Rightsizing Ag Retail
The Agricultural Retailers Association (ARA) annual meeting is always a great way to close out the year. We get to see a lot of old friends, chat up attendees on the year behind us and the challenges and opportunities that lie in the season ahead.
The conference portion of the event is usually pretty solid, and last year was no exception. But the kicker for us was getting to hear from the retailing industry’s living, breathing lightning rod, Kenny Cordell.
Cordell, president of Pinnacle Agriculture Holdings LLC, is a “love ‘em or hate ‘em” guy in the retail world. There’s no denying that he’s had a successful career, first with BASF, then FMC before leading United Agri Products for five years toward its ultimate sale to Agrium Retail in 2008.
But his aggressive tactics have made him plenty of enemies along the way. So much so that there was some boycotting of the ARA Conference by organizations that did not wish to support a meeting that featured Cordell as a speaker.
Of course, the prospect of controversy got us a bit excited for his remarks, and I asked the editorial team to stay on for the entire conference to hear what Cordell would say.
It was a good speech overall — he used a PowerPoint but only occasionally referenced it and did not carry any crib notes. His gravelly, southern-twinged accent had a homespun feel, but his words left no doubt that Pinnacle is a company on a mission.
Interestingly, the main messages have been spoken before, probably hundreds of times, but I’ve not heard them proclaimed loudly and publicly for quite a while. One of his central themes was there are too many retail locations.
I went back to the archives of my early days here at CropLife® magazine in the late 1990s and early 2000s and found this theme repeated in open meetings and advisory groups over and over again. Some 15 years later, it’s still an issue.
I was talking this over with Ron Farrell, who’s spent some four decades on the inside of retailing, and he agrees that we’ve got a long way to go to “rightsize” retailing.
I know it’s much easier said than done, but too often mergers and acquisitions don’t foster tough, realistic conversations about the need to close down facilities that are no longer efficient. Too often, “satellite” facilities are left open with one or two employees for the sake of saving face with municipalities and grower customers. But their revenues do not warrant their existence.
We have no doubt that retailers have a critical role in the long-term future of ag, and are the trusted adviser to the grower. But long-term sustainability and competitiveness will require that we operate at maximum efficiency.
Cordell also chided the industry for not having yet fully adopted a consistent system of barcoding products another long burning theme for the distribution channel.
Love or hate Mr. Cordell, his points on the need for improved efficiency are, I believe, well taken. Seeking the right balance of facilities, efficiency and customer service will make our businesses stronger and, truth be told, more capable of competing effectively with the likes of Pinnacle.