NFU Mutual Diversification 2022

Published by

DIVERSIFICATION

Sponsored by

For more information, visit nfumutual.co.uk/fgdiversification

p1 Cover 1

13/10/2022 11:58

2|Introduction Chris Walsh, Farm Insurance Specialist at NFU Mutual, explains why, with so much uncertainty and increasing financial pressure, there has never been a more important time to explore diversification opportunities.

Diversification: an expert’s view

T

hroughout this booklet, you’ll find advice on what to consider if you’re thinking of diversifying your farm, as well as first-hand accounts from farmers who have experienced the opportunities and challenges associated with setting up a new venture.

Among them are Barbara Smith and her two daughters, Sam and Jo, gold winners of the 2019 British Farming Awards’ Diversification Innovator of the Year (small to medium) category.

Their farm, Slapton Manor in Northamptonshire, began as a traditional mixed farm, but, in 2000, they diversified into bed and breakfast accommodation.

They then expanded further into weddings and events by utilising existing farm buildings.

There’s also Jenny and Stephen McKerr, gold winners of the 2021 British Farming Awards’ Diversification of the Year (small to medium) category.

The first generation beef and sheep farmers identified a diversification opportunity in 2018. The couple used their savings to set up The Wee Farm Distillery, which produces more than 30 traditionally made gin liqueurs. Two years later, they added to their portfolio by renovating an old cottage

We understand that diversification isn’t for everyone. However, with so much uncertainty, now is a crucial time to explore diversification opportunities Chris Walsh into a self-catering holiday let.

These are just a couple of examples of how farmers are expanding their businesses.

Research Our latest research* revealed that 33% of UK farmers surveyed have diversified. Of those who have already done

so, 85% expect the importance of their non-farming activities to increase or stay the same in the next five years.

Of course, we understand that diversification isn’t for everyone. However, with so much uncertainty, now is a crucial time to explore diversification opportunities.

How we can help WHATEVER stage you are at with your diversification journey, as the UK’s leading rural insurer, NFU Mutual understands the challenges facing customers entering new markets and is here to support you.

To see how we can help with your diversification journey, either scan the QR code, visit

nfumutual.co.uk/fgdiversification, or contact your local NFU Mutual agency office.

*Source: NFU Mutual’s Voice Of The Farmer survey, June 2022 – 545 of 1,654 responses were diversified.

For more information, visit nfumutual.co.uk/fgdiversification

p2 3 Expert Opinion.indd 2

13/10/2022 11:53

Introduction|3

33%

of UK farmers surveyed have diversified

Of those who have already done so, 85% expect the importance of their non-farming activities to increase or stay the same in the next five years

Sponsored by NFU Mutual

p2 3 Expert Opinion.indd 3

13/10/2022 11:53

4|Getting Started Running a farm and setting up a new venture at the same time is not without its challenges, but it’s an option an increasing number of UK farmers are exploring. In this article, Chris Walsh, NFU Mutual’s Farm Insurance Specialist, explores some initial considerations around farm diversification.

Getting started 1. Do your research and have a plan PLANNING and research are crucial in any diversification journey.

The key first steps are considering what product or service you could offer and who your potential customers might be.

Exploring potential competitors and pinpointing what will make your new venture unique and difficult to replicate can also be beneficial. Remember to consider your financial position before, during and after planning your diversification.

It can be easy to focus too heavily on planning a diversification, however, it’s critically important not to neglect your core farming activity - your new venture should

complement your main business activity.

Talking to people who have done it all before is simply invaluable, including conversations with experts, such as your insurance provider and health and safety professionals.

2. Do something you love IT goes without saying, diversifying into something you have a genuine passion for is always a good idea. For instance, if you love hosting parties for family and friends, then a wedding venue might be just the diversification you’re looking for.

If horses are already an interest, then a livery yard might be the perfect way to create some additional income.

For more information, visit nfumutual.co.uk/fgdiversification

p4 5 How and when to get started.indd 2

13/10/2022 11:55

Getting Started |5 3. Make use of what you already have IT’S worth thinking about all your existing farm assets, including land, location, buildings, people and skills.

Have they reached their full potential, or could they take a leading role in a part of your wider business?

Are there any outbuildings which have become redundant or that could be used more effectively?

Investing in renovating them for events or hospitality could prove worthwhile.

That unused building might be the perfect place for farmhouse weddings or an idyllic staycation location.

Your farm’s location could also be key to unlocking a profitable diversification scheme. For example, if your farm is on a footpath or near tourist hot spots that are already attracting visitors,

this could give you the opportunity to market your new product or service to them as they’re already visiting your location.

