13. UPL Vs Bayer

How did UPL and Bayer Crop Science fare in 2021 with respect to digitising Indian Agriculture? Who currently has an edge among the two?

A farmer values the uniqueness of the produce, while the buyer values the sameness of the produce. Meet farmer Pandurangan and his family standing tall with their tall ridge gourd. Snapped during my field travels in the south of India.

Dear Readers,

Hi! My name is Venky. I write Agribusiness Matters every week to help us make sense of vexing questions of food, agribusiness, and digital transformation in an era of Climate change. Feel free to dig around the archives if you are new here.

I want to talk about UPL Vs Bayer, Better Life Farming, and Nurture.Farm.

01/ When I think of UPL Vs Bayer, the first visual that comes to my mind is this.

02/ And I am only half-serious:) (Batman ~= Underdog = UPL)

If you go by the global numbers and contrast Bayer with UPL, it might seem as if UPL is trailing behind as a prime challenger a.k.a. “5th largest crop protection company globally”

03/ Where things really get interesting is when you unearth the devil that lies in the details.

My Agtech Analyst friend Shane Thomas did a terrific job analyzing UPL’s 2020 Annual Report. These were my favorite takeaways.

• Heavily Non-US, Non-Europe focused with 70% business focused on Asia, Australia, Latin America, and Africa. Alright. So What?
• If you factor in what we know about climate change and the dystopian future of agriculture($), you get the scale of their focus.

Regular readers might remember the graph below I had shared in my dystopian future of ag essay, which maps 1961-2013 evolution of the average yield in plant food calories (kcal) on the vertical axis (a proxy for intensification), the evolution of the net cropped area per farmer on the horizontal axis (which is a proxy for the size of farms or the level of motor-mechanization) and, last, the evolution of the concomitant progress of agricultural labor productivity on the isocurves        

“Over half a century, you can see that the labour productivity of OECD farmers has risen from 66,000 to 658,000 kcal/day on average, a tenfold increase, while in Asia it has only increased from 7,900 to 25,000, barely three times.”- Bruno Dorin

• Strong generics play, stellar herbicide presence, and future-focused on biologicals, especially after the $4.2 B2 Arysta acquisition in 2018. Also better equipped to deal with post-patent products whose market size will cross over $ 4.1 billion by 2026.
• ‘Disproportionately low expenditure of their revenue on R&D at about 2%’.

03/ Where Bayer Vs UPL competitive study further gets interesting for me is when I zoom into their India digitization play.

In my previous subscriber-only essay, When Bayer Met Microsoft, I had touched upon Bayer’s gameplay to achieve ‘digital-only sales by 2030’ and looked at the lesser-traveled developing countries’ road to achieving this moonshot goal.

04/ Strategic initiatives to achieve digitalization of agriculture in developing countries often don’t look like strategic initiatives.

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