Where is my stock grazing?
Digitalization affects all industries – even farmers. They too must adjust to the changing needs of their customers. At the same time, they profit from new business models and customer contact possibilities. Guido Leutenegger shows just how innovative agriculture can be: This clever farmer offers cows as stocks and uses digital channels for marketing. Furthermore, his highland cattle equipped with GPS trackers have become a use case for the “Internet of Things.”
The farmer Guido Leutenegger is dedicated to the production of high-quality meat in harmony with nature. Towards this end, he uses Scottish highland cattle that graze on unused alpine meadows. “They are robust, adaptable and undemanding. There is no other breed of cattle with which you can attain such great quality of meat despite the sparse feed,” asserts Guido Leutenegger in justification of his choice. His “Natur Konkret” operation has really grown since its founding 25 years ago: 800 highland cattle, 200 wooly pigs and 3,000 chickens graze and grub in Kreuzlingen and several alpine meadows in the mountains of Ticino. The products produced are more than just “organic.” Plenty of free range and natural pastureland comprise a recipe for success. Leutenegger dispenses with the addition of concentrated fodder entirely.
Customers can buy chicken legs, eggs, entrecôtes, sausages and meat in the company’s shop in the village of Maseins in Graubünden. Or in the webshop. Here, customers can shop wherever they are and whenever they prefer and have the goods sent directly to their home in a freezer box. It’s a win-win situation. “We can deliver throughout Switzerland and don’t need to invest in shop locations,” according to Leutenegger.
The cow as stock
Speaking about investing: Not only do sales channels represent a considerable investment for farmers, their animal herds do as well. Guido Leutenegger has chosen an unusual business model to finance the growth of his operation: the cattle as stock and the customer as a partner.
He was inspired with the idea during the financial crisis when talking to a colleague who is a banker. In the whirlwind of the financial industry, stock-holders were increasingly questioning their investments. Many buyers didn’t really know what it was they were purchasing. “Since we wanted to expand anyway, I thought that perhaps we had to offer people something simpler. Specifically: invest in a cow – receive meat,” offered Leutenegger in explanation of his financing model. It’s so simple, so attractive.
For CHF 2,500, people can purchase a cow and then receive an annual dividend for ten years: meat worth CHF 350. “The dividends are easily re- deemed in our online shop. The customer can choose from a wide product range. And decide when it is to be delivered."
“I waned to offer people a simple investment: invest in a cow – receive meat.”
Guido Leutenegger, farmer
Greater customer loyalty through cow stocks
Cow stocks have meant added planning security and economic independence for Guido Leutenegger. Last but not least, the creative farmer benefits from great- er customer loyalty, because his customers draw the payout of their investment over several years. But it’s not just about locking in customers for Guido Leutenegger: “It’s about turning customers into participants. Customers feel connected to the oper-ation.” They own a real share in the company – and they have something that’s concrete, defined and physical: an animal they can touch.
Not a theoretical construct as is usual in the stock market, because a cow isn’t just something that exists on paper. On the certificate for your own cow there is a 12-digit number, which can also be seen on the earmark on the respective animal. Guido Leutenegger is certain that customers appreciate the transparent and sustainable investment: “It’s a real commitment to something that you can visit, inspect and even pet.”
The customer loyalty aspect seems to be effective since stockholders and individual buyers not only buy regularly in the online shop, they also powerfully advertise for the company and its products. They identify with the company and therefore actively promote it. Advertising and marketing run by themselves – for example Leutenegger’s Facebook page “Natur Konkret”: Not only do people speak favorably about the tasty products, but really cheer Guido Leutenegger on and defend the company from competitors’ attacks. It’s a classic example of how valuable credible recommendations and loyal customers can be.
“It’s about turning customers into participants.”
Guido Leutenegger, farmer
The cow and the Internet of Things
Leutenegger also impresses with his forward-looking thinking in his day-to-day farmer operation. After a long test phase, his first cows have been equipped with a GPS tracker. Rather than clanging cowbells, the furry necks of his highland cattle are ringed with a collar fitted with solar cells and a GPS tracker. It’s a business model based on the Internet of Things (IoT) – the linking of the digital with the physical world. The GPS tracker makes it possible to track the cow in real-time on the Internet. The advantage? “The cow can be located faster with GPS. It’s simply a tool for the cowherd,” explained the farmer, who has made geolocation work for him in his daily business. The idea can be taken even further with geofencing. A virtual “fence” is defined and if the cow leaves the marked area, the cowherd is automatically notified about the straying animal. A GPS device also offers benefits in terms of animal protection that go beyond a cowbell, because it makes “geo-aid” possible. “An injured cows stops moving, which means you cannot hear its bell ringing so it’s hard to find,” explained Guido Leutenegger. In contrast, the GPS device notes when a cow stops moving and alarms the cowherd. He can react more quickly and come to the animal’s assistance.
