EP1/7 : The road to successful development of an AgTech solution
How to Successfully Position Your Product in the Agricultural Market?
When launching a new product in the AgTech space, excitement can easily lead to missteps, especially if there’s a lack of deep market understanding. I’ve experienced this firsthand, and it’s precisely this experience that led me to create AgTech Market. Now, I place significant emphasis on thorough market analysis before entering any new market.
👀 Previous episode (Episode 0/7): Is the AgTech Industry in Crisis ?
Founded in 2022, AgTech Market specializes in bridging the gap between agricultural innovation and real-world application. We help agricultural machinery manufacturers adapt to evolving AgTech trends by providing tailored support, from market analysis to product development and go-to-market strategies. Our mission is to make AgTech solutions accessible and effective, driving the adoption of technologies that truly meet the needs of farmers and manufacturers alike. Discover how AgTech Market's can help you.
⚠️ Never underestimate your market analysis!
My Experience: A Lesson in Market Mismatch
A few years ago, I worked for a pioneering start-up in the AgTech sector and I was convinced we had the perfect solution to revolutionize the industry. I was confident, enthusiastic, and worked tirelessly to bring the product to market, but after entering, I quickly faced some hard realities. This experience taught me the absolute necessity of conducting a thorough market analysis before launching any product in a new market.
Here’s where I went wrong:
No clear idea of the size of my real addressable market: I hadn’t done enough groundwork to understand who my true potential customers were. While I had access to global market figures, I lacked the detailed insights needed to grasp what share of the market was truly addressable. Which market should I focus on ? Which crops ? And how big is that market ?
Unclear value proposition: Although I believed in the innovation of my solution, I didn’t fully comprehend the gap between the product, which was designed for the European market, and the specific constraints of the new markets I was targeting. The product wasn’t mature enough and didn’t align with the actual needs of these markets.
No understanding of farmers' production costs and working methods: The price of my product was too low compared to its true value. In reality, I could have charged 3 to 4 times more without significantly impacting my clients, as they were saving considerable amounts of energy and resources thanks to our service. It took me time to realize that the value generated for farmers—through cost savings—could have easily justified a higher price from the start.
These mistakes made the deployment of the solution far more challenging than necessary. However, they’re just part of the broader picture of what needs to be analyzed when entering a new market. Since then, I’ve integrated these lessons into my approach, making sure to conduct a comprehensive and thorough analysis before launching any new product.
🔍 How I Approach Market Analysis Today: Key Steps to Success
Over time and the projects, I’ve developed a market analysis method that has proven to be effective in helping AgTech companies, start-ups, and even larger corporations position themselves correctly in the market. Here is the analysis process I recommend to follow before entering any new market:
🎯 Understand and Size Your Targeted Market
Before launching any AgTech product, it’s critical to have a deep understanding of your targeted market. This step lays the foundation for your strategy and influences key decisions about product design, marketing, pricing, and scaling. Here’s what you need to consider :
👥 Who are your potential customers?
Identify your target segments: Are you targeting large commercial farms, smallholder farmers, cooperatives, or specific industries (e.g., dairy, row crops, orchards, vineyards )?
Geography matters: Where are these customers located? The needs of a farm in Europe may differ significantly from those in Australia or North America. Even within regions of the same country, a difference can exist !
Customer persona: What are the characteristics of your ideal customer? This includes their farm size, budget, access to technology, and openness to innovation.
2. 💡 What problems are you solving for them?
Pain points: What specific challenges do your customers face that your product can solve? For example, are you helping them reduce labor costs, increase yields, or cut down on inputs like water or pesticides?
Value proposition: How does your product create value? Does it save time, money, or resources? The answer to this will help you communicate your solution’s value clearly and quantify it !
3. 📈 How big is your addressable market?
You need to quantify the market to understand its potential. This involves looking at:
Number of potential customers or number of hectares (how many farmers / ha fall into your target segment?).
Revenue potential: How much could these customers spend on your solution annually ? Multiply this by the number of customers to estimate the total addressable market (TAM).
Growth potential: Is this market growing or shrinking? Look at trends like increasing demand for automation, sustainability, or precision agriculture.
Real addressable market share: Consider how much of this market you can realistically capture in the first few years, in the next 5 years. Serviceable Obtainable Market (SOM)
4. 💵 What’s the purchasing power of your customers?
Budget and willingness to pay: How much are your customers able and willing to invest in new technology? For example, smallholder farmers might be more price-sensitive, while larger commercial farms may focus more on long-term ROI.
Financing availability: In certain markets, farmers may rely heavily on subsidies, loans, or government programs to invest in new technology. Understanding this dynamic can help you adjust your pricing and sales approach accordingly.
5. 🏎️ What’s the competitive landscape?
Existing solutions: Who are your direct and indirect competitors? What do they offer, and how are they priced?
Differentiation: What sets your product apart? It’s important to know how your technology compares to existing solutions, both in terms of performance and price. This will help you position your product more effectively.
6. 🚧 How accessible is this market?
Barriers to entry: Are there regulations, language barriers, certifications, or import/export restrictions that could complicate your entry into the market?
Distribution channels: How will you reach your customers? Do you need to partner with local distributors or cooperatives, or can you sell directly ?
📚 Case Study: Market Analysis realized for the Dutch Embassy and 20 AgTech Start-ups 🇳🇱
In collaboration with the Dutch Embassy, I had the opportunity to guide a group of 20+ AgTech start-ups through an in-depth market analysis, helping them understand the French agricultural market. This project combined a strategic market approach with on-the-ground field experience and participation in key events.
