Growth of the agricultural inputs sector opens up opportunities for professionalization and investment in marketing

At a time with so many economic and social difficulties in Brazil, strongly related to the coronavirus pandemic, it may seem unusual to think about investment, review of strategic positioning and marketing for companies. However, for the agricultural sector perhaps this is the best time in recent history to make changes and chart new directions for organizations.

The agribusiness sector has been observing the crisis from a safe distance. The Brazilian agricultural GDP increased by 24,2% in 2020, when compared to 2019. With this result and the weaker performance of other sectors, the Brazilian Agro GDP reached the expressive mark of 26,6% share in the GDP national. The country's main crop, soybeans, saw a 130% increase in prices from January 2019 to April 2021, according to data from CEPEA. This increase in prices was also driven by the exchange rate devaluation, but even considering prices in dollars, the reported increase was still 55%, reinforcing that the gains for producers are significant.

For 2021, the scenario remains strongly optimistic and with a forecast of growth of 19,3% in Gross Production Value when compared to 2020, with soybeans signaling an increase of 33,6%, according to data recently released by the CNA (Confederation of Agriculture and Livestock of Brazil).

One of the most important agricultural inputs, with soy as its consumption leader, NPK fertilizers were positively impacted and showed an expansion of 11,9% in deliveries in 2020, when compared to 2019, according to recent data from the Sector Survey of ANDA, the National Association for the Diffusion of Fertilizers. And there are already important indications of a good pace in the NPK sector for the year 2021. According to MacroSector, a consultancy specialized in the agricultural market and NPK fertilizers, it is estimated that domestic sales will increase 6% in 2021, reaching a new record of 43 million tons sold.

Still within the Plant Nutrition group, another segment that confirmed growth was Special Fertilizers. According to data from ABISOLO's 2020 Yearbook, Foliar Fertilizers grew 12,8% per year from 2014 to 2019 in Brazil, a significant growth higher than that observed in other agricultural inputs in the country.

For 2020, entrepreneurs from important Foliar Fertilizer companies report a strong expectation of growth in the segment, which could surpass that observed in 2018, when growth exceeded 19% in relation to 2017. With soybeans making up 49,6% of foliar fertilizer sales In Brazil, the momentum is evident and everything indicates that it will also be sustainable for 2021.

Marketing specialist and former executive of large companies in the segment, Anderson Nora Ribeiro, understands that: “Brazil has become the great global center of tropical agriculture and in this context, research, development and innovation have stood out in recent decades . The Specialties sector is one of the most dynamic and influential in terms of launching technologies and creating companies, in addition to including products with more sustainable attributes, something that has also been in greater demand in the agricultural market”. Ribeiro also highlights that the majority of companies in the sector are small and medium-sized and begin activities with a very lean structure, focused on sales and industry-logistics, but with growth and improved results, the need for investment in a clearer strategic positioning and in marketing, it becomes a priority so that they can overcome the initial revenue plateau.

Understanding that the time is now to invest in marketing to grow, after several years leading the Marketing of important Specialty Fertilizer companies and also being part of the ABISOLO team of advisors, Anderson and fellow agronomist and Marketing specialist, Marco Antônio Raymundo, came together to found 5P2R Precision Marketing, a company that aims to accelerate the development of medium and small companies, focusing on the use of planning and management tools that are very common and accessible to large multinationals, but which are still little adopted by companies smaller size.

According to Raymundo, there is a large gap in internal organization and use of management tools among companies in the input sector, as smaller and younger companies are unable to “pay” for the same level of information, knowledge and systems that are widely used by larger companies. . “Our idea is to use this knowledge acquired in large multinationals, adapt and simplify, to enable good practices and effective management tools to be used by companies with leaner structures in the agricultural sector”, adds the specialist.

The excellent moment of Brazilian agribusiness, its greater attractiveness to professionals from other sectors and higher profit margins for differentiated input companies, open a unique window of opportunity for them to more clearly define their purpose, their product portfolio and management of the customer portfolio, and draw up a clear plan for future development. The Brazilian agricultural sector is highly competitive and has strong market concentration pressure from large corporations. The differentiation, agility and flexibility common to smaller companies, catalyzed by a better organization of strategy, can be key to survival and growth in this promising business environment.