Today we’re going to talk about something that, from outside the sector, can look like a character flaw, a psychological problem, even a lack of business ambition: the extreme conservatism of fresh produce companies.
If you’ve ever worked with growers or with companies in the sector, you’ll have noticed a widespread tendency towards caution. Towards not taking on too much debt. Towards diversifying crops even when it’s inefficient. Towards keeping cash reserves that look excessive. Towards turning down opportunities that, on paper, could carry high market value.
Consultants from other industries — when they pass through the sector — tend to read this as irrational risk aversion. As a lack of strategic vision. As that ancestral rural conservatism that just needs to be overcome through training and modernisation. Basically, they think we’re a bunch of stubborn, pathologically distrustful hillbillies.
And they’re wrong. Deeply wrong. What looks like irrational paranoia is, in fact, the perfectly rational response to an environment where the risk of ruin is always in the room. And today I’m going to explain why, using some ideas from mathematician, trader and writer Nassim Nicholas Taleb. His work has helped me put words to something the sector has grasped intuitively for generations.
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