Proprietary Product Strategy Is Evolving: Are You Ready?

One of my favourite topics is proprietary brand strategy, an area I love and think is incredibly fascinating.

This week, The Daily Scoop published two stories on the topic that I think are worth highlighting, and then I think the topic is worth diving into where proprietary products have came from, and where they are going.

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Proprietary product strategy has been emphasized within Upstream since the beginning of the publication, has come up often, such as in Navigating Strategic Development, Strategy Tax and the Opportunity in Uncertainty in Agribusiness, and is something that I have been a proponent of since my time working in ag retail, for many reasons, including those highlighted by Margy Eckalkamp, like the need to have a strategy for competing with generics, overcoming margin erosion, and the need to differentiate portfolios.

What I’d add is the element of control and optionality.

Specifically, overcoming reliance on suppliers that can govern growth and influence cash flow (eg: reliance on programs). Not to mention, you become reliant on them for innovation at a time when innovation is arising from various players and corners of the industry and not having a vehicle to capitalize on that leaves retail companies behind their competitors. Or, we could look at what happened with Bayer and Simplot or Winfield last month — you could be cut off from product access. Owning your own brand also delivers ability to influence customer experience (eg: bring in a product for your specific regional needs). Control is king.

Proprietary products and private labels are not new. In grocery it has been done for more than 100 years to compete on price, and for more than 70 years when it comes to building a “premium” and differentiated proprietary label — whether that is the well-documented Kirkland brand from Costco, or “No Name” brand from Canadian grocer Loblaws.

I first ran into proprietary products in ag retail while reading an Agrium (one half of Nutrien pre-2018) annual report in ~2012. Agrium wasn’t the first, but they were early to emphasize it and promote publicly — with the first reference from an Agrium perspective coming in the mid-2000’s surrounding seed and around crop protection in late 2007 after their UAP acquisition, which included the Loveland brand that was started in 2003 and stated as part of the acquisition logic. Since that time, Nutrien has been the most outspoken on the value proprietary products bring to their retail business, emphasizing the percentage of total gross margin coming from proprietary products. Today, that number across all product segments hovers around ~24% and has been in that range for the last ~5 years. Notably, Nutrien’s crop protection and fertilizer proprietary products are north of 30%.

As another note, US Cooperatives were selling their own labels as far back as the 1940s, and Helena has formulated its own products since the 1950’s!

The point is, this isn’t an incoming wave. It has long been coming, and if a retailer hasn’t been preparing, there is reason to believe they are already behind.

If we look at the largest US ag retailers, 70% of them already have a proprietary brand and strategy, many of them well before the current slump in new innovations coming, and the slew of patents ending:

The primary point of emphasis for proprietary strategies has historically been off-patent generics, or adjuvants. But that is not the biggest driver, or shouldn’t be, moving forward.

I think there is levels to building out a proprietary offering for ag retailers.

I historically looked at the approaches across an over simplified approach:

But, as I began working with retails surrounding proprietary efforts combined with looking at strategic efforts in the space, I began to view efforts in a more nuanced way.

A proprietary product can be differentiated in many ways. Most of them fall into three groups (non-exhaustive examples):

Formulation and handling: how the product behaves in the jug and the tank

Agronomic: what the product does in the field

Commercial: how the product is bought and supported

That led to thinking about the approach through a more comprehensive framework and evolutionary approach.

I began to think about proprietary strategy as four tiers. Each tier builds on the one before it, and each one takes more capability to execute:

Let’s take Helena for example, which has it’s “Omni” brand for off-patent products, but then has a more advanced line that Helena reformulates with its own technology (more on that approach below).

Examples include Helena's Moveo and SolvX. In Helena materials, it says several of their capabilities are patented, including some of the formulation processes. The products are sold on better performance, safety and ease of use, not on price. For example, Moveo is built for lower odor and volatility, and SolvX improves mixing and uptake. This approach would have some resemblance to what Costco does with Kirkland, slightly beating leading brands on a salient quality metric, which for Costco has built a $90 billion per year brand (one of the largest brands in the world by sales) and 33% of their 2025 revenue.

It is difficult to launch a differentiated proprietary product brand initially for an ag retailer, which is why for most retails they start at Level 1 and then move towards something incrementally differentiated over time.

