AM VAC, AMERICAN VANGUARD AT 50.
AMVAC has grown substantially over the years, expanding its portfolio by acquiring tried and trusted brands and then repositioning those products in the marketplace through reinvention, product development, manufacturing, packaging and marketing. Today, AMVAC's agricultural portfolio includes products for corn, soybeans, potatoes, southern row crops and specialty crops with future plans to expand into precision agricultural technologies and biologicals.
"We've made a business out of acquiring branded products that are no longer on the A-list with these large corporations," says AMVAC CEO Eric Wintemute. "With crop protection companies focusing efforts on supporting newer chemistries, more mature products may not get as much attention and could be a distraction to sales and marketing teams. We are willing to pay value for these assets because even though they are no longer on the A-list, they are still important in niche markets."
Over the past few years, consolidation has been an industry trend in agriculture. AMVAC has profited by the continued stream of divestments, acquiring more than 30 products in three decades. Many of these products are category leaders like Bidrin insecticide, Folex cotton defoliant, Counter and Thimet insecticides, and VAPAM and K-PAM soil fumigants. AMVAC has also gained access to leading products through licensing-in like Impact herbicides for corn.
"Though some of our products may have generic competition, many of the products that we sell do not," said Wintemute. "Our company is unique because we manufacture the majority of our products here in the U.S. Also, we're not perceived as a threat to the large multi-national industry leaders."
One primary focus for AMVAC is to complete its market access model in the Americas and Australia. Recently, American Vanguard acquired Defensive/Agrovant Brazilian distribution company, focused on crop protection and micronutrients.
The Company also recently started subsidiaries in Australia and Canada. Two years ago, they acquired Grupo Agricenter and GreenPlants in the Latin American region, a well-established distributor of crop protection products in seven Central American and Caribbean countries.
"The philosophy of our business has always been focused on acquisitions," says AMVAC COO and Executive Vice President, Bob Trogele. "However, the change that has occurred in the last few years is that, aside from product acquisitions, we are also interested in company acquisitions that give us a structure and future platform to grow our business and product portfolio like OHP--a leading company in the nursery and greenhouse market that complements our AMVAC Environmental Products (AEP) in the non-crop area."
"As we have invested in product development, technology, formulation and regulatory expertise, we're designing our pre-mixes and unique, patented formulations which we want to expand both domestically and internationally. We acquired Envance Technologies and TyraTech, which has plant extract labs where we have a major commercial development effort with Procter & Gamble in the consumer arena under the umbrella brand Zevo.
Trogele reports, "We continue to invest in what we call our proximity innovation pipeline, and we also heavily invest in our university relationships and sponsored programs to gain access to and develop new product concepts."
Another primary area of focus is the future of precision application technology. AMVAC has invested heavily in SIMPAS, which stands for Smart Integrated Multi-Product Prescription Application System. Available in 2020, SIMPAS is a delivery system that will allow growers to prescriptively apply multiple products in one pass. The technology is designed to use both liquid and dry products simultaneously. Growers can apply fungicides, nematicides and micronutrients in furrow, at the same time, at varying rates, and to only those parts in the field needing them.
Application technology for AMVAC started in 2000, when AMVAC acquired SmartBox, a crop input closed delivery system. Starting with a corn insecticide, AMVAC grew the business adding more insecticides and nematicides to the mix. The application system is widely used by growers today.
"The idea for SIMPAS was born from watching our products being delivered through SmartBox," explains Wintemute. "We felt good about the ability to deliver these products safely and efficiently but wanted to advance our application technology by concentrating product and allowing the grower to apply multiple products prescriptively.
"Think of an ink jet cartridge where ink dispenses across a piece of paper accurately. SIMPAS will allow growers to apply multiple products only in areas where they need it."
Self-contained, closed-delivery SmartCartridge containers will use RFID tags to track product and rate information to continuously record the quantity of product dispensed and remaining in the container. This technology will also allow a grower to receive an auto-credit for unused product.
Though SIMPAS and SmartCartridge containers have been developed and patented by AMVAC, SmartCartridge technology will be broadly licensed to additional product manufacturers.
In addition to contributing to sustainable, modern agriculture, AMVAC is dedicated to creating value for its investors and employees. In the last seven years, the company has more than doubled from 280 to 650 employees attracting some of the industry's leading experts in agriculture.
Wintemute says the company goal is to grow the existing product portfolio by 5% and acquisitions by 10% each year. In addition, the company is also focused on the health and wellness of its employees, sponsoring wellness initiatives and offering shareholder benefits.
