Timber focus restricts service development

To be able to realize their forest ownership when, for example, time or knowledge is not sufficient, services are an important support for forest owners. However, a study of the forestry organizations’ strategies to reach “new” forest owners shows that communication and marketing are more focused on securing access to raw materials than meeting the increasingly diverse needs of forest owners.

In recent years, the interest in “new” forest owners has increased – both in research but also within the forestry organizations such as companies, forest owner associations and others. This is because forest owners are often seen as increasingly heterogeneous – with different forest backgrounds, knowledge and interests – and thus as “new” types of forest owners. For example, some new forest owners may have inherited their forest but live far from the property and have other main financial income. “New” forest owners also differ in, for example, the economic, ecological, or social motives and driving forces they have for forest ownership. In studies, some “new” forest owners have, among other things, expressed more limited need to focus on economic timber output from the forest and instead evaluated, for example, conservation or alternative uses of the forest. All new forest owners are not either familiar with the forestry concepts and the use of forestry. An interview study with the fifteen largest players in the Swedish forest sector, focusing on strategic challenges and service development, underlines this change and that the sector also needs to relate to forest owners with different prior knowledge and interests.

 

What are forest services, and for whom?

With its strong focus on timber, and its processing, the forest sector’s focus has traditionally been on developing products, while services have primarily been seen as a means of supporting and ensuring timber access for the industry. This has meant that the service offer has historically been quite narrow and mainly focused on those parts of timber production that meet the needs that more traditional forest owners might think (such as rejuvenation, thinning, harvesting and more).

In order to meet the needs of “new forest owners”, previous studies have emphasized that the major challenge may lie primarily in the organizations that can conceivably develop and offer new and more customized services. The challenges are closely interwoven with the state of the service market. In the Swedish context, this is largely dominated by major players and organizations that often have their own processing industry, which shapes the services offered.

This means that although different services can be seen as something positive and value-creating (both financially and socially), it is not always clear whose and what needs and goals they aim to meet.

 

Relationships should create new customers

The interview study shows that the range of services, and its development/adaptation, is increasingly an important relationship-building activity that, from the organizations’ perspective, should build links between the forest owner and individual organizations. It is by equating forest services with another forms of service consumption that many of these organizations see an opportunity to bridge the geographical and social distances to the “new” forest owners. By packaging the service offering in new ways, many organizations hope to be able to increase the frequency of purchases/consumption but also the time frame for consumption (for example through longer service or support agreements).

But even though there has been a widening of the service offering (for example various administrative services) in recent years, a large part of the “new” service offering to date has been either old (pay) services that have been repackaged, and communicated in a new ways, or services that were previously largely included in the timber business (such as consulting).

 

Old services in new clothes

The study highlights that greater emphasis has been placed on communicating what services are available rather than developing entirely new services. Many interviewees at the organizations express a greater focus on the needs of “new” forest owners who relate to traditional timber production, while the needs that fall outside this are seen as less relevant or not focused at all. The communication of the various services that are available is also largely seen as educational and as an opportunity to develop the customer’s knowledge of a more traditional (timber-oriented) forestry.

The study shows that the majority of the service offerings aim to directly or indirectly support the use of timber production, either through a withdrawal through thinning or harvesting in the short term or through a concrete long-term relationship. In many cases, services were an integral part of, or driving force for, a timber purchase – which increases the consumption elements in the business deal and relation. Many organizations showed limited interest in assignments/services that were not directly related to traditional forestry and timber production.

To some extent, forestry organizations’ emphasis on communication rather than change in service offerings can be seen as a focus of forestry organizations on trying to customize customers (through communications and relationship building) to a greater extent than on adapting/developing their own business to meet increased and more diversified service and service demand.

Service for timber or forest owner needs?

The service market, as it appears, therefore creates difficulties in fully understanding the needs of forest owners, in their entirety, in terms of services.

In a market that works optimally, needs that fall outside the more traditional forestry had been picked up by other players and organizations that have a different focus and service offering. As the organizations in this study strongly dominate the service market, the scope for this greatly diminishes. Although there are smaller players who meet, and could potentially meet, other needs, they are often quite limited, both geographically and in terms of resources in order to meet and develop new services.

To understand these needs through the services offered today, it is therefore arguable that it mainly reflects a part of the forest owners and the interests and structures of the forestry organizations. As with other studies in related areas, this study thus emphasizes the path dependency that the forestry organizations, both based on their traditions and size, create and which may limit adaptation to a more varied forest ownership. The study thus highlights the policy-related and organizational challenges that forest ownership and the Swedish forest sector face in communicating and making forest services and forest ownership interesting for many different types of forest owners.

 

Fact

Elias Andersson & E. Carina H. Keskitalo (2019) Service logics and strategies of Swedish forestry in the structural shifts of forest ownership: challenging the “old” and shaping the “new”, Scandinavian Journal of Forest Research, 34(6), pp. 508-520.

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