Extraction businesses can future-proof themselves and survive massive shifts in the market by keeping up with consumer demand, improving internal processes, controlling the supply chain, and investing in advanced extraction equipment. The extraction industry isn’t just growing, it’s evolving.
Given how unpredictable the world has become, the idea of “future-proofing” can seem daunting, unnerving, and even futile. After all, how can anyone possibly forecast what’s to come in this day of volatile markets and ever-shifting fiscal landscapes?
This question rings especially true for botanical extraction, an industry that’s fairly recently garnered legitimacy in the marketplace. However, it’s important to remember that even the most well-established industries started as seedlings, and they only grew into massive successes because someone kept an eye on the future.
Some steps toward future-proofing are universal across industries; others are of strategic importance to extraction technicians and facility managers. After poring over the research and examining successful ventures in a number of different sectors, we’ve found nine ways that you can future-proof your extraction business.
Markets are in a constant state of flux, but if you read the tea leaves correctly, you’ll know when changes are coming and how to prepare for them. As an extraction professional, you need to conduct market research to keep tabs on shifting consumer tastes and industry trends, and to do that, you’ll need reliable data.
Luckily, the internet age has given us a never-ending stream of information. Credible sources are constantly conducting research and forecasting the future for all types of industries, including botanical extraction.
One such source shows that the botanical extract market size was estimated at $9.24 billion in 2021 and is projected to hit more than $42.89 billion by 2030, with a CAGR (compound annual growth rate) of 18.6 percent during the estimated period 2022 to 2030. Meanwhile, significant trends include:
Information from these forecasts can be invaluable to your extraction efforts, enabling you to grow as your industry grows by adding team members, expanding operations, and investing in more cutting-edge technology.
Increased medical and recreational use of botanical extracts is fueling the industry’s growth, but increased consumption in the medical and recreational sectors is only possible because new laws expand the legalization of botanical extracts into new states.
If you stay on top of the shifting legal landscape, you can be the first in your industry to gain a foothold in new territories and marketplaces. Without this information, you could be left in the dust by the competition. What’s more, when providing financial services to extraction businesses, banks and institutions have to consider compliance costs, legal costs, logistical costs, educational costs, and reputational costs. This underscores the importance of knowing your local botanical extraction laws.
The popular site Investopedia constantly updates its listing of state-by-state legalization laws, and it’s an excellent resource that covers medical and recreational consumption.
With several states including New York, New Jersey, and Virginia passing adult-use botanical extraction legislation in 2021, the number of legal states is now up to fifteen. Clearly, the conversation about federal legalization is at a pivotal moment. According to a Gallup poll, more than two-thirds of Americans support measures for nationwide legalization.
Federal legalization will undoubtedly open enormous opportunities for companies to grow, but if they aren’t prepared to bring their products and services to new markets, they risk entering an oversaturated marketplace. When federal legalization hits, it will hit suddenly and all at once. Take these steps to prepare:
Companies that are future-proofed are prepared for all scenarios, both likely and unlikely, and in the world of botanical extraction, federal legalization is very likely to occur.
Anyone who runs a business has been invited to a networking event at one time or another. Reasons to attend are always the same: You’ll get a boost to your career and make a name for yourself by forging relationships with like-minded individuals who can be valuable collaborators throughout your career.
In simple terms, networking can supply your business with resources for company growth. Staying active with peers in the extraction industry fosters a high-quality business network, which opens the door to industry knowledge and trends, brand awareness, mentorship, new technology, the chance for increased profits, and even recruitment leads.
Some of the best ways to network in the extraction industry include:
By attending events and cultivating contacts both online and in person, you connect with other people who share the same ambitions and goals as you. While you ultimately want to best the competition in the marketplace, working together to strengthen botanical extraction can serve to benefit the entire industry.
If botanical extraction consumers have taught us anything, it’s that they love variety. Having a wide range of products keeps consumers interested in your brand and prevents your company from stagnating in the industry.
A strong product diversification strategy can introduce your company to new markets. While this requires investments in equipment and staff, it can help your company grow and prepare for unexpected changes in the marketplace.
Businesses that don’t work to add new customers are bound to fail in the future. Expanding and diversifying your product output guarantees new customers and a greater market share.
Merely understanding your supply chain only goes so far; you need to have intimate knowledge of your supply chain and control how it’s utilized and deployed. When you control the supply chain, you can steer it to benefit your business now and in the future.
On the most basic level, the botanical supply chain is made up of five stages: cultivation, manufacturing, distribution, transportation, and retail.
The components of an extraction supply chain—growers, extractors, distributors, transporters, and retailers—all have their own moving parts. If you can effectively engage in supply chain management, you can lower costs and kickstart a faster production cycle.
The tools required for solvent-based extraction vary greatly in size, function, and expense. While some extraction equipment is heavy-duty industrial machinery, other equipment is the size of a tea kettle. Regardless of size, all extraction equipment components work in concert to efficiently and cost-effectively produce a marketable product.
Spending money upfront for high-end technology is a smart investment. If you don’t invest in tech, you’ll end up having to replace your equipment every few years. And when you’re constantly playing catch up with equipment, it’s impossible to break into new markets or steady your business when markets dip.
Here are a few ways you can proactively update your technology:
Smart investments in extraction-related technologies will help you stay ahead of the curve.
Even while carrying out day-to-day operations, it’s vital for your business to have a goal that all team members share and understand.
A robust internal process includes a series of steps that a business uses to accomplish goals and identify areas that need improving. Internal processes don’t just help team members understand their responsibilities, they also enhance efficiency and productivity.
If your extraction team doesn’t understand individual roles and how they fit together, cracks are bound to appear. Improve your internal processes by:
The botanical extraction industry occupies a unique space in the marketplace. It’s not food and beverage, nor is it automobile or technology. If anything, it’s a lifestyle. This characteristic, in and of itself, means that its consumers share its unique qualities. Consumers interested in botanical extractions want brands that reflect their sensibilities.
This can be used to your advantage. Build your brand with an eye toward these consumers and the lifestyle they choose. Market your product with these buyers specifically in mind. When brand and marketing come together into something memorable, you’ll build trust with your customers and stand out in a singular way. Every time your product is seen on a store shelf, a customer will consider a purchase for years to come.
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