Word-of-Mouth Farmer-Dealer Networks Shake Up Distribution
In an industry that is constantly striving to revamp its public image, there’s no getting around the thorny issue of wasted fertilizer.
As a recent FAO report from the UN states, “Poor use efficiency of current fertilizers is a major issue. For instance, in China, the world’s largest consumer of nitrogen fertilizer, up to 50% of the nitrogen applied is lost by volatilization and another 5% to 10% by leaching.”
A study from Tamil Nadu Agricultural University in India found that, “Nutrient use efficiencies of conventional fertilizers hardly exceed 30-35 %, 18-20 % and 35-40 % for N, P and K respectively.”
According to Czech chemical raw material importer/exporter Ag Chemi Group, one of the most promising research topics for improving plant nutrition is in the field of nanofertilizers. As a study published in May 2018 in the peer-reviewed Journal of Agriculture and Food Chemistry states, “Mineral fertilizers are key to food production, despite plant low nutrient uptake efficiencies and high losses. However, nanotechnology can both enhance crop productivity and reduce nutrient losses. This has raised interest in nano-scale and nano-enabled bulk fertilizers, hence the concept of nanofertilizers.”
Enter a U.S. company shaking up distribution of said nanofertilizers.
AquaYield was co-founded in 2014 by a trio of Salt Lake City-based ag industry vets: Warren Bell, Chairman; his son, Clark Bell, Chief Executive Officer; and Mike Bullock, Chief Operating Officer. All of its fertilizer products are applied at a nano-scale 4 ounces to the acre.
Rather than focusing solely on the traditional retail distribution chain, the company launched its own farmer-dealer network, hoping to appeal directly to farmers’ desires to have more of a say on product choice, while at the same time allowing them to become their own dealer and provide some cash flow.
It currently has 26 farmer-dealers in the network and is aiming for 30 by the end of 2018. At the pace business is moving, Bell says he won’t be surprised if he starts 2019 with 50.
“The network is word-of-mouth at its finest and eliminates individual corporate sales reps in the same area,” Mark Mitchell, Director of Sales, says. “We try and protect our dealers that we have in place. We are not going to sign up another dealer that’s 20 miles away. We execute an MOU, and if they follow through with minimum orders, we will protect them as a dealer within a certain radius. They have sales quotas and data collection methods they have to put together.”
“The reason we started this enterprise,” Bell explains, “is that we weren’t OK with the fertilizer status quo. When we saw what nanotechnology could do with crops, that’s when we knew we could potentially disrupt a very mature market.”
AquaYield has already teamed up with a handful of large retailers, including one that made the upper fifth of the CropLife Top 100 list.
But there is a reason it has latched onto the farmer-dealer network concept, says Mitchell.
“Farmers right now are getting hit from every angle – whether it’s equipment, fertilizer, chemical costs, or labor. It’s gotten to the point almost where it’s almost impossible for the farmer to make money let alone break even. I think for the most part, farmers are tired of getting pushed around by the big guys. We want to put some control back into the hands of the grower and let them be the dealer, and let them decide what they can and can’t do, and show them that they can make money by reducing input costs.”
Bell adds: “There is a huge variance as to what’s going on in the supply chain in ag. We have a lot of conglomerates that have purchased one another, and with the advent of precision agriculture and other changes in technology going on in ag, there is a lot of uncertainty and discomfort. I’m a farmer, and my family has been farming out west since 1830s, and there’s been times where a lot of farmers develop a mistrust as to what’s going on with corporate distribution inputs. So we went with the guerilla method of going direct to farmer, and now having our products placed in a 2.5-gallon jug.”
Taking it Global
The company made its name in the Florida citrus industry partnering with Arcadia, FL-based TriYield to attack citrus greening. During the 2015-16 growing season, production increased 36%. This was at a time when production across the rest of Florida was dropping.
It has seen its products work on every variety of vegetable and fruit crops, and this year it is making a strong push in commodity crops, Bell says.
In recent months, it has reviewed “compelling data” from trials on corn in Michigan, Wisconsin, Iowa, Minnesota, and North Dakota, “that we are thinking on a minimum basis, will lead to a 5- to 10-bushel increase. Thus far, we have been able to cut their starter fertilizer by 20 gallons. It’s about $115 dollar increase to the bottom line, so that’s very compelling,” Bell says. “We want to see where that goes. It’s all about yield and all about quality.”
Results on potatoes are also strong: “NanoPhos is cutting input costs from 45 gallons on a starter down to 20,” according to Mitchell.
Another of AquaYield’s key products is NanoGro, a carbon-based biostimulant, helps build soil health for less than $7 an acre. NanoPro is its adjuvant that helps with delivery and uptake of specific herbicides.
“We knew that could potentially be disruptive to some of (the large ag retail) business models simply due to the fact that one pallet of our products, which is 180 gallons, has the capability of covering 5,400 acres, which is equivalent to what many of the leading ag retailers are capable of doing with a semi-truckload of product,” Bell says.
Eyeing global success across its 10-product line, AquaYield is expanding its footprint, adding farmer-dealer networks in Australia, New Zealand, and Japan in 2018. It is already in Canada, and expects to soon add farmer-dealers in Mexico and India to the network. Talks with growers in other countries, including Brazil and Argentina, are frequent.
“All of these markets represent countries whose commitment to agriculture and the environment fit our own product and corporate focus and purpose: using less and yielding more,” Bell says.
Mitchell adds: “We’re very excited able to go to small mom-and-pop dealerships, where can have a ½- to 1-ton pick-up in a small warehouse, and all they have to do is keep two to four pallets of inventory of ours – and they can generate really good cash flow and really make a dent into their community and help local growers.”