biologicals: a distribution view

Land O’Lakes, Inc.

>

©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


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


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.


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?


Broad Acre Row Crops vs Specialty Markets

Corn93 M

Soybeans84 M

Cotton10 M

Wheat55 M


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


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


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


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?


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.


Inoculants Sales Tripled Once Logistics Resolved

Packaging: 2x2.5-gallon & 135GA Bulk

Max Rate: 24oz/ A


Storage Temperature: None

Packaging: 2x2.5-gallon

Max rate: 25.5oz/ A


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


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?


A Bright Future for Biological Products…

HOW CAN WE HELP YOU SUCCEED?

WINFIELDEXPERTISE

INSIGHTS

PRODUCTS

PROGRAMS

SERVICES

biologicals: a distribution view

Science