If your new venture involves selling directly to the public, then it could be the first time you bring paying visitors onto your farm.

Therefore, public liability insurance should be a key consideration. It protects

your business if it’s held responsible for accidental injury to customers or the wider public, or damage to their property.

Some farm insurance policies provide public liability cover as standard. It’s essential to check with your insurer what your policy does and doesn’t cover during the planning stages.

4. Protect what you’ve got PUTTING suitable protection in place for your business, employees and customers is a crucial part of any farm diversification, in addition to ensuring you have developed a robust risk management plan.

The first step is to check whether you already have cover for diversifications as part of your existing farm insurance policy. If this is the case, make sure it meets the unique needs of your diversification. To do this, contact your insurer who can talk through your existing insurance.

Your responsibilities under health and safety legislation will change too as you diversify, both when you are developing your plan, for example using contractors or suppliers to convert or build new facilities, and when they are complete, and you’re ready to unveil your new venture. NFU Mutual Risk Management Services Limited (RMS) have a team of professional health and safety and risk management consultants who can provide expert guidance as you develop and launch your diversification venture.

Chris explains: “As your business grows, you’ll need to ensure you have the right level of insurance cover in place and that new risks you’re exposed to are considered and regularly reviewed.”

Support available AS the UK’s leading rural insurer, NFU Mutual is here to support you. To see how we can help with your diversification journey, visit nfumutual.co.uk/fgdiversification, or contact your local NFU Mutual agency office.

Sponsored by NFU Mutual

p4 5 How and when to get started.indd 3

13/10/2022 11:52

6|Hospitality - Case Study

Identifying opportunities boosts hospitality venture

B

arbara Smith’s grandparents first came to their c.40 hectare Northamptonshire farm in 1924. Over time, it has been gradually added to, with a further 162 hectare.

Slapton Manor began as a traditional mixed farm, and, in

We all work very hard doing our different jobs on the farm, creating a strong team

2000, Barbara and her team identified a diversification opportunity.

Before starting their new venture, they checked their farm’s insurance details to ensure they had the right cover in place. Following confirmation, a redundant farm building was converted into bed and breakfast rooms.

The family further diversified by renovating outdoor farm buildings for weddings and events.

Slapton Manor Farm now has multiple revenue streams on-site, including a wedding venue, bed and breakfast accommodation and leisure vehicle storage.

Barbara and her team say:

“The farming industry has seen huge amounts of change in the last century. The pace of change is simply staggering.

There are a growing number of systems to increase productivity, protect the environment and make our jobs safer.

“For this reason, it has never been more important to keep evolving our business.

“We all work very hard doing our different jobs on the farm, creating a strong team.

“There isn’t much time to stop and think, but diversifying the farm has enabled us to strengthen our family business, allowing it to grow and face a changing future.”

For more information, visit nfumutual.co.uk/fgdiversification

p6 7 Case Study 2

13/10/2022 11:23

Hospitality - Case Study |7 Farm facts ■ Slapton Manor Farm, is run by

Barbara Smith and her daughters, Sam and Jo. Barbara is also supported by many others including her daughter’s partners James and Dan ■ Barbara Smith’s family have long championed female farmers; the farm was once Barbara’s mothers ■ The business now offers 14 accommodation rooms, a licensed wedding and events venue and leisure vehicle storage.

Diversification tips from Barbara and her team ■ Hobbies can provide

the key to diversification.

If you have a passion for something, that’s half the battle when it comes to making it into a successful business.

In addition, it’s often beneficial to keep other business interests going as diversification is not about having all your eggs in one basket ■ Before you start on your diversification journey, check your insurance details to ensure you have the appropriate cover in place ■ Encourage children to work and study away from home. Sam’s love of organising Young Farmers’ Club events led to her studying events and hospitality at university.

Whilst Jo’s time at Harper Adams encouraged her to learn more about farm diversifications, leading

her to work at Abbott Lodge in Cumbria ■ Don’t underestimate the importance of reviews.

Monitoring customer comments and feedback and showing you value their opinions can go a long way in maintaining a positive brand image.

This will help build a loyal customer base and attract new customers too ■ Environmental sustainability has never been more crucial, so you must take this into consideration when setting up your new venture.

Even simple things such as having a good recycling station can help secure repeat business.

Everything we do is with the aim of securing the farm’s future and giving the next generation the means and knowledge to be low-carbon footprint food producers.

Support available AS the UK’s leading rural insurer, NFU Mutual is here to support you. To see how we can help with your diversification journey, visit nfumutual.co.uk/fgdiversification, or contact your local NFU Mutual agency office.

