The Sauce Paradox, The Funnel of Specificity and Dominant Logic: Bringing to Life the Cultural Challenge of Biologicals vs. Traditional Crop Protection
I have often highlighted some of the cultural and core competency challenges of crop protection companies shifting towards the selling of products like biostimulants, most recently last week:
If we think about what the core competency of the farmer facing staff of Corteva is, we quickly identify it is understanding pests and how to kill them (disease, insects, weeds) with synthetic products. This skill set and product focus is, on a relative basis, simple to illustrate and communicate to a farmer. See a weed, spray to kill the weed, see the weed die/disappear. Same with insects.
The competency necessary to effectively sell biostimulants and biofertilizers is actually very different. For example, biostimulants increasing “nutrient use efficiency” is less tangible to illustrate and communicate plus requires an understanding of soil fertility and complex soil interactions to position and understand where it will work best. Same with biofertilizers, for example, to effectively position their Utrisha product there is a need to understand crop yield potential, residual nitrogen levels, protein premiums (in wheat) and much more. Without that understanding, the product expectations are unlikely to be communicated effectively and the outcomes have a higher chance of being suboptimal, both resulting in poor customer experience and ROI.
I had a few questions on examples of it. While it is always challenging to illustrate without an inside perspective I think it is possible to anecdotally bring this to life a bit.
I am going to highlight UPL Canada and their Ohm product, which is the common seaweed based biostimulant, Ascophyllum nodosum. Specifically highlighting their market positioning and extrapolating that out.
Like I talked about in the above quote, “nutrient use efficiency” is not very tangible. Yet here is how UPL positions Ohm on their website and every single piece of marketing material I found:
OHM™ Biostimulant is a highly advanced, highly concentrated form of Ascophyllum nodosum seaweed extract that optimizes nutrient use efficiency for enhanced plant development and higher yield potential in cereals, pulses, pome fruit, stone fruit, berries and other crops. OHM has been globally researched and proven to optimize plant nutrient utilization efficiency. This provides enhanced plant development including larger root length and larger leaf size which ultimately leads to higher yield potential. OHM Biostimulant provides a pure formulation that is a key component of improving the nutrient uptake and use at key physiological stages of plant development.
It’s short on “so what” implications and tangible data anywhere in their material.
If you talk to most crop protection companies today, they know what diseases, insects and weeds “trigger” farmers and agronomists, so they position the product accordingly based on the product strengths - whether on their website, or equipping their staff to talk at depth about these problems or any other marketing collateral. This allows them to own a specific area of the market with their product and even price the product accordingly.
We see this on almost every crop protection companies websites and marketing messaging, and even on UPL’s site when it comes to their core competency products, like herbicides. Take their Everest 3.0 product:
EVEREST® 3.0 AG is an advanced flucarbazone-sodium formulation with new carrier technology adding greater stability of the active ingredients for unsurpassed ease of use. This advanced formulation delivers superior control of wild oats and green foxtail and other hard-to-kill weeds such as Japanese brome.
They then go on to talk about flushing control, a notable point of resonation with farmers with wild oats and one of the differentiators of that product in key market areas. They do an excellent job positioning and owning a specific spot in the market with that product, because they understand that area of the industry.
In crop input marketing there is a funnel of specificity based on understanding the problem and the market, illustrated here:
From left to right, products tend to get more zero’d in on the problem they solve in the category they fall into. We see this consistently in herbicides, fungicides and insecticides across all crop protection manufacturers, whether talking to their staff or reading their marketing materials or even how they talk internally.
If we stay zoned in on the biostimulant rows and think back to the UPL quoted paragraph on Ohm, we can see UPL stops at the first column: stress managed.
They only talk about nutrient efficiency and stress reduction/plant development which lack specificity and therefore likely struggle to resonate with a farmer. Even if they are seeing some moderate success with the product in the market, it’s surely short of where it could be and will hinder more mainstream adoption, especially once competition increases.
I would venture a guess that it’s because they haven’t taken the time to understand specifically how and where their product performs best and what abiotic stresses specifically resonate with farmers and which are most detrimental to yield. This is a missed opportunity.
UPL has had the Ohm product on the market for two years now with the chance to plant their flag in specific areas, owning that spot in the customers mind.
This is especially pertinent in Canada today with Ohm. A notable, continuously proven function of ascophyllum nodosum is nitrogen use efficiency, something that trials could have been targeted at before commercial launch and since. Nitrogen is the biggest single input expense of farmers and a nutrient that is top of mind given the Canadian governments desire to reduce emissions of nitrogen by 30%. Being known as the “nitrogen efficiency product” begins to be a really valuable starting point and place to own in the markets mind. (Note: Just using nitrogen use efficiency as an easy example specific to this product, they may have a bigger strategy surrounding co-formulated initiatives to align with their ProNutiva business in the works that make it better to position on phosphorous efficiency, or heat blast or cold early season temperatures that may align better with the macro strategy of the product, regardless a more focused approach is almost always better as I discuss below).
A company would get hammered in the market if they launched a herbicide and said “good on weeds” because it tells the market nothing. That’s the equivalent of what the Ohm positioning is today.
