A new report from Boston Consulting Group (BCG) and Ag Access has shed light on the cautious approach US farm owners are taking towards adopting new agricultural technologies in 2024. The survey, which engaged 1,000 growers managing over 250 acres each, primarily cultivating corn, soybeans, wheat, or cotton, reveals that most growers prefer sticking with familiar solutions rather than exploring new technologies. This trend is driven by economic uncertainty and previous negative experiences with new technologies.
The report highlights that US growers are often wary of new agricultural technologies due to past solutions that have not met expectations. In an industry characterized by thin profit margins and limited annual income cycles, financial risk is a central factor in decision-making. With rising interest rates and fluctuating commodity prices, many growers are hesitant to adopt emerging AgTech, preferring instead to stick with proven technologies.
The survey identified several key influences on growers’ decisions regarding AgTech purchases. While awareness of new technologies is widespread, adoption rates remain low. Most growers indicated plans to repurchase existing technologies in 2024, with precision application equipment standing out as the most likely new investment.
Using the Demand Centric Growth (DCG) framework, the survey pinpointed the top three functional needs influencing technology adoption: boosting revenue, ensuring reliability, and reducing operating costs. However, emotional factors also play a significant role in purchasing choices. The most frequently cited emotional needs were minimizing time spent on repetitive tasks, maintaining soil health, and feeling in control of operations. Technologies that cater to both functional and emotional needs generally achieve broader market acceptance, according to BCG’s findings.
To address the diverse needs of growers, the research identified seven distinct grower segments, each with unique preferences and decision-making criteria. Key segments include the “Next-Generation Green,” focused on sustainability and innovation, and the “Legacy and Trust” segment, which emphasizes established supplier relationships and product reliability.
BCG recommends that agribusinesses can increase adoption by segmenting growers based on values and motivations. By understanding a grower’s segment, agribusinesses can personalize marketing and tailor product offerings. Factors such as age, succession plans, and sustainable farming interests help pinpoint customer needs and motivations. Addressing the specific functional and emotional needs of each segment can increase trust, improve product-market fit, and drive stronger adoption rates.
The implications of this report are significant for the agricultural technology sector. Agribusinesses must recognize the multifaceted nature of growers’ decision-making processes and tailor their approaches accordingly. By understanding and addressing the unique needs and motivations of different grower segments, agribusinesses can foster greater trust and drive more successful adoption of new technologies. This strategic segmentation approach can ultimately lead to more sustainable and profitable outcomes for both growers and agribusinesses alike.