Giant views require perspective: fine-tuned, time-enduring, experience-driven perspective. During the past two decades, The Context Network has developed a uniquely keen understanding of the seed industry through our work with the world’s seed leaders in discovery, innovation and growth.
In the decade ahead, much will be required of seed industry participants working to compete, enhance market position and grow profitably. Understanding three components—the field of play, the level of play and the new components to the game—allows seed industry executives to carefully strategize and execute the best means to achieve those goals.
Field of Play
Some of the most dramatic changes are now structural fixtures and, like any sport, completely understanding the field of play or the structure of the industry in which you participate is critical.
Consolidation in the field crop seed industry has been dramatic and is unlikely to reverse. Product development is now in the hands of a few giant players. Although a few niche markets exist, they are limited. Anyone wishing to participate in the broad market must go to one or more of these players if they are to have competitive products. Trait performance and market acceptance of traits have driven this. Again, this is unlikely to reverse.
Many additional issues define an entity’s field of play, including intellectual property, overall pricing levels, grower demographics, farm income, communication technology, etc. Each is critical and impacts both how the game is played and what resources are needed to play successfully. The successful business of the future will have the courage to carefully understand the field of play and to be honest about how it impacts them.
Level of Play
Basketball is a great example of strategic teamwork. But during the past 40 years, the level of play has changed dramatically. A typical guard used to be six feet tall, 150 pounds and perform solid lay-ups. Today’s guards are six-foot-five, 210 pounds, and with a two-step leap, can dunk the ball from the free throw line. The rules of the game, the court and the field of play are the same, but as in the seed world, the “level of play” has intensified dramatically.
Inventory management has always been a fundamental (key success factor) for seed companies. The vast number of new traits and seed treatments within a company’s inventory has intensely raised the complexity and importance of this function. Annual hybrid refreshment rates have advanced from roughly 10 percent to near 30 percent. No longer is contra-season production an emergency measure to fill holes but an increasingly important component of a successful inventory management program. Forecasting sales has continued to grow more difficult. We only see it becoming more important in the future.
Other functions of a traditional seed company are still fundamental, but must be played at ever-higher levels. Product placement, seed treatment, customer information management, customer relationships, etc., are areas where the need for proficiency will be higher. Successful companies of the future either need to perform all these functions at the new and higher “level of play” or partner with others who can help them effectively compete at that level.
New Components to the Game
Precision agriculture tools top the list of game changers for the industry, as they allow precision product placement and management at levels never imagined 20 years ago. Data storage, processing technologies and applications almost instantaneously allow growers to turn data into information and communicate it to suppliers and partners, all while moving real-time across their fields.
Similar updates in breeding, product testing and agronomic management have changed the level of knowledge and education required. Crop production factors including resistance management, the integrated use of crop protection chemicals, biologicals, traits, and soil fertility and composition management are all part of an equation that can significantly increase a grower’s yield. Seed companies will need employees who will provide growers with expertise, or growers will get it elsewhere.
The Vision
Continued success in the seed industry will require dedicated study and aggressive exploration. Innovative action must be applied as companies retrain and retool—readying them to compete effectively and perform at ever-higher levels into the future.
Tray Thomas, founding partner, The Context Network
