A group of western Canadian independent crop input retailers want Sept. 8 to be remembered as Independents’ Day.
That is when Grow Community of Independents was launched as an umbrella group to make its member companies more competitive with the “big boys” in the crop input business.
The seven businesspeople formed Grow partially in response to mounting pressure from grain companies and fertilizer manufacturers that have been snapping up their fellow independents.
They believe by working together they will be better equipped to compete for their share of the $4 billion annual western Canadian crop input market.
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The companies will remain independent businesses but will work together on certain initiatives such as bulk buying, joint staff training and developing exclusive products marketed under the Grow brand name.
The group has approached more than 30 suppliers, including chemical, fertilizer, seed and precision farming companies as well as financial institutions. It says the reaction from suppliers has been positive.
“This is an organization that believes it will compete against the big companies in every market in Western Canada,” said Grow president Kevin Blair.
Murray Fulton, an agricultural economist with the Johnson-Shoyama Graduate School of Public Policy at the University of Saskatchewan, is not surprised to see independents unite.
“I’m sure they’re feeling the pressure from the consolidation that has been going on in that sector, and I’m sure they are feeling it in a fairly major way,” he said.
“They need some joint buying clout. They need a joint brand.”
Blair said the seven members of Grow’s board of directors are like-minded individuals who recognized when they first met 16 months ago that they shared the same objectives for the new company.
Fulton said that is often the case in the early days of such joint ventures, but over time fissures can develop as the individual companies grow at different rates and new firms are added to the fold.
The founding companies include Alberta’s Andrukow Group Solutions Inc., Saskatchewan’s Blair’s, G-Mac’s Ag Team, North Star Fertilizer and Wendland Ag Services and Manitoba’s Double Diamond Farm Supply and Shur-Gro Farm Services/Munro Farm Supplies.
During the Sept. 8 launch in Saskatoon, Grow announced it had added four new partners:
• Cavalier Agrow;
• Weyburn Inland Terminal;
• GJChemicalCo.;
• Parkland Fertilizers.
The company represents 72 retail outlets in Western Canada.
Fulton thinks Grow’s strategic advantage lies in providing superior customer service. The group has buying clout but nothing like the big players, so it will be tough to distinguish Grow as the lowest cost provider of inputs.
He said the group could face challenges when making sure new partners get a say in Grow’s governance and in finding ways to continue fostering innovation.
If the venture is a success, there will be a temptation to do more joint initiatives such as developing common billing or inventory tracking systems, but Fulton said that means less autonomy for the individual companies.
