Specialty Crop Market Opportunity

December 9, 2010Dana R. Lonn, PE

Managing Director, Center for Advanced Technology

The Toro Company

What is the market opportunity?

• What is needed to make a potential new market successful?– Meets an identified customer need either

articulated or unarticulated

– Solves a customer business problem where value exceed the cost

– Has sufficient scale to be worth the investment to develop the product

– Has geographic diversity

Hypothesis

• Mid-sized acreage sites represent a larger opportunity– 25 acres to 1,000 acres– <25 acres too small to justify automation

• Hobby farm• Large garden• Low revenue

– >1,000 acres large enough to justify custom automation

Acres Specialty Crops

Medium Operations

5

Larger Market of Farms & Total Acres Percentage, Strongest Area of Potential

Source: 2007 Census of Agriculture

Farms 25-1000 Acres

6

Potential Market Spotted: Greater Amount of Farms, With Largest Amount of Acreage

Large Operations

7

Not Enough Farms to Make This Market a Feasible Choice

Source: 2007 Census of Agriculture

Small Operations

8

Largest Market of Growers, Yet Acreage Small & Logistics Potentially Not Feasible

Source: 2007 Census of Agriculture

Worldwide Statistics

9

*Includes: Pecans, Almonds, Walnuts, Pistachios

Next Steps

• Test the hypothesis

• Watch customers to identify automation opportunities

• Better understand business model

• Are there opportunities to combine across crops to increase the scale?

• Develop proof of concept prototypes to test innovation