"Our goal is for our employees to lead healthy and prosperous lives," said Wintemute. "We are a family. Living a healthy life is the sustainability we need if our most valuable asset, our employees, are to continue to lead this effort for success and growth of the company. I think the future for us is very bright."
LIFELONG AG INDUSTRY COMMITMENT
Behind every successful company are the people who make it happen.
This theory holds true when taking a closer look at the leaders behind American Vanguard and its operating company, AMVAC. Chairman and CEO Eric Wintemute and COO and Executive Vice President Bob Trogele, PhD have both been in training for their current positions almost their entire lives.
In fact, Wintemute practically grew up with the company. At nine years old, he started sweeping and doing odd jobs for his father, who started the company that would eventually become American Vanguard decades later. His enthusiasm and vision for the industry led him to take over as the CEO in 1994 and later become just the second Chairman of the Company in its 50-year history.
"It's certainly a rarity for a public company, especially one on the New York Stock Exchange, to celebrate its 50th anniversary with only two chairmen in its history," Wintemute said. "I think it speaks well to the continuity we have. We have built the house one brick at a time on a solid foundation."
In his time with AMVAC, Wintemute has seen the company evolve. Fortunately, his lifelong involvement with the company has allowed him the foresight to navigate some significant seasons of change. For one, over the last five to seven years, American Vanguard has expanded its technology and shifted to look for better market access, which led them to company acquisitions rather than just product development.
"We've taken some risks along the way, while making sure that we didn't bite off more than we could chew," Wintemute reports.
There's been significant change with the American Vanguard team during that time period, too, growing from 280 employees to approximately 650 today. Between the company's desire to cultivate an environment for employee growth and creativity, and its dedication to create value for both its employees and investors, it's easy to see where the growth stems from.
"Sometimes, in a company with several thousand people, you're forced to have a structure that doesn't encourage creative, entrepreneurial effort," Wintemute says. "American Vanguard, however, gives people the chance to come into an organization and not only have the opportunity to do that, but also have ownership. Every employee has stock in our company, and everyone is a voting shareholder."
Moving forward, Wintemute says the company's goal is simple: balance. The team is focusing its efforts on expanding its product portfolio as well as international growth, while aiming for a balanced portfolio. The company has a lot to celebrate moving forward, too. This year, during the company's 50th anniversary, it expects to exceed $500 million in revenue, according to Wintemute.
PASSION FOR AG
AMVAC's COO and Executive Vice President Bob Trogele has a passion for agriculture that stems from his family connections. One of his grandfathers was a horticulturist and the other was a farmer. His interest began, and grew, at a young age during farm visits with his grandfather and cousins.
"He would show us how to grow different fruits and vegetables, how to harvest them, and how they would end up on our family table," Trogele said. "I also worked on traditional family farms, and I always liked the industry. I liked working together with people who came from a farm background or had an interest in farming. And now I've been in the agricultural industry for 34 years."
Trogele holds a PhD in strategy from the world famous Goetingen University, Germany. He is a Professor of International Business at the School of Economics and Law, Germany's largest business school, located in Berlin. Throughout his professional career, he has built an incredibly diverse, well-rounded resume. Leading both U.S. and international businesses and serving on a number of boards--CropLife America and Agricultural Retailers Association, for example--has given Trogele a broad perspective on what makes the Ag Industry tick.
Trogele also speaks three Languages--English, German and French--and, in an interesting twist, also played professional basketball. He thanks his sports career for providing him with team-building experience and helping develop his leadership approach, which includes creating vision, competitive strategies and high-performing teams.
Trogele credits AMVAC's continued success to a defined, focused strategy of technology differentiation and cost control.
"We have a strong sense of urgency, discipline and flexibility around acquisitions," he said. "We really understand who we are and where we fit. I think we have an excellent orientation towards the customer from an operational sense. Just a strong family and team spirit inside the Company."
In his role at AMVAC, Trogele's goal is to create value for investors and employees, as well as contribute to a sustainable, modern agriculture industry that helps farmers increase their overall efficiency while meeting the world's food, fuel and fiber needs.
"I feel like we have all the resources that we need to continue growing our company. We have a lot of opportunities, but we have to be very focused and selective as to how we prioritize them," he said. "We'd also like to continue growing and diversifying our technology. The future is bright for AMVAC."
We sat down with some of AMVAC's executive leaders to discuss business trends, future innovations and how AMVAC plays the agricultural arena.
Q: Why has AMVAC become involved with new application technologies?
Hendrix: AMVAC has a rich history of "at-plant" application technologies with our EZ Load System, Lock'N Load and SmartBox delivery systems. Our team recognized the need for more innovation in this area and accepted the challenge.
