CropLife: Crop protection products losing market share in ag retail

By CnAgri Print On many levels, 2012 was a great year for the crop protection products category for CropLife 100 retailers. Overall, the sector saw its sales figure increase almost 10%, from $7.1 billion in 2011 to $7.9 billion in 2012. Furthermore, the category lead in terms of overall growth among CropLife 100 retailers, with 90% of survey respondents writing that their crop protection products revenues increased from 1% to 5% for the year (which was tops among the nine sub-categories tracked in the CropLife 100 survey).

Yet, it wasn’t enough in the long run. Continuing a challenging trend that has plagued the crop protection products category for much of the 21st century, this rate of growth paled in comparison with some of the other three categories (fertilizer, seed and custom application), so the sector lost more market share of the overall CropLife 100 revenue pie. As of 2012, the crop protection products category holds a 28% market share among all inputs/services, it’s lowest mark ever and 43% lower than the near 50% share it held at the start of the 2000s.

No fun for fungicides

The past few years, one continuous bright spot for the crop protection products category has been the fungicides segment. According to most CropLife 100 respondents in the 2011 survey, 86% of their grower-customers were applying fungicides to their crop fields as a preventive against disease. This was helped along undoubtedly in 2011 by the particular wet spring and early summer conditions that affected much of the Midwest.

But in 2012, however, excess moisture was definitely not a problem. For much of the late spring and summer months, better than half the nation was griped with a severe drought. According to the majority of CropLife 100 retailers — 94% to be exact — this drought ultimately had no or little impact on their overall retail businesses. However, a closer look at some of the numbers for fungicides tells a slightly different story.

When asked to say if their fungicide sales were up, flat or down for the year, 81% of CropLife 100 retailers reported sales increases for fungicides in the 1% to 5% range on the 2011 survey. In the 2012 survey, however, this percentage took a significant hit, with only 52% of respondents seeing this kind of revenue bump. Instead, 39% of those surveyed in 2012 said their fungicide segment sales were down 1% to 5% during the year.

"We definitely saw reduced plant health fungicide business this year,” wrote Jim Loar, senior vice president, sales and marketing for Wilbur-Ellis Co., San Francisco, CA, on his CropLife 100 form.

And this was borne out in the numbers. When asked what percentage of their grower-customers applied fungicide for preventive measures in 2012, respondents reported that this number had dropped to 78%.

Fewer generics

Then there were post-patent products. Not too many years ago, many crop protection product category watchers predicted that generic products would ultimately follow a similar growth curve to the one they experienced in the European Union, where one in three products sold fit into this segment. And it seemed as if this prediction was panning out for a little while during the early 2000s as post-patent products were sold by more than 30% of CropLife 100 retailers.

But since the 2010s, post-patent product fortunes have waned. In the 2010 CropLife 100 survey, only 24% of ag retailers reported that they sold generic products in their outlets. In 2011, this figure had dropped to 21%. Would the segment rebound in 2012, some wondered, or would the market share slide continue?

Well, the numbers are in — and they are down again. In the 2012 CropLife 100 survey, only 19% of ag retailers said they still sell post-patent products to their grower-customers.

According to many of those surveyed, grower-customers seem to trust mainstream brands to perform better for them. “I still carry some generics for a few of my customers, but most of them like getting a main name brand because they trust it more,” wrote one CropLife 100 survey respondent.