The Sauce Paradox
With biostimulant products there tends to be what I call the sauce paradox.
For companies, biostimulants are tempting to take the Franks Red Hot Sauce approach:
“I put that shit on everything”
It’s tempting to say biostimulants do everything, on every crop and in every situation because when you augment plant physiology so broadly, there is a desire to emphasize everything it does or stay high level like with Ohm to allow for optionality. But that’s part of what has troubled biostimulant perception in the market. When you try to be everything to everyone, you accomplish being nothing to anyone.
Instead in biostimulants, it’s better to take the BBQ sauce approach. BBQ sauce is intended for a very specific use, cooking and marinating meat. The sauce is intended for those very specific use cases and even has formulation considerations for the specific use (eg: being used in high heat scenario’s or on specific types of meats).
Biostimulants should be thought of as BBQ sauce and not Frank’s Red Hot Sauce.
Identify and own a specific place in the customers mind that no one is talking about or that you are disproportionately positioned to execute on with your product and team. Today, we do not see abiotic stressed for example being specifically positioned as “pests”, but that mentality can be cultivated in the industries mind specifically around some of the big abiotic stresses.
I have worked on this problem with numerous clients before. In fact, we can even see biostimulant companies in the market today taking this focused approach, like Stoller and their X-cyte product who’s core competency is nutrition and biologicals, reinforcing that when you understand your corner of the market, you can better position and deliver value into that corner of the market.
You might be saying, “Shane, they can easily adjust this”.
Sure, some individuals in the organization can and will learn it and adjust, but culturally there begins to be an entirely new area to understand and focus on from a market perspective and customer perspective and even goes down to how to operate trials which diverges from the traditional core competency and way of doing things (eg: What is being observed and tested for in trials of herbicides is very different than biostimulants and then the mindset that “we start with seed treatment, then move to herbicide etc…where do biostimulants seamlessly fit in?” as a couple basic examples).
In Why is Digital so Hard for Industrials?, an article I was recently sent by my colleague Sachi Desai, there is an emphasis on dominant logic in organizations and while the article is focused on the cultural shift from the physical to the digital world, I think it illustrates as well moving from the tangible to the intangible in crop protection to biostimulants:
In order to talk about nitrogen efficiency for example, marketers and sales reps need to be able to understand and talk to the dynamics of fertilization, such as pounds of nitrogen necessary per bushel of grain produced, soil organic matter considerations, situations where N availability declines, timing considerations and need to illustrate that their product is better than simply “applying more N” (plus many more considerations) to have an informed positioning and value added conversation about how to derive the best outcome from the product.
This shifts time and resources from core products, like herbicides or fungicides. This is only considering the nitrogen dynamic, if you want to talk about other nutrient efficiency, like phosphorous or micronutrients, that’s another area or if a company opts to focus on heat blast, they need to understand the physiological dynamics that drive the stress in the crop and how frequently that occurs, what the impact is and what the alternatives in the market are.
We can see where this gets to strain the crop protection company if they simply approach it like the addition of another herbicide or fungicide product to the portfolio.
Some might even be saying at this point, “Shane, this is why companies acquire expertise”. In the case of UPL, they acquired Arysta LifeScience, a strong biostimulant company when they were a stand alone organization.
However, the dominant logic within the acquiring organization (UPL) stems from the core competency in crop protection. It takes pointed effort to ensure that dominant logic does not over power the incoming expertise.
If we take it up another level as to where some of the challenges surrounding biostimulants, most crop protection companies have actively sold against biostimulants for the past number of decades for two main reasons (in no particular order):
They haven’t wanted other companies to take farmer budget away as there are always other areas of their business they could still see usage grow (eg: those dollars could be allocated to seed treatment or higher value fungicide products).
They have also actively tried to keep biologicals out of the spray tank, pounding the message into staff and the zeitgeist of their organizations that nutrients and biostimulants in the spray tank can hinder their crop protection products performance (to be fair, in some instances this can be the case and there is always onus on some of the biostimulant companies to proactively do the registration work to instill confidence in the crop protection manufacturer).
The dominant logic runs deep.
In order for crop protection companies to overcome this, in my view, there is going to need to be extensive leadership shifts to change that dominant logic (aka the perception) through expanding the expectations of individuals, along with the expansion of expertise (from external sources) and team along with identifying specifically where products and knowledge are synergistic to their current business and portfolio. This may seem obvious, but even in the UPL grower program, there is not some of the natural ties one would expect with a biostimulant product that aren’t done (again, in UPL defense, this could be by design…I don’t have internal knowledge this is just an outside interpretation).
Many input companies from UPL to Syngenta have put biological personnel in place, typically at the global level, but it hasn’t necessarily permeated to every localized region at this point, something I do expect to see shift in the next few years.
I think this will continue to be an area where crop protection manufacturers will identify some novel partnerships (such as what Corteva did with Symborg initially or Syngenta is doing with Azotic in Canada) to augment their traction in the market place and hopefully accrue additional market understanding to be able to even more effectively deploy biologicals in the market place.