We recently visited the Farm Innovation Show at Birmingham NEC.  We were able to look at the current opportunities available in the form of diversification and innovative ways of adding value to farm businesses.  It is important if a diversified income stream is introduced to a business that the margins are sufficient to invest in the time and inconvenience of running the alternative enterprise, to prevent this affecting the core business.
Glamping
Glamping has become extremely popular in the last couple of years and this could include shepherd’s huts, glamping huts, tents and log cabins.  The cost of this accommodation varies, depending on build quality and size, from £12,000-£25,000.  The returns can be significant, but this enterprise is becoming increasingly popular and although there is obvious demand, especially in the south of England, it is important to be aware of the competition and their offerings.  The accommodation is likely to depreciate rapidly due to the external material and the regular internal wear and tear.  It was advised planning should be obtained and there will be a need for services, as well as investing in a good marketing strategy.
Vending Machines
There are many types of vending machines on the market to provide direct sales facilities for farm produce.  This initially became popular in Europe and has now expanded into the UK.  Examples of products which are being sold include milk, eggs, vegetables and meat.  This system is a low-cost option, which can provide farmers with the facility to sell direct to the consumer.
Wind, Biomass, PV, Energy Storage and Other Forms of Generation
PV and biomass are still being installed, however due to the reduction in feed in tariff and renewable heat incentive the margins are increasingly tight, especially with large scale projects.  The same must be said for energy production through wind and unless a large percentage of the electricity can be used on site, quite often the project may not stack up.
Production of electricity through gas and oil is becoming increasingly popular, although grid connection is a challenge in the south west.
Electricity storage technology is improving and is being used as a facility to store energy for use at peak demand within the national grid.
Farm Shops, Cafes and Farm Parks
Rural shops and cafes are still growing and new sites are being introduced in rural areas.  Many farm shops are now introducing cafes to improve customer satisfaction and provide an additional product and service.  Small scale farm parks are also growing to provide further attraction and interest to visit the site.
Large scale farm parks are also popular and the National Farm Attractions network suggests 70 acres would need to be required for a large scale site.  Our advice would be to seriously consider the tax implications if land is used for non-agricultural purposes.
Utilisation of Wool
Wool is still a low value product many farmers sell direct through the Wool Marketing Board.   There are many niche outlets for wool and this is increasing.  Examples include duvets, clothing, insulation and wool cooling packs for transportation of cool goods, generally coming from farm shops, artisan producers and box delivery schemes.
Other Opportunities
The below were also on display at the show, which could provide interest, if location and demand is available and margins are sufficient.
• Clay shooting grounds
• Paint balling
• Wedding venues
• Segway racing
• Vineyards
• Golf courses
• Self-storage
• Aerial filming
Before setting up any type of diversification activity, it is important to carry out a business plan and feasibility study to investigate the set up and running costs, profitability, tax implications and planning impact.  If funds need to be borrowed, the potential lender will require a detailed clear proposal, indicating the sensitivity of the project and planned growth.

Contact George today at georgedrewett@fcgagric.com  or your local FCG office if you have a diversification project in mind for an independent assessment.