Distribution: A Tough Nut to Crack
It wasn’t so long ago that you could sum up how the distribution chain felt about biologicals in a word: distrust.
Long tainted by being behind the times, the channel was slow with uptake, uncertain how to make them understood to the grower, and often, simply out of product.
Now, driven by tougher regulatory standards and demand for more active ingredients on the back of pest resistance and various bans on synthetics, biologicals are beating nearly every other category in ag with a 17% compounded annual growth rate.
It’s said that a rising tide raises all ships, and retailers and distributors acclimating to the increasingly sophisticated biologicals market are no exception.
“If you want to compete in biorationals, you’d better bring your A-game. You’d better have products that work and products that are available, and that are consistent,” Rick Melnick, Valent BioSciences’ global marketing and brand manager, tells FCI. “When you have Bayer and BASF and Syngenta getting in the game, they aren’t getting in just for fun,” he adds. “Growers are gaining confidence in these products, which creates more opportunity in the market, and more R&D dollars with the multinationals are being brought to bear in the biorational space.”
Yet the challenges were – and remain – real, says Melnick. They are living organisms, after all, and they take different handling.
“Distribution is still the toughest nut to crack for small biopesticide companies,” says Pam Marrone, CEO and founder of Marrone Bio Innovations. Such small companies, including Marrone’s, simply do not have the large volumes of chemicals to bundle with biologicals, and without a full product line, getting their attention is difficult.
For that reason, her company is focusing on offering products across all categories, including insecticides, fungicides, nematicides, and herbicides. “That said, what we continue to hear that the key in getting biologicals adopted is to educate, educate, educate.”
The best scenario, she says, is when a biopesticide company can partner with distribution for demand creation at the grower level. Offering detailed use instructions and modes of action information is a must.
For Bill Duan, general manager of overseas business for Beijing-based Leili, a top seaweed fertilizer manufacturer, agrees that one of the biggest obstacles is education. In terms of regulation, biostimulants are treated like fertilizer, but the low usage rate more closely mirrors agrochemicals.
“Fertilizer doesn’t need a demonstration. Everyone knows how to use it,” Duan says. It’s just the opposite for biostimulants. “It’s a big challenge. We use the same method on the same crops in this country, but that method in another country might not be effective because of the different conditions.” Duan says extensive farmer education is needed so biostimulants are promoted more similarly to the agrochemical method.
Dr. Lerzan Erkilic, who co-founded the Turkish firm Biyolojik Tarim in 2004 to develop Cryptolaemus montrouzieri and Leptomastix dactylopii for mealybug control (namely Planococcus citri) in citrus, pomegranate and other crops, says comprehensive education of tradespeople in Turkey is a prime concern.
“Growers’ decisions on any activity on their crop is led by tradespeople, especially plant protection activities. If they insist on clean yields with no residues, biological control is an easy choice for growers.”
Upping Their Game
Ramon Georgis, director of international business with Brandt – which he calls the top U.S. player in terms of variety of biopesticide offerings – says distributors have become increasingly attuned to biopesticide companies’ products that have grown leaps and bounds in quality, consistency, and formulation ease and application.
“All of it makes sense for distributors to promote reliable (biological) product along with (synthetic pesticides),” Georgis says.
To show how far the sector has come, Georgis recalled start-ups that were active in the early ’80s, when U.S. EPA was just beginning to pressure chemical pesticide companies to develop safer chemistries and ask for more data to maintain product registrations. There was Biosys, which developed nematodes for insect control; Mycotec, which developed fungi for insect control; and Ecogen and Mycogen – which both worked with transgenic Bt for insect control.
All were unable to deliver on the vastly overstated sales volume potential of biologicals they touted to their financial backers. Their assumption that the products could – and would – replace chemical pesticides entirely, of course, was proven wrong.
Since the multinationals entered the space and campaigned for using biologicals alongside chemicals, confidence and trust from the distribution channel has jumped dramatically. “It is a natural evolution,” Georgis says.
In addition to the United States, Chile, Brazil, Colombia, Mexico, Spain, Italy, Morocco, and Australia are highly advanced in promoting biopesticide IPM programs, while countries such as China, Thailand, and Indonesia are not far behind, Georgis says. “All of these countries that export to the U.S. and Europe need to have almost undetectable residue on crops.”
Bang for Your Buck
Distributors have upped their games, but ongoing education is critical if distributors hope to continue feeding demand, says Warren Shafer, vice president, global R&D and regulatory affairs with Valent BioSciences.
“To me, the education process is constant; you can’t let up,” he says. As new technologies and formulations with greater stability, ease of use, or other attributes are brought forth, distributors use that to differentiate themselves, he says.
But advertising alone is not enough.
“We need to educate along the way to underscore the use of biorationals in tandem with a particular chemistry, and looking at things from a total solutions standpoint,” he says.
What the right route is for education – and how you can find the best bang for your buck – are up for debate.
According to Marrone, the thirst for comprehensive knowledge and understanding about biologicals in general and specific biological products is very high.
There might not be a single answer on the most profitable tack, but a two-pronged approach is necessary, she says. The manufacturer educates the distributor who interfaces with their growers, by providing the channel partner’s agronomists with detailed technical information. At the same time, the manufacturer conducts direct-to-grower education through field days, one-on-ones, and on-farm demos.
Mark Trimmer, of biopesticide consultancy DunhamTrimmer, says the most reliable way is to have the education process completely managed by the main stakeholder, the manufacturer, “who should know more than anyone else about the product. If dollars are short, then it has to be the pyramid process of the manufacturer educating the field team and the retailer/distributor field team educating the end-user,” he says.
In addition, Marrone Bio Innovations was the first to offer a biopesticide webinar and an online continuing education unit (CEU) course to pest control advisers, private applicators, certified crop advisers and other license holders. She says both were found to be good tools.
“When launching a new formulation, the customers – both growers and channel agronomists – want to know why it works differently,” Marrone stresses. “What exactly did you do to give it a different or better functionality? Explaining the hard science behind the products is key.”