Feeding a growing planet through collaboration
In 2021, HELM Agro and Alltech Crop Science announced an exciting partnership that aims to bridge the gap between traditional and biological crop input solutions in the U.S. Dave Schumacher, president of HELM Agro, joins the Ag Future podcast to give an update and share his tips on cultivating a successful partnership.
The following is an edited transcript of the Ag Future podcast episode with Dave Schumacher hosted by Tom Martin. Click below to hear the full audio or listen to the episode on Apple Podcasts, Spotify or Google Podcasts.
Tom: Welcome to Ag Future, presented by Alltech. Join us from the 2022 Alltech ONE Conference as we explore opportunities within agri-food, business and beyond.
I'm Tom Martin with an Alltech Ag Future podcast. We're joined by Dave Schumacher, president of the family-owned, more-than-a-century-old crop protection company HELM, to talk about the value of forming partnerships. Welcome, Dave.
Dave: Thank you, Tom.
Tom: In an Ag Future podcast last year, you brought us up to speed on what sorts of services HELM provides. But if you wouldn't mind, give us a refresher.
Dave: Yeah, thanks. HELM has several businesses. In the U.S., we're based in Tampa, Florida. I'm in the crop protection business, so we supply herbicides, insecticides and fungicides to our retail partners, and then they sell to growers. Then we recently got in the relationship with Alltech, (and through) that we're offering a biological portfolio along with it.
HELM is also in the crop nutrition business. We have 21 river terminals in the U.S. where we supply retailers with N, P and K (or nitrogen, phosphorus and potassium) for the farmers' needs. And then we also have an industrial chemicals business as well.
Tom: When we did talk in August of 2021, HELM had just entered into a partnership with Alltech Crop Science. What attracted HELM to Alltech, and how has that partnership performed in the year since?
Dave: Yeah. Thanks, Tom. The partnership is going really well. What attracted HELM to Alltech was the science that they had and the research and long-term vision. Alltech is a family-owned company that is in it for the long run. HELM is a family-owned company that's in it for the long run. So, our cultures were very similar in that we're committing to this partnership for the long term. We kicked off this partnership in October of last year, and it's gone really well.
Tom: Is it fair to say that the aim of this partnership is to bridge the gap between traditional and biological crop input solutions? And I'm wondering: Are you seeing progress in that effort?
Dave: Yeah, absolutely. I think the biological products group, as a segment of portfolio, is growing significantly. It's probably in that 15–17% growth rate annually. That was a market that we wanted to be in. We were mostly in traditional crop protection — so herbicides, insecticides and fungicides. The biological part is still kind of a niche out there in the market. We see a great space for us to bring the traditional crop protection products and the biologicals together to give farmers more options to control their pest issues that they have and also reduce the amount of traditional crop protection used on crops.
Tom: How can that combination of traditional and biological support sustainable practices?
Dave: You know, I think there are two things. One (is) the area of soil health. Soil health is kind of a buzzword that's thrown around in the industry right now, but there are products that we're going to be able to bring to market — hopefully in broad scale — to help growers address some of the soil health challenges that they have. So, that's one area. We also think that there's an opportunity to incorporate biologicals into a cropping solution, which would potentially reduce the amount of traditional crop protection used. In some crops, there's fungicides that have been used almost on a weekly basis. And if we can rotate some of those applications, traditional chemistry applications, with a biological that would give you the same or better output, that — it's going to be better for long-term sustainability.
Tom: Does this provide growers with easier access to full-spectrum integrated crop solutions?
Dave: Yes, I think it does. One of the things that we bring to market is our connectivity to the customer base. So, we work with all the large retail channels in the U.S. on our fertilizer side and also on our crop protection side. As we're able to bring those portfolios to the market through those channels, I think it gives growers broader access. And we want to be able to solve the grower’s problem, whether it's (through) a traditional chemistry or biological. This gives us the opportunity to bring both of those solutions and give growers options.
Tom: We talked about the mutual benefits of the partnership between HELM and Alltech, and I just would like to focus on partnerships in general for a moment, if we could. Are business partnerships inspired by discovering mutually beneficial assets that each partner might not possess on their own?
Dave: Yeah. I think, as we looked at this relationship, we have a very good development program, but we're not into the basic research of creating those new products, which — that's what Alltech is really good at. We're good at our go-to-market and bringing those products to customers. In this relationship, we feel we can reduce any overlap. There's kind of a clear handoff of what Alltech brings to the party and what HELM brings to the party.
