively to help tell their stories to consumers.”
Building and Enhancing a Food Fish Industry
The second AIP project is a research report on Minnesota’s aquaculture industry. AURI is working with Minneapolis-based marketing firm Russell Herder to develop a guide to aid state planners, producers, retailers and researchers in this field. The report will produce actionable data and market knowledge on the commercially practical business opportunities for trout, walleye, shrimp and more. These new business ventures have great potential to produce new jobs and economic impact in several related sectors.
The published research will serve as a roadmap to help producers grow their operations and market their product. It will also gauge industry readiness, identify public education needs, and highlight key insights to help facilitate better industry collaboration.
As most know, Minnesota has a rich history with fish and fishing, for both sport and food. What is perhaps not as well known is that Minnesota has a burgeoning food fish industry, both wild caught and grown, with many businesses paying good wages in all regions of the state. There is significant opportunity to grow the state’s aquaculture sector according to Harold Stanislawski, AURI’s business development director. To help facilitate that advancement, the aquaculture report will explore common questions facing businesses, barriers to entry, and potential market growth and collaboration opportunities.
“The report will be a guide to help get the industry up and running,” Stanislawski said. “To achieve that goal, we need to address some of the investment, technology, regulatory and processing issues first.”
The first challenge is to assess how big the industry can become. To answer that question, Russell Herder and AURI will attempt to determine how big the consumer base is for raised fish and which pricing models are necessary for producers and retailers to make a profit. Research will pinpoint the current and projected demand of fish and the most popular species of fish in the market. The researchers will also study the existing aquaculture infrastructure in Minnesota to evaluate supply and production techniques. Further exploration will focus on the technology and regulatory framework necessary to help businesses be successful. More specific sections will explore how the byproducts from aquaculture are useful in a valueadded economy, and how Minnesota farmers and producers can contribute in a mutually beneficial way through feed products. Fish have been an important part of Minnesota’s food landscape for many years.
“Besides outdoor fishing for species such as walleye that goes back many generations, commercially viable indoor business opportunities for production of products such as shrimp are expanding, creating employment, economic impact and growth for related sectors in the form of fish feed, fish health and byproducts,” said Carol Russell, the CEO of Russell Herder. “The resulting guide will serve as a resource and educational tool for decision makers, industry, academia and others to expand market opportunities in Minnesota, resulting in a positive shift in public perception, and serving to inspire successive projects with clients and stakeholder partners.”
Upon conclusion, both AIP projects will be published and widely distributed. The research and findings from this work are an important component of AURI’s longterm commitment to catalyzing economic growth in the ag and food sectors, said Wagner-Lahr. The research will also assist AURI to better serve its clients by refining and improving its current service line and expertise.
“AURI’s public domain initiatives are intended to benefit the state’s food and agricultural businesses – to help them navigate the innovation and commercialization process to develop new products and technologies for the market. This in turn leads to economic growth, such as increased sales and revenue, new jobs and investment in equipment and infrastructure,” Wagner-Lahr said.
Ag Innovation Partnership Program
AURI’s AIP program is a competitive process. Each year AURI puts out a call for submissions from businesses, researchers, entrepreneurs and producers, encouraging them to submit a proposal. A panel of AURI staff members reviews and selects projects based on the submissions most closely aligned with AURI’s mission of supporting innovation and creating long-term economic impact. Project selection is based on how they meet an agriculture sector need.
The selected projects receive AURI’s resources, funding and support to help businesses turn their ideas into reality and catalyze innovation in the state’s agriculture industry. All applicants are also required to share in the project cost by contributing at least 25 percent of the dollars, hours or value of the project. Each project selected in 2020 aligns with one of AURI’s core focus areas: biobased products, renewable energy, coproducts and food. The information generated from each project is made publicly available to help producers, entrepreneurs, businesses and agriculture processors.