Is GPS instead of a cowbell solely a benefit for the farmer? Not at all, the customer profits as well. He can track “his” cow in the meadow with live tracking and know exactly, at all times, the hillside on which it is grazing and how far it has already moved today. “This enables us to offer the customer a special experience. Through their personal login data they can query the precise location of their cow,” stated Guido Leutenegger about his new service. This provides stockholders with security, a sense of connection and, last but not least, the opportunity to visit their furry investment without further ado.
GPS-controlled tractors, drones for field surveillance, an oestrus sensor in the cow with an SMS alarm, computer-controlled field fertilizing: The march of digitalization in agriculture is unstoppable. In the aforementioned cases, it primarily serves to boost efficiency – greater harvests per area and animal.
Digitalization also offers new possibilities when it comes to customer relationships. Particularly small operators and niche providers profit here. They have to: “It’s a matter of not being left behind and to also offer benefits to the customer that have since become a matter of course,” explained Guido Leutenegger. That’s because customer behavior hasn’t only changed towards furniture dealers, banks and electronics manufacturers. Exactly as with other consumer goods, customers want to search for, compare and purchase agricultural products online – right from their couch at home or on their smartphone on the train, 24 hours a day, 7 days a week. This also applies to Guido Leutenegger’s customers: “90 percent of customer orders and customer contacts take place through the webshop and e-mail.”
“It’s a real commitment to something that you can visit, inspect and even pet.”
Guido Leutenegger, farmer
This is not only practical for customers, but also for Guido Leutenegger. Orders are automatically saved in a central system and show the entire customer history. Furthermore, he is notified about incoming orders by e-mail and can view them on his smartphone. Even if he happens to be on a mountainside in Ticino.
Digitalization also assists with marketing. Websites and webshops offer farmers the ability to sell their products directly. Guido Leutenegger has made use of them for years – with success. On his modern website with a webshop, customers and investors can find all the information they need about the products and services.
Digitalization: helpful, but has its limits
Is digitalization the ultimate solution for all business models? Are physical communication channels dead? Are people superfluous as a workforce? “Digitali- zation is a good tool in many areas, but nothing more,” according to Leutenegger. A lot of things can be depicted, measured or marketed digitally, but people won’t be replaced in the process. “The GPS tracker on the cow, for example, won’t replace the alpine cowherd,” Leutenegger asserted.
Especially when it comes to customer relationships, digitalization isn’t necessarily the path to absolute customer bliss. Because GPS tracking from the couch over a browser cannot be compared with the experience of standing on a mountainside in Ticino and petting one’s own long-haired, curved-horned highland cattle. There’s a reason why cow stockholders often stop by to visit their furry investments. “Visitors are welcome anytime. It’s an especially impressive experience when the cattle are pastured in the alpine meadows.”
“Digitalization is a good tool in many areas, but nothing more.”
Guido Leutenegger, farmer
How will the agricultural model develop in the future? With more automation, less human work and more digital control, monitoring and planning. The agricultural sector has proven it’s certainly not lagging behind other sectors when it comes to digitalization. Networked software and the Internet of Things remain central: for the managing of machines, fields, animals as well as suppliers and customers. Hardly any farmer knows all his animals by name, not to mention his customers. Integrated systems have become indispensable, particularly when it’s a matter of long-term customer service, being able to recognize their needs and offering them the right products and services.
And how are things going for Guido Leutenegger’s business? “Our story is far from over – we’ve only just begun. Our goal is not primarily to grow ourselves, but to expand the label. We already have 80 farming families, primarily from the mountains of Ticino, who are now also operating according to these production methods.” It’s not a matter of achieving growth simply to become larger. It’s not just about getting ahead yourself, but achieving something for society and to further the philosophy: sustainability in harmony with nature and animals.
And it goes without saying that happy customers remain top priority. We can truly look forward to the further innovative ideas with which Guido Leutenegger will surprise his investors and customers in the future.
Guido Leutenegger is a trained teacher and was president and operat-ing manager of Pro Natura Thurgau for ten years. He founded his company “Natur Konkret” back in 1990 with the goal of establishing a balance between the protection of nature and animals and the production of high-quality food. During his many years of political activism in cantonal, municipal and city legislatures, he kept a hand in the running of his company and was also politically active for environmental issues.
His first agricultural undertaking didn’t involve meat production, but bio- diversity – the diversity of animal and plant species. A gravel island in Kreuzlingen was becoming overgrown and causing the city work and money. Guido Leutenegger took on the challenge of dealing with this problem by natural means: From that day on, grubbing wooly pigs and grazing highland cattle prevented the island from becoming overgrown again. What had been an eyesore became a nature reserve and today provides a habitat for numerous bird species and amphibians.
He became a full-time farmer starting in 2003 and his herds began to greatly increase. By leasing alpine meadows in Ticino and with heritage chicken and pig breeds, he has remained true to his dedication to biodiversity, while at the same time producing top-quality, ecological meat.
His business meanwhile has 15 employees and 80 partner farms – along with 800 highland cattle, 200 wooly pigs and 3,000 chickens.