Familiar Themes Gaining Steam for Ag Retailers in 2021 and Beyond
December 28, 2020 As an agriculture journalist, I ask a lot of questions and dig into a lot of interesting stories in this crazy industry. I’ve been fortunate to live in very “interesting” and rapidly evolving times, from the advent of biotech crops to the influx of cool technology.
But nothing beats the “long look” — imaging a snapshot of our industry segment, say, five years into the future, and laying down the pavement of issues, ideas, and initiatives that will get us from the here and now to that thriving and sustainable business of tomorrow.
The wild gyrations of the year that was, and the increasing pressure on agribusiness overall, got me to thinking again about that five-year window directly ahead of us. So, as part of our ongoing PACE Executive Series activities, we’re releasing what we’re calling the Retail 2025 Report.
By the time you are reading this, I will hopefully be in the final throes writing the report. I’ve had the opportunity to speak with dozens of individuals, and to conduct some digital research on the topic. The exercise has provided some terrific insight.
Overall, despite a pretty upbeat fall application and soil testing season, there lies several challenges the distribution channel will need to manage to get to December 2025 not only intact, but ready for the next five-year plan.
You’ll have to read the report for the details, which will be released on CropLife.com next month, but some of the issues I’m hearing are the same issues we’ve been talking about for quite some time — just with added intensity.
One of my conversations was with Vern Hawkins, President of Syngenta Crop Protection. He sees a couple of key factors that should cause retailers to take a deep dive into their business practices and philosophies. First, the pressure from shrinking margins that’s played a part in manufacturer consolidation will drive further attrition in the number of retail entities. Second, farmer consolidation will continue to accelerate, changing the service landscape for trusted advisers.
Not new issues to be sure, but Hawkins sees the threat as growing and increasingly “real” for ag retailers over the next couple of years.
“Retailers will have to make some choices about priorities,” he says, from the suppliers they choose to work with to the farmer-customers they serve.
On the customer side, retailers need to meaningfully focus on value-centric relationships with a segmented grower base that will recognize and pay for that value. “Customers have to be aligned with the same vision of the value the retailer provides.”
Syngenta sees its engagement with retailers in the same light — providing a level of value to retailers that earn a higher level of brand loyalty for value delivered.
“I think the reality is that retailers will need to align with fewer like-minded companies,” says Hawkins. From the retail perspective, a bigger commitment to partners on both sides —input manufacturing downstream and the farmer upstream — will be required. Again, customer segmentation and supply partner selection are issues we’ve been addressing for some time. But putting purposeful plans in place to address these emerging trends is taking on added urgency.
Look for more on this and other issues in the Retail 2025 Report. Until then,all the best to you and yours in the
year ahead.
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