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Consolidation at the breeder level

Hi. For the past two years, we've seen significant acquisitions at the breeder level with Syngenta acquiring Fischer and Goldsmith and Ball acquiring Kieft Seeds and entering into an exclusive arrangement with Selecta for north America. Bodger exited the industry this year with Benary picking up the key seed lines and the botanicals division spinning out as a new business Green Fuse Botanicals. I have not heard any negative feedback at the grower level related to this trend. Are there winners and losers in this type of consolidation? What are the pros and cons? Is there a viable future for independent breeding companies? I'm interested in your thoughts. We also haven't seen a reduction in the number of broker companies on the plant side. Why do you think that is? We have seen consolidation among hardgoods distributors in our industry.

Tags: chain, consolidation, supply

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Permalink Reply by Lloyd Traven on August 18, 2009 at 12:43pm: Re: broker companies----we all have a broker rep we LOVE, someone who has been there for us and we reflexively give the business to FIRST. When they retire, that business will likely go to another brokerage, and THAT'S when the smaller brokerages will start to go away. Also, we have not used new technologies for ordering in this industry very much, so it is still harder for producers to sell widely totally on their own. As e-sales get easier, the broker will become less important. Many breeder houses also stipulate that ALL sales MUSt go through a broker---perpetuating their place in the chain.; ▶ Reply to This

Permalink Reply by Delilah Onofrey on August 18, 2009 at 1:08pm: Thanks, Lloyd. :)
Looking forward to future ranting seasons. :)
Hope you've had a nice summer.

Lloyd Traven said:
Re: broker companies----we all have a broker rep we LOVE, someone who has been there for us and we reflexively give the business to FIRST. When they retire, that business will likely go to another brokerage, and THAT'S when the smaller brokerages will start to go away. Also, we have not used new technologies for ordering in this industry very much, so it is still harder for producers to sell widely totally on their own. As e-sales get easier, the broker will become less important. Many breeder houses also stipulate that ALL sales MUSt go through a broker---perpetuating their place in the chain.; ▶ Reply to This

Permalink Reply by Rita Randolph on August 18, 2009 at 2:36pm

Gosh, so much has happened in the last year that's it's hard to keep it all strait. I feel like I need a pin-up board to look at so I know who and what went where!
I've seen a few plants I love disappear, but overall I think it's been a good move on the part of most companies. Like you - I've not heard a lot of grumbling.

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Permalink Reply by Delilah Onofrey on August 18, 2009 at 2:44pm: Thanks, Rita.
I think it's mostly competitors within breeding and distribution that are affected. I'm also wondering if any of the grower rooting stations have been affected negatively or not. Or positively.; ▶ Reply to This

Permalink Reply by Steve on October 7, 2009 at 11:16pm: Consolidation is never beneficial to growers. Big companies act like the bullies they are (because they can be) I am reminded of a time many years ago when our Ball rep. at the time paid us a visit to inform us that unless we did more business with them that they were not interested in our business anymore. And we haven't found a reason to ever deal with them again. Big companies move like the two ton Gorillas they are. Small companies will always find a way to compete. After all, we are all looking for new and improved plants. Until the big boys find a way to put a muzzle on mother nature. Small companies will still be around (until they are purchased by the big companies) LOL! Don't sell the Internet short. Newspapers made that mistake and then came craigslist. Now the biggest cash cow of the newspaper industry (the classifieds) is now free on craigslist and newspapers are trying to figure out how to get people to pay for the rest of the news. All it will take will be one breeder to get on board with e-commerce and the rest of the breeders will have no choice but to fall in line. Frankly I look at the Greenhouse industry's supply channel and it is way behind the times and is full of inefficiencies. For some reason our industry is insistent on doing things the way we have always done them. I guess it comes from being more concerned about the plants and less concerned about the business.; ▶ Reply to This

Permalink Reply by Eric Rohloff on October 24, 2009 at 11:40am: Ball and Selecta got engaged this past june. Terms of the prenup keep things at the root and sell the same for two years. I hope Ball doesn't run off with the assets leaving Selecta at the altar.; ▶ Reply to This

Permalink Reply by Delilah Onofrey on October 27, 2009 at 1:19pm: Thanks for sharing your insights and experiences, Steve. Sorry I am late to respond.

Steve said:
Consolidation is never beneficial to growers. Big companies act like the bullies they are (because they can be) I am reminded of a time many years ago when our Ball rep. at the time paid us a visit to inform us that unless we did more business with them that they were not interested in our business anymore. And we haven't found a reason to ever deal with them again. Big companies move like the two ton Gorillas they are. Small companies will always find a way to compete. After all, we are all looking for new and improved plants. Until the big boys find a way to put a muzzle on mother nature. Small companies will still be around (until they are purchased by the big companies) LOL! Don't sell the Internet short. Newspapers made that mistake and then came craigslist. Now the biggest cash cow of the newspaper industry (the classifieds) is now free on craigslist and newspapers are trying to figure out how to get people to pay for the rest of the news. All it will take will be one breeder to get on board with e-commerce and the rest of the breeders will have no choice but to fall in line. Frankly I look at the Greenhouse industry's supply channel and it is way behind the times and is full of inefficiencies. For some reason our industry is insistent on doing things the way we have always done them. I guess it comes from being more concerned about the plants and less concerned about the business.; ▶ Reply to This

Permalink Reply by Delilah Onofrey on October 27, 2009 at 1:20pm: I agree that it will be interesting to see what year three is like with this arrangement.

Eric Rohloff said:
Ball and Selecta got engaged this past june. Terms of the prenup keep things at the root and sell the same for two years. I hope Ball doesn't run off with the assets leaving Selecta at the altar.; ▶ Reply to This