Fifteen minutes outside of Olhão, Portugal, you will find a 30-hectare olive oil plantation that combines sustainable farming practices with agritainment.
Most mornings around 10 or 10:30 am, a Monterosa (favorably reviewed on TripAdvisor–62 reviews, five stars) staffer will take a group of around 30 (made up of locals on holiday and tourists) around the farm to tell you how they grow, protect, fabricate, sell and use extra virgin olive oil.
It costs 7 euros for the tour per adult guest (half price for children, kids 5 and under are free) so the farm makes over 200 euros per tour. There is, of course, a tasting at the end and an opportunity to buy product. I’d guess the average guest buys 20 euros of product (we have five kids to out total was closer to 70) so maybe the farm reaps another 600 euros in sales.
Of course, if you like their stuff, you can buy it online so more sale result down the road so to speak, https://www.monterosa-oliveoil.com/en/.
They’ll export it to pretty much anywhere so, by converting their guests to lifetime Monterosa aficionados, who knows what each tour is really worth over the longterm, but I’d guess quite a bit.
The main pest they have to combat is the olive fruit fly and they do that like a good NFL tight end– they fake them out of their (tiny) cleats. How? They spray their trees with an all-natural clay so that they don’t look or smell right to the fruit flies. Presto– no spoiled olives and no pesticides.However, the trees look quite ghostly.
Here’s their on-site hacienda:
Like most businesses (actually all of them), they made a few mistakes early-on. It’s learn-by-doing for all of humanity, I’m afraid.
They started with orange trees until they realized that despite sitting on top of a decent underground water reservoir (which is why they bought the farm in the first place–two drilled, on-site wells provide good water but not an infinite supply unfortunately), orange trees are water-pigs and the Algarve is subject to (frequent) droughts. Thus, they switched to olive trees (much more water parsimonious). Still, it took another 8 or 9 years before that had a harvest and could actually call the farm a “business” instead of a money-sucker.
The only things missing in my view would be to add a few places for folks who might want to stay overnight (people seem to love farm stays), a farm-to-table restaurant, a cooking school, a swimming pool (darn, it’s hot in Portugal’s Algarve), and a play area for adults and children.
Now that’s agritainment!
I’d even allow guests to job shadow–they could volunteer to work on the farm if they wanted to get to know the tough reality of making a place like this work–all you need to know to grow anything is science, biology, meteorology, agronomy, hydrology, entomology, drip irrigation, marketing, sales, crop insurance, finance, supply chain management, channel marketing, transportation and shipping, website development, list management, land use planning, zoning rules, and probably 20 more things I can’t even guess at.
Note that it is agritainment elements (and customer-loyalty due to superior service, quality of product and brand) that can bring a farm through a drought or sustain it while waiting for a first crop or during sudden crop price drops due to oversupply or competition from better-capitalized entities, who chop prices to put challengers OOB, out of business. And, at least some of these agritainment elements can be CMRR, committed monthly recurring revenues, the holy grail of almost all organizations even charities and not-for-profits.
For example, Monterosa might not want to operate an Airbnb-type experience, but I’d guess that they could find an entrepreneur who would. A longterm land lease would be simplest–in that way all the cost of developing farm stay structures, operating them, making them profitable would be the responsibility of the land lessor (ie, the sub-entrepreneur).
Monterosa would reduce the level of complexity of this part of their business to “taking a check to the bank once a month.” That check would be made up of a land lease payment (indexed to inflation perhaps) and a percentage rent (a percentage of the gross proceeds net of VAT, value added taxes, would go to the landlord).
At the end of the land lease, the parties could renew or not. If not, the landlord (typically) pays the sub-lessee (the land lessee) the depreciated value of the structures. An guess what? Monterosa still owns the land. Nice (for them).
Now why would an entrepreneur enter into such an agreement?
I can think of many reasons:
a) s/he knows zip about growing olives but a lot about the hospitality business
b) they want to be near the goose that lays golden eggs (ie, there is a ready-made audience and year-round supply of prospective guests)
c) they want to add other elements as described above like a farm-to-table restaurant and possibly wine tasting and sales
d) they don’t have to fork out any money to buy land
e) they can get into business a lot faster
f) they can get loans/financed because they have instant credibility because of their association with Monterosa
g) they make a pig pile of money.
Prof Bruce
postscript: here’s the rest of my photo essay–