Sponsored by NFU Mutual

p6 7 Case Study 3

13/10/2022 11:24

8 |Rural Crime Following recent research by NFU Mutual on the impact of rural crime, farmers can help safeguard their businesses by actioning the advice below from Rural Affairs Specialist, Rebecca Davidson.

T

he latest NFU Mutual Rural Crime report showed that while the cost of rural crime dropped in 2020 and 2021 during the pandemic, it was on the rise again at the start of 2022. It could continue to rise in the months ahead, amid the cost-of-living crisis and rocketing prices of essential farm equipment and fuel.

All farmers should seek to protect their business from crime, but those that have launched new ventures need to consider any new risks.

Vigilant Rebecca Davidson, Rural Affairs Specialist at NFU Mutual, says: “While break-ins at farms and other rural businesses are sadly not a new phenomenon because of their remote locations, we have seen a recent spate of

Protecting your farm diversification thefts from diversified businesses, including farm shops.

“Our advice is for diversified businesses to be vigilant about

Practical advice TO prevent crime and protect your property: ■ Install CCTV, security lighting and an alarm – thieves hate to be seen and heard ■ Reduce your cash on-site by banking more frequently – also consider any on-site vending machines and removing the cash cassettes each night ■ Safes should be fixed to the ground in accordance with the manufacturer’s instructions

■ Join a rural watch or farm watch scheme ■ Ensure, where possible, that any high-value target stock items, such as alcohol, are kept to a minimum if on display ■ Remove keys from vehicles ■ Keep expensive farm machinery and vehicles out of sight ■ Report suspicious activity to the police.

anyone acting suspiciously on site and to keep any cash held on site to a minimum.”

Rural Crime report AS the UK’s leading rural insurer, we’re in a unique position to understand the true cost of rural crime.

Every year we gather our claims statistics to provide a detailed picture of the financial and social impact of rural crime.

To help prevent crime and protect your property you can find advice in our 2022 rural crime report, visit nfumutual.co.uk/ ruralcrime for more information.

For more information, visit nfumutual.co.uk/fgdiversification

p8 9 Rural Crime.indd 2

13/10/2022 12:17

Promotion |9

T

here’s no doubt that consumers are becoming increasingly passionate about supporting local businesses and maintaining a sense of community.What’s more, shopping locally also reduces our carbon footprint. The trend for traceable, quality, local produce continues to grow and it’s worth considering how you can utilise this movement to benefit the promotion of your diversification venture.

From farm shop cafes and holiday lets to wedding venues and glamping pods, most diversification activities will require marketing and promotion to maximise awareness. Reaching out to your existing customers and connecting with new ones is key.

It goes without saying that times have changed, including the way in which we communicate, and social media has played a huge role in this shift. So, understanding and leveraging social

Promoting your farm diversification platforms can help your business flourish.

If you’re new to the world of social media, it’s a good idea to start off by taking small, simple steps. Perhaps start by launching on one platform to keep things manageable.

Think about the type of content (and imagery) that would appeal to your target customer i.e., the unique elements of your products

Tips to begin your diversification promotion NFU Mutual’s Chris Walsh adds, when it comes to promoting your farm diversification, don’t forget to: ■ Shout about the value and quality of your product or service ■ It’s vital to stand out for the right reasons. A good way to do this is to be clear about why or how your product or service is unique. For example, does it have a sustainability story that

will engage consumers?

■ Understanding your typical

customer can help ensure your marketing efforts are targeted.

For instance, if you’d like to sell directly to consumers, researching local events as promotion opportunities could be a good starting point. If you are targeting local businesses, offer to tailor your product or service to complement their overall style or theme.

and services, behind the scenes sneak peeks, snaps of your location or even profiling staff members. But don’t forget that social media is a two way street. When people begin to engage with your posts and ask questions, it’s important to acknowledge and respond in a timely manner, after all, social media is a customer service tool first and foremost.

Support available AS the UK’s leading rural insurer, NFU Mutual is here to support you. To see how we can help with your diversification journey, visit nfumutual.co.uk/fgdiversification, or contact your local NFU Mutual agency office.

Sponsored by NFU Mutual

p8 9 Rural Crime.indd 3

13/10/2022 11:51

10 |Distillery - Case Study

Raising a glass to the farm’s future

F

irst generation beef and sheep farmer, and Scottish AgriTourism member, Jenny McKerr, saw a diversification opportunity in her run-down farm steading and decided to launch a craft gin distillery.

Before getting started with planning her diversification venture, Jenny checked her insurance would cover the ideas she had.

