The group gathered insights from 100 agrifood SMEs and support organisations that represent a large number of small businesses from England, Scotland, Wales, Northern Ireland, the Republic of Ireland and Iceland.
The results revealed that the SMEs often lack specialised business support, due to the particular challenges of developing innovative new products and services in the relatively niche agrifood sector.
Small agrifood businesses have specific challenges to overcome
The report found that SMEs in the agrifood space tend to be mission-led, purpose-driven businesses motivated by changing the system. While it is positive that SMEs focus on more than profit alone, it can create significant challenges for them, as they want to introduce new products and services into the market. For example, using new technologies and business models that need adoption from industry networks, along with government policy shifts and citizen participation, can be an obstacle for SMEs.
In addition, at a business level, SMEs are confronted with the common challenges of how to access customers, markets and technical expertise, to be able to move along the technology readiness scale from bench to commercial product. This progression requires physical technical facilities, funding and business process expertise which can be yet another obstacle for small businesses.
Aside from access to resources to develop their products and markets, SMEs require investment. However, SME-investor relationships can be challenging. This is because investors tend to prioritise return on investment, and innovative developments in agrifood can take longer to reach profit because of the technical challenges and the need to gain regulatory approval.
Unmet needs of agrifood SMEs identified in the report include:
- Long-term investment
- Support for understanding the funding landscape
- Support for navigating complex regulations
- Support for market validation, particularly for niche and unique products
- Lack of time and resources to engage in strategic development and business planning.
Support for innovative agrifood SMEs should help them to scale and grow
While a great deal of support is already available for SMEs to grow their businesses, tailored services for agrifood businesses is not extensive.
The report recommends a range of activities that would operate across the UK, Ireland and Iceland. These activities would specifically target the agrifood sector, complementing existing services and providing specialist support that will help innovative and ambitious agrifood businesses to scale and grow.
Recommendations of how the agrifood industry, including EIT Food, can support agrifood SMEs include:
- Extend existing networks to include innovative agrifood SMEs and specialist service providers
- Leverage extended networks and broker introductions to provide access to technology, facilities, and funders
- Provide access to high quality resources and tools for professional development (technical and business); focused on innovation, operational process, and scale-up skills
- Provide specialist training on business innovation and strategy for food SMEs.
“There are particular challenges around providing tailored support for small ‘farm to fork’ businesses,” said Jayne Brookman, Director EIT Food North West.
“Most innovation support agencies have to support a wide range of sectors. Our aim is to help to create easier access to new technologies and markets and tailored business support to enable these agrifood businesses to attract investors and develop sustainable, scalable businesses. EIT Food North West Regional Office can play its part by connecting SMEs to the international networks and the available agrifood business expertise that these businesses have told us they want.”