Keep Business Diversification Grower-Focused to Stay Relevant in Ag Retail
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 Grow West team 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?’” said 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.
“We look at opportunities that make sense and have the potential to generate customer value and sustainable financial performance,” said Grow West President and CEO Ernie Roncoroni. “It helps us strengthen our company 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 Grow West customers
That philosophy is reflected in three recent partnerships that complement and augment Grow West’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.
These partnerships all reflect the Grow West commitment to smart diversification for the ag service provider and its customers, Schmidt added.
“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 said. “Other diversification opportunities cater to strengthening ties to current and future customers in the ag space based on longer-term trends.”
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 Grow West customers is more important than a “brand new technology venture that’s something really exciting,” Roncoroni said. Rushing to the “next big thing” is not part of the Grow West approach.
“We want to be able to utilize our existing people and talent as we grow or diversity. It’s also got to be economically sound and work with what we’re already doing,” Roncoroni added. “We don’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 said. “That sometimes means learning from previous years’ lessons, applying them to forecasting and diversifying the products we offer as we reinvest in the business.”
Malm cites the rainfall in early 2023 as a driver of diversification in crop protection product options this year compared to recent drier years. “With increased precipitation, we will have more rice, dryland cereals and wheat acres this year. That changes the types of crop protection products and fertilizer our customers will need. So we have to be prepared,” he added.
Focus on people, not the ‘shiny object’
The entire Grow West team contributes to successful diversification, an approach Schmidt said has yielded gains throughout the organization’s history. The partnership with WaterLabs, for example, was borne out of a business idea from a Grow West PCA.
“It’s easy to get focused on the next shiny object that may not bolt on well to what you do or fully maximize your team,” he said. “It starts with people with passion, expertise and a history of customer support who feel comfortable bringing up ideas and having a voice to go to company leaders and offer an idea that contributes to how we service our customers. We have a lot of smart people and we deliberately work to maintain a forum for all employees to share ideas. New concepts and solutions don’t always have to come from our company’s leadership.”
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 Roncoroni, 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,” Roncoroni said. “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 Grow West’s efforts to evolve through diversification.
“As long as we prioritize our customers and employees in finding the right opportunities, we can continue to evolve Grow West to make sure we’re around for our customers for a long time as they adapt too,” he said. “We will keep evolving our business to make sure we’re always relevant to our growers.”