After much research, she decided to take the biggest gamble, when she invested her family’s savings to launch her farm diversification on the family’s South Lanarkshire unit.

With support from

her husband, Stephen, Jenny transformed a former milking byre into The Wee Farm Distillery.

During this time, Jenny and her family lived in a static caravan while Drovers, Jenny’s first gin, was developed. It celebrates Scottish farming and complements beef with its mix of pink peppercorns, allspice, heather and thistles.

Development

Produced from a craft copper still, small batches of gin are double distilled which are then bottled and labelled on-farm.

Jenny worked with a mentor for a year, which helped her learn the technical aspects,

Farm facts ■ First generation livestock

farming family

■ 2018 - established

diversification in gin production ■ 2020 - renovated an old cottage into luxury holiday accommodation ■ 2021 - opened a farm shop. recipe development and legislative requirements of her diversification. Soon after, she developed three gins to celebrate the spirit of Scottish farming along with, what is now, a 30-strong portfolio of gin liqueurs.

For more information, visit nfumutual.co.uk/fgdiversification

p10 11 Case Study 2

13/10/2022 11:50

Distillery - Case Study |11 Holiday lets

By offering visits to the distillery, Jenny realised people enjoyed spending time on the farm.

So, in 2020, after exploring the opportunities and risks (including additional insurance requirements) she further diversified by renovating an old cottage on-site into luxury selfcatering holiday accommodation featuring a hot tub, barbecue hut and a sensory gin garnish garden.

The success of the initial gin diversification, coupled with a Government Bounce Back Loan, helped fund this additional venture.

Although lockdown affected many people in so many ways, Jenny showed great agility and resilience when she adapted her business. Jenny’s distillery switched to sanitiser production and gin sales moved online.

Most recently, the McKerrs opened the Steak and Still Farm Shop. The shop sells beef reared on the farm, as well as items from local producers.

Support available AS the UK’s leading rural insurer, NFU Mutual is here to support you. To see how we can help with your diversification journey, visit nfumutual.co.uk/fgdiversification, or contact your local NFU Mutual agency office.

Jenny’s diversification top tips ■ Be bold and be brave

when asking questions ■ Seek support from experts and those who have already diversified. Their insight and advice can help you save precious time and money ■ Don’t be afraid of

competition. Team together with other producers. I am a member of Lanarkshire Larder, a group of other local food and drink companies ■ Take time away from dayto-day farming tasks to work on new products.

Diversifying into the drinks industry IF you’ve already diversified into the drinks industry, or are thinking of doing so, it’s worth considering how to elevate your farm business further by: ■ Exploring packaging options - perhaps depicting the farm and where the ingredients have been gathered. Use your surroundings for inspiration ■ Running on-farm tasting events and promotions.

Direct selling from the farm is a solid way of building a brand and obtaining

customer feedback

■ Using social media to

tell the story of your drinks.

From harvesting through to brewing and bottling. This plays into the recent ‘fieldto-fork’ trend that consumers are becoming increasingly interested and aware of ■ Diversifying your range once you’ve established the foundations. If gin falls out of fashion, it’s important to have another offering.

English whisky and rum are tipped to be growth areas.

Sponsored by NFU Mutual

p10 11 Case Study 3

13/10/2022 11:50

12|Staying Safe

Staying safe on your farm

R

isk management is an essential part of running any farm. However, when you diversify, the added risks that arise from your new venture are likely to be completely new to you. These risks may include bringing paid visitors onto your farm for the first time, food hygiene risks associated with serving food and drink, and special event

risks if you host weddings and parties. If you’re unsure of the best approach to identify and manage the added risks on your farm, now may be a good time to seek expert advice.

NFU Mutual Risk Management Services Limited (RMS) have a team of professional health and safety and risk management consultants who can provide

guidance on the latest legislation that you will need to be aware of as you develop your diversification plans. They can support you as you go through the planning and construction phases and ensure that you are compliant with the law when you are ready to push forward with your plans.

RMS have a wealth of experience in working with a

For more information, visit nfumutual.co.uk/fgdiversification

p12 13 Staying Safe.indd 2

13/10/2022 11:48

Staying Safe |13

wide range of businesses that have diversified, big and small.

Whether it be converting and opening a farm shop, a holiday let, caravan storage or a campsite with leisure facilities, the health and safety considerations require professional advice to ensure you get it right from the outset.

Most diversifications involve more people coming onto your farm so RMS can help with spotting the risks associated with more vehicles, more people and different types of businesses to keep you, your employees, contractors and suppliers, and your customers safe.

On top of this, RMS can provide specific guidance and protocols that are unique to

your business diversification.

