Equipment And The CropLife 100: The Big Getting Bigger
Following several years of uneven growth, the biggest equipment manufacturers re-established their market dominance in 2011. But will it last?
November 14, 2011
For the past few years, one of the most interesting and followed parts of our annual CropLife 100 coverage has come from the equipment sector. This is particularly true for the self-propelled sprayer market. Based upon the historical perspective, this part of the ag retail equipment industry has largely belonged to sprayers painted in either white (Spra-Coupe) or yellow (Ag-Chem) colors — brands which in recent years have fallen under the AGCO Corp. umbrella. In fact, when the CropLife 100 survey first started tracking these statistics, respondents indicated that approximately eight out of every 10 sprayers on their facility lots carried the Ag-Chem or Spra-Coupe names.
However, in the latter years of the first decade of the 21st century, this market dominance by AGCO brands began to wane. From market shares consistently in the 80%-plus range, AGCO's overall placement on retailer lots started to fall. In fact, during the 2010 CropLife 100 survey, respondents indicated that only 72% of their sprayer fleets consisted of AGCO units, down 3% from the 2009 survey. Worse still for the company, this percentage put AGCO within striking distance of its nearest rival, John Deere, which held a 70% market share. Indeed, there was speculation that with a little market push and good fortune, John Deere could tie or top AGCO's market share leadership position by the time the 2011 CropLife 100 survey was completed.
But it didn't happen. When the final numbers from this year's CropLife 100 were tallied, AGCO had not only held off its main rival, but firmly re-established itself as the clear sprayer market leader. According to respondents, AGCO sprayers make up 87% of CropLife 100 retailer fleets, up an impressive 15% from the prior year. Better still, this is on par with the mid- to high-80% market share AGCO held back in the early 2000s among the nation's largest retailers.
As for the reason why AGCO has managed to reverse its market fortunes, most respondents credit the company's aggressive line of new sprayer options for both the Ag-Chem and Spra-Coupe brands in the past year for convincing them to purchase the company's products. This included brand new RoGator models such as the 1300 and an updated Spra-Coupe (now sporting a more orange-like color scheme).
No Second Place Slouches
As for AGCO's largest competitors, John Deere and Case IH, 2011 was anything but a down year. Although neither company was able to match AGCO's sales growth among CropLife 100 retailers, both did manage to grow their market shares nonetheless.
For sprayers painted in green colors, 2011 was another solid second place finish. According to CropLife 100 retailers, 79% of their sprayer fleets are John Deere models, up 9% from the 2010 total. Like its larger market share rival, John Deere has been fairly aggressive in new sprayer development during 2011 with the continued emphasis on the company's series sprayers and the launch of the new 4940 unit.
When it came to sprayers painted red, 2011 was also a solid year. Case IH sprayers made up 66% of CropLife 100 sprayer fleets this year, up 4% from the 2010 total. As in the case of AGCO and John Deere, new sprayer model developments and launches kept Case IH units popular in the eyes (and pocketbooks) of ag retailers.
With the intense fight for market share among the Big Three manufacturers, smaller companies tended to see their piece of the ag retailer pie drop during 2011. For example, Hagie units represented 28% of sprayer fleets at CropLife 100 retailers, down from 32% in 2010. Likewise, GVM sprayers saw their market share fall 4%, from 22% in 2010 to 18% this year.
On the other hand, sprayers sporting the Miller-St. Nazianz's name and colors were present at 15% of CropLife 100 retail facilities, up 2% from the 2010 total.
Better Red Next Year
So now that AGCO has successfully defended and grown its share compared with all other sprayer manufacturers in 2011, the question becomes can this market momentum last? For some indication of this, let's consider another part of the CropLife 100 questionnaire which focuses on ag retailers' intent to purchase going into the coming year.
When retailers were asked which company sprayers they planned to buy in 2012, Case IH finished top of the list at 55%. This was an impressive 16% jump from the number of retailers who planned to purchase Case IH sprayers during the 2010 survey.
In second place on the Intent to Purchase list in 2012 is John Deere. According to 51% respondents, they plan to buy green sprayers next year, down slightly from 2010's 54% total.
As for AGCO sprayers, only 33% of CropLife 100 retailers are looking to purchase these models. Still, this is an increase from the 28% of respondents that were looking to buy the company's units in 2011.
Still, if there is cause for concern for AGCO's market share fortunes in 2012, it could come from the service side of the business. According to various industry sources, part of the reason AGCO sprayers have been less popular among ag retailers in recent years ties to service.
So for the 2011 CropLife 100 survey, we asked respondents which sprayer manufacturer offered the best customer service based upon their experiences with the major players. On this list, John Deere's services finished in first place, noted as exceptional by 37% of those surveyed. Case IH finished a close second at 30%.
As for AGCO, the company was noted as the best customer service provider by 24% of respondents, better than 13% lower than category leader John Deere.
So in other words, there should continue to be a heated battle for sprayer market supremacy among the major manufacturers.
Sfiligoj is the Editor for both CropLife and CropLife IRON magazines. He travels regularly to cover industry events and has been dedicated to the ag retail industry since he joined the staff in 2000.