Real Agriculture: Independents play key role as agribusiness consolidates

An interview conducted by Bernard Tobin and published on Real Agriculture on July 25, 2017.

Agriculture’s Big 6 seed and chemical companies are pretty busy these days sorting through the details of mergers and acquisitions and keeping an eye on their mega competitors.

The club, which includes BASF, Bayer, DuPont, Dow, Monsanto and Syngenta, are deep into their post commodity boom strategies, with a key focus on efficiency and shareholder value. But what about smaller, independent input suppliers? Where do they fit into the changing agribusiness landscape?

Illinois-based Verdant Partners consultant Garrett Stoerger believes the independents will face challenges in the wake of mega mergers, but there’s also tremendous opportunity. Stoerger was in Ontario recently to speak to growers at the C&M Seeds Industry Day.

In this interview, he tells RealAgriculture’s Bernard Tobin that independents who focus on customer service, delivering the right product for the right acre, and build a strong brand can take advantage of the market distraction that bigger companies suffer as they work through the consolidation process.

Stoerger says farmers are not big fans of mergers that tend to shrink the number of competitors working to win a farmer’s business. In this scenario, he believes independents who can deliver service, value and the right product mix have a strong opportunity to attract and maintain customers and grow their business.

Stoerger notes that smaller, independent companies are well-positioned because they invest in innovation and have the ability to deliver seed technology, for example, that addresses local growing challenges and opportunities. Innovation tends to start at the smaller, independent level while bigger companies tend to focus on commercializing innovation, he adds.

There’s also opportunity for independents to focus on smaller and mid-sized farmers who value exceptional customer service, says Stoerger. “Larger farmers are limited in number and they’re everyone’s target.”