Keep Business Diversification Grower-Focused to Stay Relevant in Ag Retail
January 10, 2024 Grow West leaders have long viewed diversification as a contributor to long-term success for the agriculture service provider and its customers. How, why, and when the company diversifies must follow strict guidelines to identify the right products, services, and partnerships to continue the approach that’s been in the company’s DNA since Day One.
“There isn’t a day when we don’t think about our people and ask, ‘How do we do more of this?’” says Grow West Vice President and COO Lucas Schmidt. “We are always thinking about the ways we can work more efficiently and in ways that add more value for our customers.”
Smart business diversification leverages existing company personnel, expertise, assets, and strengths in sensible directions that create opportunity and value for customers and revenue for a company.
I look at opportunities that make sense and have the potential to generate customer value and sustainable financial performance. It helps to strengthen Grow West by catering to what we think our team is capable of executing and how that aligns with our customers’ future needs.
Partnerships That Matter to Customers
That philosophy is reflected in four partnerships that complement and augment the company’s capabilities in serving its customers. Mar Vista Resources sources raw materials around the world and manufactures crop protection and nutrition product packages specifically for Grow West customers. Grow West also collaborates with WaterLabs, an irrigation consulting business providing management recommendations for a range of crops based on real-time data. In its partnership with Inland Terminal, Grow West has a state-of-the-art liquid and dry fertilizer storage facility that facilitates efficient delivery to customers. Grow West ownership in Aligned Ag allows the company to maximize its purchasing power on a global scale, positioning the company to meet its customer needs throughout the year.
These partnerships all reflect the company’s commitment to smart diversification for the ag service provider and its customers, Schmidt adds. “It goes back to a customer’s basic crop production or management need, then ties back to the supplier in an existing or completely new space,” he says.
Diversifying for Short- and Long-Term Benefits
Timing is a big part of successful business diversification. Sometimes a proven history of performance, quality, or service to customers is more important than a brand new technology venture that’s something really exciting.
We want to be able to utilize our existing people and talent as we grow and diversity. It’s also got to be economically sound and work with what we’re already doing. Grow West doesn’t look at diversification quarterly or yearly. We look at things in terms of years or decades, because we want it to contribute to the long-term success of our customers.
Well-timed diversification of products and services also is sometimes a year-to-year thought process. That’s true for ensuring annual investment aligns closely with what the ag service provider’s customers need, according to Grow West Procurement and Supplier Relations Director Robbie Malm.
“No two years are the same. Every year, growers face a new set of issues, so we are constantly trying to evolve and adapt to changing times, so we provide what they need,” Malm says. “That sometimes means learning from previous years’ lessons, applying them to forecasting and diversifying the products we offer as we reinvest in the business.”
Partnerships, Not Takeovers
A major part of what makes a successful collaboration to grow the company’s portfolio lies in the mechanics of the relationship formed by that collaboration. For Grow West, it’s about partnerships first, acquisitions second.
We take the approach of creating partnerships with other companies when we diversify. We seek strong, enduring relationships instead of competing with them. We are partners first and foremost, and that’s why I think we’ve had some good success in diversifying what we offer our customers.
Answering the right questions, aligning with existing organizational strengths, and focusing efforts on what’s best for growers will continue to drive efforts to evolve through diversification.
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