Led by our CEO Eric Wintemute, we began developing the next generation of application technology that would integrate into current and future precision ag platforms, changing the at-plant experience of our customers. It's our goal to deliver an at-plant application innovation that will enable solutions to be applied prescriptively at the Right Time, Right Place, with the Right Product at the Right Rate.
Q: How will AMVAC continue to support application technologies?
Hendrix: We have partnered with global technology providers and customers that see value in this technology segment. Each of our technology partners are vested in precision ag and are known for capturing value through innovation. These intersecting relationships will help provide multiple touchpoints that should optimize our customer's experience in this space. We are committed to develop and support innovative technologies that bring value to our customers.
Q: What differentiates AMVAC from other companies in its go-to-market strategies?
Hendrix: Agility and focus. Because of our size, we can be more responsive to customer needs while understanding the strategic deliverables expected by our stakeholders. Our company structure enables AMVAC to streamline our decision tree so that we capitalize on emerging markets in season.
Q: AMVAC recently launched a new brand identity. How does this play into the future growth strategy of AMVAC?
DeStefano: We developed a logo for the company that was more reflective of where AMVAC is today and where we're going, while maintaining some legacy connection to our history.
We are a pure play agricultural chemical company that is independent. We wanted our brand to be first-class and current. We also wanted to show that AMVAC is a great place to work. We're always looking for talented people. We wanted to show that AMVAC is a desirable company that our alliances can work with to be a market access partner and to develop their molecules.
We also rebranded the parent company American Vanguard (NYSE: AVD) so that all subsidiaries now have the tagline "An American Vanguard Company" as part of their logo to help increase awareness of the breadth of markets we serve through our nine operating companies.
Q: What are AMVAC's future plans for targeted portfolio growth?
DeStefano: We've implemented an organic growth process called the IRC--which stands for Innovation Review Committee. This is our process by which ideas that are customer-focused and solve specific problems farmers have come into our pipeline and are evaluated. We do this process quickly and have branded it "Innovation with Speed and Discipline."
It's a total cross-functional process, all departments are involved including marketing, sales, product development, regulatory, and formulations. This allows us to pick and choose which products we want to work on and align resources through sound project management to get it across the finish line.
We've coupled that with alliances from our business development team to access new molecules. We've also invested in strategic sourcing globally to access the chemistry we need to develop those solutions. We are developing new product concepts for soybeans and have premixes in the pipeline that we're going to be bringing to market in the near future to complement our robust corn portfolio.
We have also developed a biologicals strategy to have a presence in that growing segment and have several product concepts to fit our unique SIMPAS delivery system we are introducing in 2020 on a limited scale.
Q: How does marketing communications play into AMVAC's business strategy?
DeStefano: It's where the magic happens and products you've developed come to life and take on a personality. You have a formulation. The product is registered. You've priced it.
Now it's time to have fun and bring the product to life. Over the last two years, we've focused on creative positioning and breaking through the clutter. We've invested in an improved web presence, database marketing, and geo-targeting and relationship marketing. We've also just developed a social media presence, and we play heavy in digital, PR and marketing communications.
And we have hired great partners like Swanson Russell for our marketing communications, SIGMA Marketing for our database management platform and AgCall for our supplemental sales support.
Q: How is AMVAC positioned in the market?
Pougnier: AMVAC has a very unique position. We are selling older products, but many do not have generic competition. They are generally niche products that require significant regulatory investment, and we have been very good at growing those products.
Q: How important are mergers and acquisitions to AMVAC's growth?
Pougnier: Acquisitions are a cornerstone strategy for AMVAC. Over the last 30 years, we've made more than 30 acquisitions. A key differentiator is our willingness to invest in products that will need continued regulatory support and to find new uses for the acquired products. Also, we have a nimble team and an ability to make quick decisions during the acquisition process.
Q: How important is it for AMVAC to keep up with acquisitions and marketing efforts during this critical time in agriculture?
Pougnier: It is very important to continue to acquire products to expand our portfolio and grow our existing product portfolio through creative marketing. One of our main priorities as a business is to make viable proven solutions stay in the marketplace for a long period of time. This effort allows farmers to have access to various solutions that they otherwise would not have had.
by the Agri Marketing Editors
Caption: Scott Hendrix, Senior Vice President, U.S. Crop Sales, Canada and Application Technology
Caption: Neil DeStefano, Director, Portfolio and Marketing Communications Management
Caption: Jean Pougnier, Vice President of Business Development and Marketing