The customer should be at the heart of every business decision and when diversifying it is imperative to understand what customers need and value. Businesses should consider emerging global trends that have an impact on consumer behaviour and values as these will offer many opportunities for farm diversification. The dominant megatrends include an emphasis on wellness, the environment and sustainable living and “experience over possessions”.

1. Wellness tourism There is a growing global interest in wellness and healthy living. The Global Wellness Institute estimates that wellness tourism is a £500 billion global market and is growing twice as fast as other types of tourism. The forecast is for continued growth in this area and, importantly, these tourists are typically high-spending, high-yield individuals.

In addition to wellness tourism, the idea of social prescribing is gaining the attention of the medical profession with doctors prescribing time getting back to nature in the countryside to their patients. Farms are perfectly placed to provide a range of activities that promote wellness.

2. Environment and sustainable living In recent years, the level of interest in sustainable living has rocketed and this is seen as a growth area, with many farm businesses already setting up sustainable diversification projects. A recent survey by Booking.com found that 86% of respondents would be willing to spend time doing activities that counterbalance the environmental impact of their stay.

Furthermore, approximately one-third of all food produced in the world is lost or wasted according to Waste and Resources Action Programme (WRAP) and estimates by the Food and Agriculture Organisation of the UN. It is estimated that £810 worth of food is thrown away by the average UK family per year. Increased public awareness of the problems associated with food waste, climate change and the need to reduce carbon footprints presents an opportunity for farm businesses to create environmentally friendly diversification projects. Farms should consider the link between the farm's natural environment – landscape, biodiversity, soils, water and trees (natural capital assets) – and potential projects.

3. Experience over possessions According to Mintel research, 65% of adults say they would rather spend money on experiences than on possessions and this increases to 72% with millennials (those born between 1977 and 1994). Increasingly, consumers are drawn to experiences rather than material goods.

Experiences such as concerts, festivals, cultural experiences and adventure sports are more popular than ever. In the tourism sector, visitors are demanding authentic experiences in a stunning setting or embedded within a community or place. Farms are well placed to take advantage of this booming trend.

RURAL VIBRANCY INDEX

The Savills Rural Vibrancy Index tracks some of the key trends in farm diversification and aims to give a comparative indication of the strength of the sector over time.

The Index combines farm diversification drivers, economic indicators and enterprise performance. The vibrancy of the sector is represented as an Index relative to values in the year 2011 (2011=100).

The Index confirms a positive trend for rural vibrancy over the past seven years (see below). This is mostly due to the performance of diversified enterprises growing from strength to strength since 2011 (Diversified Enterprise Index). The overall Weighted Index represents a more gradual increase. This is due to a relatively flat trend for the Economic Index and the fluctuating Farm Drivers Index, influenced mostly by average farm incomes.

Of the key elements that make up the Diversified Enterprise Index, the growth in viticulture across the UK is recognised as a growing sector. It offers a flexible way for farms to diversify as it can start as a small project with only around three hectares to potentially turn a profit. The performance for renewable energy is still strong, and has had a positive impact on the Index.

The opportunities presented for farm diversification are convincing as farms are well placed to make the most of the global consumer megatrends that relate to the natural environment. These include sustainable living, wellness and the growing consumer interest in experiences over material items.

_{Read the articles within Spotlight: Farm Diversification below.}