Agri Retail

A cooperative is an autonomous association of persons united voluntarily to meet their common economic, social and cultural needs and aspirations through a jointly-owned and democratically-controlled enterprise.

Simply put, a cooperative is a business-undertaking whereby a group of individuals strive on a voluntary basis to meet their mutual needs in such a way that the economic advantages derived from it are greater than what the individual could achieve on its own.

In South Africa, these cooperatives are standalone entities, each managed by a board of directors elected by the members of the cooperative.

Though most agri cooperatives turned to PTY Ltd business models, the very heart and nature the cooperative still live in the culture of most of these businesses.

The agricultural ‘retail’ environment has changed dramatically in the last decade. The typical producer-oriented rugged trade branch concept within a protected marketplace has transformed due to the challenges posed by fast-paced ever-transforming retail sector trends, the growing competitive marketplace and digitization that increased direct/wholesale access to farmers. Agri retailers should guard their market share, aggressively implementing new market growth strategies more aligned to international best retail practice and digitize through implementing a multi-channel sales strategy that include an online component, if they wish to survive.

Traditional agri retailers are already undergoing transformational change propelled by manufacturer mergers, farmer consolidation and technological advancements along the agricultural supply chain. These changes are forcing traditional agri retailers to review their practices and strategies to better compete and meet their farmer-customers’ needs. Online competition will continue to intensify and pressure margins. The growth of online ag retail will accelerate this change. However, it is expected not to change the basic business model of agri retailers, which is grounded in product distribution and service provision.

Agri retailers has the competitive advantage of a wide-spread footprint for distribution and service delivery. They should capitalize on this advantage by advancing towards implementing a multi-channel sales strategy. This strategy provides farmers multiple avenues to interact with an agri retailer. A full online interface may soon even become standard practice, allowing chat, video calls, e-commerce, service scheduling and other capabilities through an integrated customer centric online service platform.