Innovation. A talented workforce. Strategic focus. These are all correct answers to the question, “What’s been the driving force behind Land O’Lakes, Inc.’s decade of steady growth?” In our highly volatile, increasingly competitive industry, it takes a little bit of everything to differentiate ourselves. In 2015, it was “merger’s” turn to lead the way in helping enhance our owners’ capabilities and help them compete.
Last year we completed the largest merger in our company’s history, joining two strong branded portfolios—WinField and United Suppliers—to better meet the needs of locally owned ag retailers. While the overlapping products and markets made this a logical move on paper, it was a shared commitment that makes the partnership a perfect fit.
It’s a commitment to our customers, our industry and our communities. It’s what being a cooperative is all about and, with nearly 150 combined years in business, it hasn’t steered us wrong.
Similar to Land O’Lakes, United Suppliers’ story began with a group of individuals in the ag industry coming together to strengthen their bargaining position. Where Land O’Lakes’ story involved 1920s dairy farmers looking to market butter on the East Coast, United Suppliers includes 30 independent feed mills banding together in 1963 to compete against emerging retail chains.
Later that decade, the company added the crop nutrients and crop protection businesses that are the key components of the long-term merger. Fast forward more than six decades and United Suppliers has sold off the feed portion of its business and evolved consistent with its founding mission.
“This team wakes up every day trying to figure out how to help our owners compete against the national chains,” says Brad Oelmann, president and CEO of United Suppliers. “With the merger there’s a lot of work to be done integrating new processes and systems, and we are committed to making sure this is successful and we continue to put the customer first.”
That commitment to helping the locally owned retailers is more important than ever. According to CropLife and company websites, in 2002, 67 percent of ag retail locations were independently owned and operated. In 2014, that number had dropped to 42 percent with 58 percent comprised of retail chains such as CPS, Helena and Wilbur-Ellis.
Both United Suppliers and Land O’Lakes, specifically through WinField, built their names serving this shrinking demographic through a network of member cooperatives and other locally owned and operated retailers.
“There are nearly 1,700 people working on behalf of the WinField and United Suppliers brands,” says Mike Vande Logt, executive vice president and chief operating officer, Winfield US. “Our teams are the best in the business and they’re coming together with a shared focus on helping our customers compete. When our customers succeed in helping the farmer it’s a win for all of us.”
(Local) customer first
Some may argue it would be easier for WinField or United Suppliers to go directly to the farmer rather than working through a customer network. Reality is that would go against our identities as member-and customer-owned systems. It’s also counter to market research.
According to a 2013 Purdue University study, large growers rated their local dealer technical support and sales staff teams as the first and second most trusted sources of information—well ahead of manufacturer representatives.
“We run a professional agronomy retail company and we can compete with large nationals,” says Doyle Pearl, general manager of J.B. Pearl Sales and Service in St. Mary, Kansas, a customer and locally owned and operated ag retailer. “At the end of the day, I believe we outperform. Our customers view us as their trusted advisor.”
Both WinField and United Suppliers’ models understand the power of the local, trusted advisor. Both models focus on helping those trusted sources succeed. And, we do it in different ways for different customers.
“Our organizations have a common goal, so coming together is about learning how we do what we do and evolving the two models to create something new that delivers new value to our customers,” says Brett Bruggeman, senior vice president WinField Strategic Development and general manager of United Suppliers CPP and Seed. “With our network of retailers, farmers have the opportunity to ‘buy local’ but still realize the benefits of working with an organization of our size and scale.”
A bright future
At the end of the day, whether the brand is United Suppliers or WinField, the responsibility is the same: support customer-owners—no matter the obstacle. With the merger, the combined business will help owners manage challenges that come with consolidation, which makes a difference for people like Darrell.
“Undoubtedly our biggest challenge is having the capital to purchase the assets we need to be efficient against the larger consolidated companies and the retail chains,” says Darrell.
What we’ll be together is still evolving, and it is unique in the industry. But we do know we will offer total agronomic capabilities to support the long-term strength of the trusted, locally owned and controlled ag retailer.
“The key is to always put the customer first and take nothing for granted,” says Brad. “I continue to be really excited. All the people at Land O’Lakes have been great so far and we share a similar passion around helping the owner compete.”