Understand the French Agricultural market as a global
The first step in our collaboration was to provide a holistic view of the French agricultural market, which is essential for any successful market entry strategy. This included an analysis of:
Agricultural cooperatives: In France, cooperatives play a significant role in the agricultural economy, especially when it comes to machine acquisition and collective decision-making. We assessed how these cooperatives operate and how they can serve as key entry points for AgTech solutions, facilitating access to a large number of farmers through a single channel.
Machinery sales trends: The French market has seen a steady rise in machinery sales, driven by the need for automation and improved efficiency. We analyzed the types of machines in demand, as well as the technology adoption rate among different segments of farmers
Labor costs and workforce trends: The increasing cost of labor in French agriculture has been a key driver for automation. Many farmers are looking for technologies that reduce their dependence on human labor, particularly in areas like harvesting, weeding, and planting.
The evolving structure of French farms: French farms are undergoing significant changes, with the trend moving towards larger, more consolidated farms as smaller farms are phased out or absorbed.
If you want to learn more about the French market, part of the research have been publish on The French Market. This provided the start-ups with a clear understanding of the key trends and opportunities shaping the French agricultural landscape, allowing them to tailor their strategies accordingly.
In-Depth Market Analysis
The analysis began by identifying priority market segments for each start-up, tailored to the specific aspects of their technologies. We assessed the addressable market size by focusing on the following key areas:
Profiling Potential Farms in France
We examined farm size, technological needs, and investment capacity, covering both large-scale industrial farms and smaller family-run operations to ensure a comprehensive view of potential customers.Understanding Local Farming Practices and Production Costs
We analyzed differences between organic and conventional farming, evaluating how each technology could integrate with existing methods. We also assessed the production costs for targeted crops, including labor, inputs, and energy, to help the start-ups better align their solutions with the dominant practices in the French agricultural sector.Quantifying the French Agricultural Market
In addition to segmenting the market, we compared each major agricultural sector in France, including field crops, vineyards, vegetables, orchards, and greenhouses. For each sector, we assessed the following factors: Surface Area, Number of Farms, Average Farm Size, Investment Capacity, Added Value, Production Costs, Geography, and more… and this for all 5 markets we were targeting.
And more …
This detailed quantification allowed us to calculate both the Total Addressable Market (TAM) and the Serviceable Obtainable Market (SOM) for each start-up and each market. By understanding the true potential of each sector and focusing on the most accessible opportunities, we helped these companies develop a realistic roadmap for market penetration.
Presentation of the Market Analysis in Lelystadt, NL, June 2024
Participation in Key AgTech Events and On-the-Ground Insights
The analysis wasn’t limited to reports and studies; we also conducted a number of interviews with key players in the local market to gain deeper insights into their experiences, challenges, and expectations, allowing us to refine our understanding of the market dynamics and make our recommendations more grounded in real-world feedback. In addition, the Dutch Embassy organized several on-site events, allowing Dutch start-ups to meet directly with French farmers and local AgTech stakeholders. These interactions provided invaluable feedback from end users, helping the start-ups better understand the specific needs and challenges of the French market. These events not only strengthened their connections with local farmers but also helped them validate their market entry strategies and refine their go-to-market approaches.
Results and Impact
By combining a theoretical market analysis with on-the-ground experience, many of these start-ups will adjust their product, their strategies and receive early feedback from the French market. Several companies will be able to initiated concrete collaborations with French farmers and/or local distributors, helping them gain a foothold in the French AgTech market faster.
ANDELA machine, present at the show
✅ Key Takeaways from Episode 1: Successfully Positioning Your AgTech Product in the Market
Thorough Market Analysis is Essential: Avoid launching without a deep understanding of the market. Conducting comprehensive research on potential customers, specific crops, and regional challenges helps ensure that your solution is positioned effectively.
Clearly Define Your Addressable Market: Having a rough idea of your target market isn't enough. Quantify the Total Addressable Market (TAM) and Serviceable Obtainable Market (SOM) to understand where your product can make the most impact, and target your entry with precision.
Clarify Your Value Proposition: Align your product’s features and messaging with the exact needs of the market. A solution that fits one market may require adjustments to succeed in others—different regions may demand varying specifications or features.
Consider Local Costs and Practices: Local production costs, labor availability, and farming practices all shape how your product is perceived. Understanding these factors enables you to price competitively and emphasize the cost savings or added value your solution brings.
Incorporate Real Feedback from the Field: Real-world interactions with local stakeholders, like farmers and distributors, provide critical insights that data alone cannot reveal. Field feedback refines your assumptions and helps to tailor your product to meet the specific needs of new users.
👀 Next Episode (Episode 2/7) : How to adjust your product to meet the expectations of farmers and the agricultural market
Stay tuned for practical tips and case studies on how to refine your offering based on real-world needs.
Are you struggling to develop your product in the AgTech market? Let’s talk! I can help you analyze your market and develop a clear strategy. Contact me on LinkedIn or organize a meeting here ⬇️
Want to learn more about Agtech opportunities ?
AMERICAN MARKET - 🇺🇸
AUSTRALIAN MARKET - 🇦🇺
CALIFORNIAN MARKET - 🇺🇸
CANADIAN MARKET - 🇨🇦
EUROPEAN MARKET - 🇪🇺
FRENCH MARKET - 🇫🇷