A Sacred Trust
September 9, 2008
Although I’ve been active in the ag retail community for eight years, I have unintentionally picked up a nickname that harkens back to one of my earlier trade journalism careers. I was reminded of this fact at the recent Commodity Classic show when I introduced myself to someone I’d never met before who had seen my picture in the magazine.
“Oh,” said the Midwestern ag retail representative. “You’re the beverage guy — the one who’s always saying our industry is like the soda business.”
OK, I can take a hint. Since taking over this editorial page a few years ago, I’ve apparently spent too much time comparing the similarities I see between today’s ag retail business and the beverage world I covered for a dozen years back in the 1980s and 1990s. So for this month’s column, I can promise you I won’t be comparing how the our marketplace is headed in the same direction as the one I knew 10 years ago in terms of consolidation, general business practices, or management structure.
Instead, let me take this opportunity to explain what I see as the one undeniably unique aspect of the ag retail business compared with the beverage industry, or any other, for that fact. Essentially, this “point of uniqueness” boils down to a single word. But it’s a very powerful word, which accurately portrays the role ag retailers play within the general agricultural economy. Without this particular characteristic working in their favor, ag retailers could easily be headed down that same road to irrelevance that my old friends in soft drink bottling seem to be going toward at an increasing speed.
The word is “trust.”
By their nature, ag retailers have a very special — and in many cases, long lasting — bond with their grower-customers. Again, I was reminded of this fact at the Commodity Classic. During one press briefing hosted by a crop protection manufacturer, one attendee asked a speaker if some of the industry’s recent trend toward grower application meant ag retailers would find their role diminishing.
“Not at all,” said the speaker. “Our research shows that 70% of grower decisions regarding crop protection and application work is made based upon retailer recommendations. Even with today’s easier-to-apply chemistries, retailers are still able to put together the best packages with companies and pick the best products from each for their grower-customers to use.”
This speaker went on to cite some very eye-opening statistics on how deeply this trust between retailers and grower-customers goes: The average amount of time a grower has worked with the same retailer is 17 years. On the reverse, the average amount of time a retailer has worked with the same grower-customer is 30 years.
Over the years, I’ve talked with ag retailers who have built up strong friendships with their grower-customers. This has included attending holiday parties at their homes or serving as godparents to their children. In 12 years of covering the industry, I never met a beverage bottler that had these kinds of relationships, either with their suppliers or customers.
Trust is the hallmark of this business. Without it, ag retailers are no different than any other distibutor based industry. With it, however, they are something totally unique.