Date post: | 06-Apr-2017 |
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Land O’Lakes, Inc.
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©2015 Winfield Solutions, LLC
Dave Van Dam – Director, WinField Proprietary Pesticides
Biologicals: A Distributors View
2©2015 Winfield Solutions, LLC
Three-Step Supply Chain
Farm Gate Excellence
Infrastructure
Crop Nutrients
Grain
Energy
Retailers
R & D
Market and Business
Development
Grower Demand
Insights
Distributors
Distribute
Manufacturer Brands
Private Label Brands
Seed and CPP
Adjuvants
Micronutrients
Seed Treatments
PGRs
Diverse Sales Team
Basic
Manufacturers
3©2015 Winfield Solutions, LLC
A Bright Future for Biological Products…
• Regulatory advantages support R&D investment
• Investment will continue to drive innovation
• Innovation successes will drive market acceptance/demand
4©2015 Winfield Solutions, LLC
Challenges• Product efficacy
• Shelf life and logistics
• Storage issues
• Compatibility and mixing issues
• Grower and retailer education
• The ‘snake oil’ problem
Benefits
• Yield left on the table
• Better alternative to conventional chemistries
• Enhancement of other products
• Environmental impact
… but today the challenges outweigh the benefits.
5©2015 Winfield Solutions, LLC
Think with the end in mind.
• What crop is this being developed for?
• What is formulation type?
• What is the package type?
• What is the shelf-life?
• Do you have the sales team to create demand?
6©2015 Winfield Solutions, LLC
Broad Acre Row Crops vs Specialty Markets
Corn93 M
Soybeans84 M
Cotton10 M
Wheat55 M
7©2015 Winfield Solutions, LLC
Product Movement
• Many places to store product• 100’s of warehouses
• 1,000’s of retail outlets
• Inventory shelf-life is critical
• Application Season• Application season is often very short
• Move a lot of product in short period of time
• Need to ship product into the channel 3-6 months before application season
• Shelf-life• >3 years is preferred
• =2 years is manageable for higher margin
• <2 years requires logistics investment and higher margin
8©2015 Winfield Solutions, LLC
Inventory Management
• Temperature Control• Not all trucks heated/cooled
• Not all storage is heated/cooled
• Many facilities don’t have refrigeration
• Shelf-life• Retails buy in bulk tanks, shuttles, or
pallets of product.
• Inventory often carries over to next season
• Expiration Dates• Not easily managed
• Products with short shelf-life have mandatory product return process at end of season
9©2015 Winfield Solutions, LLC
Ideal Package Size
• Low use rate products preferred
• Granule vs Liquid• Liquid often preferred for tank-mixing
• Granule preferred for logistics
• Can you make a granule that mixes well?
• Bulk• Preferred for high volume products
• Shuttles• Most flexible logistics option for large volume
products
• Cases/Jugs• Most common: 2 x 2.5 gal jugs (2 x 10L)
• Common, less preferred: 4 x 1 gal jugs
10©2015 Winfield Solutions, LLC
Tank-mix Ability
• Application Costs
• Ground Sprayer: $5-$8 per acre
• Aerial Sprayer: $7-$10 per acre
• Tank-mixes
• Many corn and soybean applications include 7-10 products per
tank
• Herbicide, insecticide, fungicide, micronutrient, adjuvants
• Will your product tank-mix with all these products?
• If not, does it offer enough value to the grower to make
another separate application?
11©2015 Winfield Solutions, LLC
Inoculants: A Case Study
Packaging: 2x2.5-gallon & 135GA Bulk
Max Rate: 24oz/ A
Registration: 39 states
Storage Temperature: None
Inoculants promised significant benefits…
- Very visible benefits- Plant Health - Increased Yield- Lower fertilizer cost
But they had some major challenges…
- Logistics – Too hot, Too Cold
- Shelf life – carryover inventory
- Inventory returns management
- Treated logistics like pesticides, but needed to think more like seed.
12©2015 Winfield Solutions, LLC
Inoculants Sales Tripled Once Logistics Resolved
Packaging: 2x2.5-gallon & 135GA Bulk
Max Rate: 24oz/ A
Registration: 39 states
Storage Temperature: None
Packaging: 2x2.5-gallon
Max rate: 25.5oz/ A
Registration: 20 states
Storage Requirements: 40 degrees F
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Product Logistics Issues
Distribution and RetailsDrive Demand
Time for new innovations
13©2015 Winfield Solutions, LLC
Think with the end in mind…
• What crop is this being developed for?
• Specialty crops vs Row crops
• What is formulation type?
• Dry granules vs Liquid
• What is the shelf-life?
• > 2 years: limited inventory concerns.
• < 2 years: what will be your inventory return program?
• What is the package type?
• Jugs, Bags, Shuttles, Bulk
• Do you have the sales team to create demand?
• If so, do you have funding for marketing campaign for your brand?
• If not, have you considered a distributor private label?
14©2015 Winfield Solutions, LLC
A Bright Future for Biological Products…
HOW CAN WE HELP YOU SUCCEED?
WINFIELDEXPERTISE
INSIGHTS
PRODUCTS
PROGRAMS
SERVICES