At Home In Kansas
Even after making some substantial outlet acquisitions, Ritter Crop Services is perfectly happy to limit its market reach to its home state.
September 9, 2008
Back in 2000, says General Manager Dan Kennedy, a sale of the retail operations was being considered. But, after two years of searching and finding no suitable buyers, company owner E. Ritter & Co. reconsidered its decision. Instead, E. Ritter doubled its commitment to ag retail and began an upgrade and expansion of the operations that continues to this day.
"When you think about it, it's pretty amazing that a company would go from shopping a part of its business to making it a priority for growth and commitment going forward," says Kennedy. "But then again, when you look at how long Ritter as a corporate entity has been committing resources, money, and people to our local area, it isn't that much of a surprise."
A Century In The Making
To appreciate this level of commitment to its home base, it's helpful to look back at the 118-year history of Ritter's ownership group. What is now Ritter Crop Services began as a mercantile business in 1889 started by founder Ernest Ritter. At the time, the senior Ritter also ran a railroad telegraph operation.
For the next few decades, Ernest RitÂter started different companies in and around the Marked Tree area. Before he passed away in 1921, he had built a mini business empire in the town, running a trio of sawmills, founding the local telephone company, and building a cotton gin. Today, many of these businesses remain important segments of the E. Ritter family of companies. Other companies in the portfolio include Ritter Grain Services Co. and Ritter Oil Co., which sells bulk petroleum and lubricants.
Throughout his years, says Kennedy, the senior Ritter never passed up an opportunity to help his community grow and prosper. "Besides starting the telephone company so people in the area could communicate with their loved ones in other cities and states, Ernest also founded a water works and electric company," he says. "He was always looking for ways to help the area. In fact, part of E. Ritter Co.'s mission statement talks about 'strengthening our communities,' and the company has always operated with this as a guiding force."
From its mercantile roots, the first ag retail outlet gradually shifted its focus from selling all consumer goods and some farm materials to strictly providing crop inputs. At the beginning of the 21st century, Ritter Crop Services still maintained its one location in northeastern Arkansas, with overall crop input sales split into nearly equal percentages for fertilizer, crop protection products, and seed. The outlet also did some custom application work for the cotton and soybean growers in the area. The retail operation was run in conjunction with Ritter's grain elevator business, sharing some employees and resources along the way.
"Because it wasn't as profitable as grain, Ritter considered selling off the retail side of the ag business from 2000 to 2002," says Kennedy. "But since the company couldn't find a buyer, the decision was made to keep it and significantly expand this side of the business."
New Facilities, New Acquisitions
As part of this new investment, Kennedy joined Ritter Crop Services at its Marked Tree facility. A new, more modern-equipped Marked Tree outlet was opened shortly thereafter, he adds, along with four more satellite locations throughout northeastern Arkansas between 2002 and 2006. This brought the total number of company facilities to five.
But Ritter's owners realized this initial expansion would only go so far in securing the company's market presence. "In 2005, the company conducted a strategic planning session to determine where it wanted the retail operation to be in five years," says Kennedy. "The two things that were obvious to everyone were that, one, Ritter needed more critical mass and, two, a deeper grower-customer base, if it wanted to survive and grow."
As fate would have it, Ritter was in luck in obtaining both market objectives. Early in 2006, Lawhon Farm Services — a six-outlet independent dealership located in nearby McCrory, AR — was considering a sale of its retail assets. According to industry rumors, Lawhon's owners had decided to focus their attention and resources on the company's existing seed business and on building up its fledgling ethanol plant group. Its retail group was the odd division out.
Of course, says Kennedy, Ritter Crop Services saw the picture in a completely different light. "This was a perfect fit for what our owners wanted Ritter Crop Services to become," he says. "Lawhon had some well-established outlets in our section of Arkansas with dozens of loyal customers. The employee base at Lawhon also was top notch. It's easy to add buildings to your operations if you want to, but you can't always find people with the kind of hands-on, industry knowledge that worked for Lawhon. All around, this couldn't have been a better opportunity for us to grow."
Despite its more impressive size, however, Kennedy emphasizes that Ritter Crop Services remains true to its background. "Being a small independent, we can move — and move more quickly — than larger retail operations," he says. "We've been at this business for almost 120 years. We know our customers and they know us."
In this spirit, he adds, the company has no plans to expand beyond its traditional northeastern Arkansas territory.
"We are not another UAP (United Agri Products), and we never will be," says Kennedy. "Even with our strategy to grow the company during the next 20 or 30 years, our expansion plans don't extend beyond a northeastern Arkansas focus. This is our comfort zone. These are the people Ernest Ritter was trying to help when the company got its start more than a century ago. Why should we change that approach now?"
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.