Tom: Partnerships or collaborations are all about give and take. But when it comes down to negotiating that arrangement, do the parties necessarily seem to become more protective of their brands and their assets, and do those matters have to be laid out on the table, understood and agreed upon before moving forward to a final agreement?
Dave: Yeah, I think so. And I think the key to partnerships is doing a lot of due diligence and really understanding the culture and being able to understand the long-term vision if you have to have an agreement to work out all the details. But something always comes up. You want to have that win-win mentality so that you can keep doing positive things together.
With our relationship with Alltech, we do a lot of collaboration. One of them — we have an S&OP process, sales and operation planning, where we meet on a monthly basis and provide rolling forecasts. They're looking at inventory levels. We're looking at inventory levels. So, that minimizes the risk that either of our companies could be in from an inventory standpoint. But those relationships need to be as transparent as possible and need to be (present) throughout the whole organization.
So, the owner of HELM is the Schnabel family. Our CEO is Stephan Schnabel, and he's about 47 years old. And (president and CEO of Alltech) Mark Lyons (is a) similar age, probably a little younger. They've created a good relationship, a good working relationship, that — we're able to take what we've started in the U.S. and multiply that in some other countries.
Tom: You mentioned being as transparent as possible, and I take it — does that mean there are going to be certain proprietary matters that can't be laid out on the table, and that's understood?
Dave: Absolutely. I think, from a technology standpoint, Alltech owns the technology and the registrations associated with that technology. We're working on a product right now that — we're going to premix a synthetic crop protection product and an Alltech biofungicide together in the same jug. And that will be one opportunity for us to work out the IP associated with that and have some joint IP over new product introductions like that.
Tom: That's actually a working example of that bridge we were talking about.
Tom: All right. Is there a risk in a partnership of too many cooks stirring the stew? Do roles need to be clearly defined, clearly clarified?
Dave: Yes, yes, absolutely. Because when you announced the partnership, everyone wants to jump on the bandwagon and enjoy the fun. But we needed to make sure people knew what role they had in the organization.
So, we're a global business. Alltech is a global business. So, making those connections between our leadership in Germany and local leadership now is critical. We have an account plan. We have “who contacts who” (plan). It's just making sure we're as clear as possible.
Tom: Have you gotten far enough into a negotiation with a potential partner only to discover that, in the end, the proposed partnership is really not right for you or your company?
Dave: Yeah. I think, as you explore different options, you get a sense, and as you go through the due diligence, you get a sense of the culture and you get a sense of how that relationship feels. It's kind of like dating or getting married. As you're doing due diligence in scouting that relationship out and wanting to see that there's a clear win-win in for both parties — and when you get to the end, if it just doesn't feel right, (you) probably need to go with your gut on that one.
Tom: I've heard it described as something of a dance.
Tom: Do you encourage ag businesses to be open to forming partnerships inside and outside of the industry?
Dave: Absolutely. I don't believe that one company can do it all, so they’ve got to find their area and be really good at it and augment that route to market or business with other partnerships that can bring strong expertise into a certain area. So, I think partnerships are going to be a big part of growing our future.
Tom: Are there new HELM partnerships that you can tell us about?
Dave: Yeah. We're excited about a new joint venture that we formed with Cargill about last week, actually. We had a groundbreaking ceremony in Eddyville, Iowa. And HELM and Cargill are joining together. They're building a $300-million plant in Eddyville, Iowa. That plant will consume corn and produce BDO, which — BDO is an input that goes into biodegradable plastics. So, we're launching a company and a brand called QIRA, and it's going to be sustainable, made-from-corn products.
Tom: Biodegradable plastics. That is definitely something needed on this planet today, isn't it?
Tom: What's been the most important thing, Dave, that you've learned so far from this partnership with Alltech?
Dave: I think communication is key. So, we communicate very frequently. As we see opportunities and challenges come up, we have those dialogues so that nobody is surprised by either upsides or downsides. So, I think communication is key — and trust. Trust and communication.
Tom: That's Dave Schumacher, president of the crop protection company HELM. Thank you for joining us, Dave.
Dave: Thank you, Tom.
Tom: I'm Tom Martin for the Alltech Ag Future podcast series. Thank you for joining us. Be sure to subscribe to Ag Future wherever you listen to podcasts.