From food hygiene requirements and safe working practices for cleaners, to providing insight into developing technologies and how best to use them, RMS are expertly placed to support you and can visit your farm and discuss your plans with you.

They will explain responsibilities under the law and provide a structure and series of recommendations to help improve safety. In short, our health and safety experts will help you assess any significant risks that require you to take action – giving you peace of mind that your farm is a safe place to be for you, your family, your workers and the public too.

First steps IF you’re not sure where to start, a great first step is speaking to your local agency office about expert health and safety advice, as well as NFU Mutual Risk Management Services.

Alternatively, scan the QR code below, or visit nfumutual.co.uk/rms

Sponsored by NFU Mutual

p12 13 Staying Safe.indd 3

13/10/2022 11:48

14|Bringing Plans to Life

Bringing your plans for diversification to life

W

e hope this booklet and the stories of successful farm diversifications will inspire and help you on your own diversification journey.

Of course, diversification isn’t for everyone - an

immense amount of planning, time and passion is needed to make it work.

Taking the leap beyond farming can be daunting and it’s not without its risks, but you’re not alone. It’s essential to lean on others for advice and expertise, right from

the beginning.

Whatever stage of your diversification journey, as the UK’s leading rural insurer, NFU Mutual understands the challenges facing customers entering new markets and is here to support you.

How can we help?

TO see how NFU Mutual can help with your diversification journey, visit nfumutual.co.uk/fgdiversification, or contact your local agency office.

For more information, visit nfumutual.co.uk/fgdiversification

p14 15 Bringing to Life.indd 2

13/10/2022 11:47

Why choose NFU Mutual?|15 Why choose NFU Mutual?

NFU Mutual is proud to deliver more than insurance. Since our beginnings in 1910, we’ve become part of the UK’s farming fabric and we remain committed to serving the needs of our customers. Here are just some of the reasons why UK farmers choose us: ■ Risk Management

We have internal risk management experts who can help ensure your farm (and diversification) is a safe place to be for you, your family, staff and visitors.

■ Our heritage Started by farmers for farmers. With more than 110 years’ farming knowledge and expertise, we know the industry inside out.

■ Big on local presence

Although we’ve grown, we haven’t lost our local personal touch – it’s what makes us special. With a network of more than 295 agency offices across the UK, we will get to know you, your family and your farm.

■ Farming unions We continue to provide funding for the UK’s main farming unions as they work with Government to keep agriculture running.

Last year, NFU Mutual provided a voluntary donation of £7.78 million to farming unions to carry out their vital role.

■ Rewarding loyalty Unlike many other insurers, we pride ourselves in rewarding our loyal General Insurance customers for renewing their policies with us.

We do this through a Mutual Bonus, which, for more than 20 years, has provided our customers with a saving on the renewal premium of their General Insurance policy, including our farming products.

■ No hidden fees

We don’t charge for paying monthly by Direct Debit or any other methods of payment, mid-term adjustments or cancellations.

■ Protecting the next generation of farmers Since launch, the NFU Mutual Farm Safety Foundation has delivered training to over 19,000 young farmers at 44 land-based colleges and universities throughout the UK, and through the young farmers clubs network.

■ Helping agricultural charities The NFU Mutual Charitable Trust promotes and supports charitable causes in UK agriculture and rural development. In 2021, the Trust donated more than £1m to support a range of initiatives, including projects that tackle isolation, support mental health and wellbeing,

and enrich young lives through agricultural education and innovation.

■ Trusted financial advice Our Financial Advisers are here to share their wealth of knowledge and answer your financial questions.

They are experienced in discussing important topics, such as handing down the farm and intergenerational wealth transfer.

Your local agency office can put you in touch with your local Financial Adviser.

NFU Mutual Financial Advisers advise on NFU Mutual products and selected products from specialist providers.

When you get in touch, they’ll explain the advice services offered and the charges.

Financial advice is provided

by NFU Mutual Select Investments Limited.

Sponsored by NFU Mutual

p14 15 Bringing to Life.indd 3

13/10/2022 11:48

LET’S START TALKING

At NFU Mutual we’re here to help put your mind at ease. Whatever cover you choose from us, you can be sure of a high level of protection.

To find out more about how we can support your diversification journey, scan the QR code below, contact your local NFU Mutual agency office or visit nfumutual.co.uk/fgdiversification

The National Farmers Union Mutual Insurance Society Limited (No. 111982). Registered in England.

Registered office: Tiddington Road, Stratford-upon-Avon, Warwickshire, CV37 7BJ

p16 Promotion 1

13/10/2022 11:46