Sunrise Cooperative has become something of a destination. Cooperatives from around the country have asked to come see how the Ohio retailer built Progressive Crop Technology (PCT), its proprietary line of crop protection, nutrition, adjuvants, biologicals and seed treatments encompassing 83 SKUs across seven brand buckets.
“My quick answer is: what we’re doing is not easy. And it’s not for everybody. We have a whole team in place to do this PCT brand. And it’s not the easy road — when you’re getting questioned, when you’re faced with generics. But for us, it’s the right road,” says Miller, vice president of agronomy.
In 2016, sales of PCT products were $3 million. Today, it’s over $43 million. PCT was founded in 2003, came into Sunrise through the 2016 merger with Trupointe, and has grown roughly fourteen-fold since.
So what leads an ag retailer to invest significant time and resources toward offering a private label brand? It’s the confluence of active ingredients coming off patent, margin being squeezed, and the market demands to differentiate product offerings.
Retail businesses are larger scale than ever before, and the factors mentioned above apply to retailers of every scale. While Sunrise represents a regional farmer-cooperative, this trend is also clearly illustrated by the country’s largest ag retailer Nutrien Ag Solutions.
Nutrien has spent over $500 million in the past twelve years on crop nutrition and biostimulants and built a research bench to match. Nathan Packer, SVP, North American Retail for Nutrien Ag Solutions, says the focus has been on biostimulants and the company’s proprietary brands, Loveland Products and Dyna-Gro Seed. Internal R&D combined with extensive local testing helps bring new technologies to market faster while ensuring performance in real-world conditions.
“We have over 40 PhD research scientists on staff, and they’re evaluating these products and coming up with new formulations in-house. Today, our Loveland Products portfolio consists of around 400 products globally,” Packer says. “For us, it’s not a proprietary versus basic product. It’s innovation-led solutions that give customers the best option for their acre.”
“The proprietary business is really important for us and will continue to be important,” Packer says. “At the end of the day, it’s about delivering differentiated products to customers and fulfilling their need.”
Category by Category
Nutrien’s proprietary portfolio offers customers a lineup of crop nutrition, specialty nutritionals, adjuvants, and seed technologies. In total, for Nutrien its proprietary products represent approximately 24% of the company’s portfolio and generate about $1.1 billion in gross margin.
Across ag retail, proprietary product lines range from crop nutrition, crop protection, adjuvants, biologicals and more. Retailers say the key is to bring something differentiated and with specific benefits to customers. The brand grows as the product range grows.
“You look at starters, they are table stakes. They are foundational type products where a biological or biostimulant can be added to address the customer’s needs,” says Jeff Corraini, PCT sales and marketing lead.
Corraini says seed treatments, biostimulants and adjuvants are the strongest performers for Sunrise.
Two years ago, River Valley Co-op, headquartered in Iowa launched their own brand. They’ve built a line of adjuvants and crop nutrition products first.
“YieldVance is our overarching brand name. And then we have AdjuVance, which is the lineup of adjuvants that help all the crop protection products work better. And then we also have GrowVance, which is our nutritional lineup of liquid and dry products that can be applied to help enhance yields,” explains Dustin Hoeft, agronomy business manager at River Valley Co-op.
Nutrien points to similar categories for growth—crop nutrition and biologicals.
“I would say for us, it’s on the nutritional front, because of the value we’re able to bring for nutrient use efficiency and protecting yield potential. From a biological standpoint, that technology remains a primary focus for us, and an area that’s been growing rapidly across the industry,” Packer says.
How Much Better, and Who Will Say
Sunrise views the benefits of its private label through a farmer-owned cooperative lens and providing slightly higher patronage benefit on PCT because the margin opportunity is higher, which the leaders say is foundation to helping the customer win.
“Margin range varies. But, as a cooperative, we pay patronage — and our PCT product line returns the highest patronage to our growers every year. And that’s been consistent for what will soon be 10 years,” Miller says.
River Valley’s Pete George, Illinois regional agronomy manager, lays out the test his co-op applies before a product earns the label.
“We really look at it in threefold. Can we be competitive and provide the grower a return on investment? Does it work operationally? We have to make sure that our operation team succeeds. And then also, from a cooperative, can we return a profit on that as well?” George says.
Wesley Davis of Meridian Ag Advisers puts a range on the category.
“When you look at a white label or private label product, a lot of those products can end up having a margin of 1.5 to 2x a typical margin of a product. And what that ends up meaning for retail is part of that value they capture and generate higher profits, but they also are able to sell products to farmers more cheaply.”
Corraini says the multiplier doesn’t license a retailer to price however it likes.
“Price alone won’t carry a label into the field. The product must fulfill a need, handle well and be priced appropriately,” he says.
Nutrien says its proprietary business is an important asset in how they go-to-market, which also includes their Nutrien Financial offerings.
“Nutrien Financial is a very important piece of our customers’ success today. We work with many of our supplier partners, including Loveland Products and Dyna-Gro Seed, to provide competitive financing offers that can help growers manage input purchases. In some cases, growers who choose Loveland Products may also have access to those same competitive financing rates on other participating products. And overall, we’re offering very competitive interest rates in the market,” he says.
The Burden of Proof
Putting your own name on the jug means owning the burden of proof. A national brand arrives with a trial book behind it; a retailer’s private label arrives with whatever the retailer can show. At Sunrise Cooperative, that gap is the argument for running its own plots.
“How many times do you see it where a company comes out with a product and says, ‘Yeah, well, out in the Dakotas and the I-states it did this.’ Well, we’re in Ohio. So to be able to have local data is huge,” says Corraini at Sunrise Cooperative.
That regional evidence isn’t just diligence, it’s also an edge in going to market to show farmers the performance tailored for them.
The co-op runs 13 plot sites across Ohio under research lead Bryan Reeb, and products are screened before they ever carry the PCT label and tracked after launch to confirm they perform as promised — typically a three-year cycle before Sunrise considers the results consistent enough to stand behind.
Newer programs lean on the same principle with less history behind them. At River Valley Co-op, soil and tissue testing sets the baseline that the private label is built to correct.
“A lot of our testing shows that we’re short in some of the micronutrients, so we use that as a baseline and then we try to supplement it with these YieldVance and GrowVance products to attain higher yields,” says Aaron Trenkamp, agronomy account manager at River Valley Co-op.
In season, the co-op’s own diagnostics point back at the co-op’s own products.
“We’re using technology in the summer with the NutriScan tool to see where our plant is in real time so that we can make adjustments, which then wraps back around to our GrowVance product line to make in-season applications of a zinc, a boron, any other micronutrients or products that we may be lacking in the field at the time,” Trenkamp says.
The margin moves, and so does the work.
