Ag distribution at a crossroads: 5 strategic moves to make before 2030
John Brubaker
If you’re an Ag distributor, you’re standing at a crossroads — whether you realize it yet or not.
Margins are razor-thin. Year over year, they keep shrinking. Meanwhile, the days of a solely transactional buy-and-sell business model are rapidly fading. Retailers are demanding more value from their distribution partners. If you don’t keep up — if you cling to the status quo — the risk to your organization is existential over the next few years.
Because challenges to the current Ag distribution model are no longer theoretical or distant. They’re already here.
By 2030, these challenges will toss distributors into two buckets: industry leaders, or those struggling to survive.
While you can’t control the larger economic or market factors that squash margins … there are strategies you can start enacting now to insulate your organization and fortify it as a next-generation leader.
Here’s how to stay ahead in the next era:
1. Develop proprietary product offerings
If you haven’t already started R&D for your own unique, branded solutions, now is a good time to begin. By 2030, these proprietary products will be the norm. And they will be one of the few slivers of differentiation in an otherwise commoditized market.
Sure, it takes a lot of time and work to develop your own blends or solutions. But they can bring you:
Higher margins compared to standard products
More loyalty and less price sensitivity from customers
A competitive edge that others won’t be able to replicate
Some organizations have already jumped on this train.
Others are asking, “What products do we spend the resources to develop?” This will depend on your organization and its strengths.
Forward-thinking distributors are already creating value both for their retailer networks and customers, and those retailers' grower end-users through specialized nutrient formulations, custom seed treatments, sustainable biologicals, and data-enhanced product offerings that deliver measurable field outcomes rather than just inputs.
The real opportunity lies in identifying meaningful pain points across the value chain—whether for your direct ag retail customers or for the growers they serve—to help build customer loyalty and protect your margins at each level of distribution.
2. Master advanced forecasting and demand planning
As hard as it might be to picture, by 2030, margins will likely be even thinner than they are now. One strategy that can directly impact your profitability and optimize your decisions is precision planning. It’s no longer enough to just buy and sell, while using guesswork models to determine how much you or your customers need.
This next era’s most successful distributors will be the ones who effectively leverage data analytics to forecast supply and demand. Predictive analytics can help you reduce your carrying cost, avoid obsolete inventory, put yourself in a better negotiating position with manufacturers, and smooth out your cash flow.
Here’s the data you need to start collecting, organizing, and evaluating — if you’re not already:
Historical purchasing patterns
Real-time inventory across multiple locations
Market signals / commodity price trends
We’ll never be able to fully predict the future. But data can be powerful in optimizing our forecasts. More strategic decision-making flows from there.
3. Build stronger, more connected retailer networks
The siloed communication environment throughout the Ag retail value chain is already starting to show its cracks. Inaccurate, outdated, or incomplete data as the norm is not sustainable. (Just ask the members of your team tasked with reconciliation.)
In the next few years, repairing that environment and creating more seamless data connections with retail networks or partners could be some of the most important work successful distributors do.
When clean data flows up and down the value chain, everyone wins. Organizations avoid expensive data cleanup duty. The end-of-season reconciliation rush gets way less stressful. Planning happens proactively and collaboratively, rather than reactively. And with real-time data on hand, responding to market changes quickly gets easier.
What does this cleaner, more functional digital ecosystem need?
Real-time visibility over inventory
Standardized data formats and connection protocols
Shared forecasting tools and joint planning platforms
Automated order processing and fulfillment tracking
4. Help retailers find margin beyond price discounts
It’s clear that the era of simply buying and selling is ending. As we inch toward the 2030s, there needs to be additional value built onto transactional discounts. Price-based competition is just a race to the bottom — a race that absolutely no one can afford any longer.
Think about how to create “stickier” relationships with your retail network or retail customers that can survive market turbulence or price pressures. What high-value services — like agronomic consulting/training or access to crop production-related digital tools — can you offer on top of your products themselves?
Extra value-add can lead to more stable business relationships.
That will make your organization sustainable into the next era. Cheaper prices will only get orders in the door in the short run — and that strategy is no longer enough to survive alone.
5. Embrace technology — without trying to become a tech company
Digital tech adoption is no longer negotiable. By 2030 — and likely even before that — it’s a must to having a thriving distribution business.
You need a digital ecosystem that prioritizes clean data, integrates with other pieces of the value chain, optimizes your internal processes, gives you real-time visibility over data and inventory, tracks and plans demand, and empowers more accurate forecasting.
But don’t worry. That doesn’t mean you have to become a tech company or start hiring software developers.
In fact, the risks of tech DIY projects are big:
Stretched resources (both financial and human capital)
Diverted focus from your true mission
Inability to keep pace with specialized tech companies — and therefore a tendency for your DIY systems to quickly become outdated
Substantial ongoing maintenance costs
Instead, partner with an established tech provider who truly understands both your organization and industry.
At Smartwyre, we’ve spent years deeply embedded in the Ag input value chain to identify the biggest challenges — and purpose-build solutions to fix them. Our industry-specific tools help distributors optimize margins, improve forecasting, and streamline operations. No evolution into a tech company necessary on your part.
Prepare now for 2030 success
Change is already here for the Ag input supply chain. But a full evolution won’t happen overnight.
However, just because some of the biggest shifts might still be a couple years away doesn’t mean you shouldn’t be preparing now. In fact, the most forward-thinking distributors are already implementing some of these strategies, even just incrementally.
To assess your readiness, ask yourself a few questions:
Where do you stand on each of these five strategies?
Which area presents your greatest opportunity?
What’s your first step towards seizing that opportunity?
If you need a little extra support with figuring out your next-gen preparedness, or how your organization can strategize for its next era, we’re here to help.
Contact the Smartwyre team to learn how our platform can support your journey toward becoming a leading next-generation distributor.
