Apr. 25, 2019
By Leonardo Gottems, reporter for AgroPages
There will soon be major changes in the business strategies of Brazilian companies producing agrochemicals, seeds and distribution channels. This is the main conclusion of a preliminary survey conducted by Spark Strategic Intelligence, which investigated what are the main influencers in purchasing decisions among those in the Brazilian market, in a scenario modified by the mergers of companies and sales of assets.
"Preliminary results indicate that on the part of companies, there should be more investments in the building of strong brands, because the consolidation of the product portfolios presents fewer imbalances in supply among the main companies in the sector. This applies to almost every product category," said André Dias, managing director of Spark.
"The similarity of portfolios will certainly lead to daring and representative investments by these companies, even in the redefinition of market access strategies. There is a strong tendency in reductions in the loyalty indexes of farmers to distributors. In this segment, equally, whoever differentiates will win the game,” adds Dias.
Another important trend detected in the research pilot concerns the role of so-called planning offices. Initial figures emphasize that these regional companies, generally run by academics, agronomists and scientific researchers, continue to exert a strong influence on agrochemical and seed procurement decisions, thanks to the reputation of leadership enjoyed by the managers of these enterprises.
Spark's preliminary analysis found that in the four regions covered by the study, adherence to planning consultancies presents significant indices, ranging from 23% to 45% of the total sample. Among those producers who told Spark to hire planning companies in the harvest, 91% stated that they assisted them in purchasing agrochemical decisions, while 84% said the same in relation to seeds.
Other supporting data provides evidence on the strength of the relationship between producers and consultants: 67% of producers reported maintaining durable contracts with planning offices, lasting last five to ten years, while 65% attributed scores of 9 and 10 to quality technical consultants.
The data revealed this week is from a pilot phase of the project, which brought together 800 interviews with soy producers. The complete survey will be unpublished, and is being carried out with the participation of 7.2 thousand producers having different land profiles, covering the cotton, coffee, corn and soybean crops, in the main agricultural regions of the country.
According to Dias, the study will show, for example, which agribusiness professionals are the most influential on agrochemical and seed purchasing decisions by the producer, besides the main services provided to the farmer during the harvest by the influencers.
Dias adds that the research will also evaluate the quality of the producer's relationship with local and regional technical consultants, and how this link impacts on the positioning and use of agrochemicals and seeds. It will also map, in depth, according to the view of the producers, the effectiveness of the specialized media in the agribusiness and the work of the agricultural research institutes.
"With this information, segmented by region, it will be possible to identify more assertive marketing initiatives for each type of region and farmer profile," said Dias. According to the partner of Spark, the new survey will be released in four stages between the months of May and September.