AgRevolution: Disrupting the Ag Dealer Model

LOUISVILLE, Ky. (DTN) -- AgRevolution set out at its founding in January 2021 to be a different kind of farm equipment dealership -- structured to disrupt the ag equipment business by delivering directly to the farm its technicians, services, parts, technologies and coming soon, its equipment acquisition and financing services.

AgRevolution, known more simply by insiders as AgRev, is a wholly owned subsidiary of AGCO Corp. It is an agricultural equipment dealership providing products and support services to farmers in Kentucky, southern Indiana, and southern Illinois for AGCO brands Fendt, Gleaner, Massey Ferguson, Hesston by Massey Ferguson, Precision Planting, RoGator/TerraGator, and Sunflower.

AgRev was born with the acquisition of the agricultural assets of Boyd Company of Louisville, Kentucky. It is meant to have a light footprint, fewer bricks, more rubber. Today, AgRev operates eight stores, but also with a mobile fleet of 40 forward-deployed service trucks, a quarter-million-dollars each, bringing techs, parts and repairs directly to the farm or to the field. It announced its newest expansion last October with the purchase of M&S Implement Company Inc. in Harrisburg, Illinois. The location will operate under the AgRevolution brand.

AGCO points to AgRev and other, similarly focused dealers, as key drivers of its newly announced FarmerCore program (https://www.dtnpf.com/…). FarmerCore is the outward expansion of AGCO's long-held farmers first strategy -- bring technicians and services as close to the farm as possible with service fleets, parts-only stores and, or service centers, and digital tools to enhance customer support.

AgRevolution is led by CEO Stacy Anthony, a 30-plus year veteran of the industry. Prior to AgRevolution, Anthony was CEO of the MirTech Harvest Center, Memphis, Tennessee, and international sales manager for Brandt Holdings Company, an international exporter of John Deere farm machinery.

"We want to disrupt this industry," Anthony told DTN/Progressive Farmer on Thursday, during a visit at the National Farm Machinery Show in Louisville, Kentucky. "We want to revolutionize the way business is done, to bring services to the farm. We want to help farmers be more profitable. We are accomplishing those. But we're not stopping there. We want to continue to redefine how this business is done."

The following is a portion of our discussion with Anthony.

DTNPF: Tell us about AgRevolution.

Anthony: We are three years, going on four. We started with 38 employees. Today we have over 90 employees. Our revenues have grown over 400% over the last three years. We are not a traditional dealership. We started this dealership with a totally different mindset and that is on-farm focused. I'd say 90% of our business today is done on the farm or in the field.

DTNPF: In AgRevs early days you probably talked to more than just a few farmers. What did they tell you?

Anthony: We looked at the industry and [found] this was an industry dominated by two, one for almost 180 years. We know who those are. One is red and one is green. We said, if we're going to be a third angle of choice, we have to do something different. So, we went out and talked to farmers and we asked them, 'How do you want to do business as a next generation farmer and what should the next generation dealer look like?' They spoke loud and clear. 'We want to do business on our farm. We want to transact on our farm.' So we swiveled and adopted an on-farm mindset in everything we do. I think with 400% growth over three years, the farmers have ratified how they want to do business.

DTNPF: How do you move the AgRev business, its services closer to the farm and the farmer?

Anthony: Basically everything you could get at the dealership, we can do now on the farm. We have equipped the resources to do that on site. So, what does that mean? It means that a mobile service truck, with a mobile office in the front, digitally capable of clocking in on work orders, entering and editing comments, and a highly equipped mobile workshop on the back. These are quarter-million-dollar machines. We started with 16 [trucks] and today we have 40.

DTNPF: You've described this as smart market coverage.

Anthony: [FarmerCore] is AGCO's solution to [move] the dealer in closer proximity to the farm. One pillar of FarmerCore is smart market coverage. We're going to look at the market and let it tell us what that market needs. If it needs light retail outlets, like a hub store with parts, sales and service, or if it needs service-only locations and parts-only locations. We're going to let the market tell us and adapt to that market to better serve the farmer. But this is all with the premise of getting parts and service solutions closer to the farm.

DTNPF: Tell us about the service trucks.

Anthony: There is one person in the truck. It is kind of like his own business. He is responsible for the revenue, for the income and expenses on that truck. When he rolls up on a farm, the one thing the farmer likes is seeing our truck there working on his machine.

DTNPF: Farmer walks out of his home in the morning, cup of coffee, just had breakfast. What's his mindset when he sees your tech already there?

Anthony: Think about it. Let's say it's a Class A combine. He doesn't have to load that Class A combine onto transport, in some states with a heavy haul expert and two escorts, and export that combine to the dealership. Unload it, repair it and on return, repeat all those [transporting] steps. That is expensive. That farmer likes to see us working on his combine on his farm; that $700,000 combine never leaves his farm. Whatever he needs, his full service sent is delivered to the farm. A full set of solutions, end-to-end, delivered right there.

DTNPF: OK. You get techs to the farm. But how about the parts he may need?

Anthony: In certain markets we have concentrated areas of parts, where we stock all the critical machine parts for a particular model. We are about to [announce] soon a new delivery service that will deliver parts to the farm, to a tech within a few hours. We're aligning with a third-party partner that will help us accomplish that. It will bring speed-to-solutions to the marketplace. It will speed solutions to a technician, keeping him from having to come back to the dealership.

DTNP: You mentioned earlier in our conversation here today about farmers buying and financing equipment online, from their home office. Would you explain?

Anthony: We're going to release in the future a customer portal where you'll be able to go in there, configure [a piece of machinery] on-line, spec it and finance it. We'll also have applications in the [portal] where you can schedule service calls, track part deliveries; do the things that deliver immediate solutions to your farm enterprise.

DTNPF: You've talked about coverage versus size and scale. Explain what you mean.

Anthony: Take a look at some of the larger competitors in our area. Some of them have 31 locations. When you look at a map and you say, 'How does that compare to an AgRev model, with eight brick and mortar locations, but 40 mobile services that are close to the farm, actually embedded into the coverage area?' There is a strong, illustrative point here. The farmer looks at all this and says, 'Maybe I don't need a dealership every 20 miles because I've got parts here and service right here.' Solutions are brought to the farm, where the farmer wants to do his business.

Dan Miller can be reached at dan.miller@dtn.com

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