This is the area many have stayed, which is a perfectly fine approach and can still be very successful, but I see opportunity for more.

In ag retail it is common to want to understand your customer and your region deeply, and then leverage that knowledge to better position a commodity fertilizer or crop protection product or a recommendation that a farm customer wouldn’t get from the competitor down the road. The even better way to monetize that insight is by creating a unique product for a specific region or to better support the customers in that region — maybe it is formulating specifically surrounding cooler conditions, maybe it is formulating to create a low-foam product (eg: glufosinate), or maybe it is to lean into something with the likes of a Vive Crop Protection and find a way to get a residual product that activates based on lower rain fall for your drier area. One of the surest ways to monetize understanding your customer and region is by building a product that is based on your unique insight.

This can also be done on the biostimulant front or specialty nutrition segment — I have built many products leveraging various approaches, whether it is formulating a nutrition product based on the physiological needs of a crop and nutrient response (eg: Pulse product with high zinc, a nutrient it is in higher demand of), or factoring soil deficiencies in a region and making a product with guaranteed analysis based on those shortcomings. This is an easier avenue to pursue than on the crop protection side, in my opinion.

For example, Wilbur Ellis invested in AgroSpheres via Cavallo Ventures, and in 2023 I highlighted the opportunity for Wilbur to bring a novel product to market because of that investment, and then in 2025 announced that Wilbur Ellis was going to be the exclusive distributor of the newly launched AgroSpheres technology via the fungicide FUN-THYME, offering a unique opportunity for Wilbur Ellis and AgroSpheres to collapse the supply chain improving economics, plus providing Wilbur more influence over the upside of their venture investment:

Or, we could look at Nutrien, which announced a partnership with bio crop protection company Ascribe Bio in 2023. Ascribe Bio needed a route to market, Nutrien needs innovation for the Loveland brand — a natural partnership that enables both parties, and is likely just the tip of the iceberg for Nutrien when it comes to commercializing unique-to-them products moving forward in the crop protection segment.

Another interesting example is KingAgRoot. For those unfamiliar, KingAgRoot is a Chinese company. KingAgRoot started as a herbicide specialist built around cyhalofop-butyl and it has since become one of China's most productive discovery companies surrounding new active ingredients. Between 2018 and 2023 it brought four patented herbicides to market (eg: cypyrafluone, bipyrazone). Newer molecules include flusulfinam, fluchloraminopyr-tefuryl, an insecticide and also fungicide candidates. One that has more significant commercial potential outside China is flufenoximacil (FFO), a non-selective burndown herbicide — Nufarm licensed it for Australia. The company has moved into breeding and gene editing as well.

They are a good example of Chinese companies moving from generic manufacturing into original discovery and licensing new chemistry to Western distributors. Let’s just look at the news from Paraguay this week where Sarabia Group was announced as an exclusive distributor in the country. The Sarabia Group is vertically integrated from the formulation and manufacturing to the retail in that country.

I believe this is a good example of what we will be seeing more of in North America — Asian companies, whether from China like KingAgRoot, or the likes of Japan (eg: Sumitomo, Kumiai) or India (eg: PI Industries), wanting a route to commercialize innovation and going through the companies that have retail access. It used to run through companies like BASF (eg: pyroxasulfone from Kumiai), but the future can also be through companies like Helena, Nutrien, Simplot or someone else. Just like in the grocery segment, companies like Trader Joes created brands and products customers love that they can’t get anywhere else, I think ag retailers can do the same if they invest in the strategy to do so.

One of the other interesting avenues for retails is: how do you combine other technology and capabilities with the proprietary brand to augment it? Let’s consider InnerPlant and their CropVoice service which could combine a decision making service with a proprietary product, or we could go a step further and consider what a future looks like where there is a collaborative label between the InnerPlant trait and the fungicide registration. All of a sudden, the retailer and it’s brand is in a unique position to assess the problem, provide the solution and potentially assess the performance of the product itself with the data.

There is a need to start at Tier 1, and then if desired, move up tiers over time. In my mind, it is a mistake to look at “proprietary product strategy” solely as Tier 1. Value brands drive the beginning, while the tiers above them are where differentiation and control increasingly will come from.

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