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How Akralos plans to leverage legacy brands in its first year
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Brian Gier, CEO of Akralos Animal Nutrition, discusses the priorities guiding the integration of the ADM-Alltech commercial feed joint venture — and why people, customers and plants top the list.
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Transcript
Introduction and Welcome
00:00:08
Speaker
Hi everyone, welcome to Feed Strategy Podcast. I'm your host, Jackie Remke, Editor-in-Chief of Watts Feed Brands. This edition of Feed Strategy Podcast is brought to you by FeedStrategy.com.
00:00:22
Speaker
FeedStrategy.com is your source for the latest news and leading edge analysis of the global animal feed industry.
Acrolose Joint Venture Overview
00:00:30
Speaker
Today we're joined by Brian Geyer, CEO of Acrolose, the joint venture between ADM and Alltech.
00:00:39
Speaker
Geyer is here to outline how Acrolos plans to integrate 45 facilities and 1200 employees under one company while building on nearly 250 combined years of brand equity from Hubbard and Masterfeeds.
00:00:55
Speaker
Hi Brian, thank you again for taking the time to speak with me. Well, let's get right into it. Why don't you tell us a little bit about yourself?
Brian Geyer's Background in Agriculture
00:01:03
Speaker
You bet, Jackie. Thank you for having me. My name's Brian Geyer and fortunate to be CEO of Acrolose Animal Nutrition. I've been in the feed industry my entire working career. So it's an industry that I love. I grew up on a farm in central Missouri, a dairy farm that my parents still operate to this day.
00:01:25
Speaker
And you could say my entire family's in ag. actually met my wife showing cows at the Missouri State Fair. And she comes from a farm family as well. I will say it's been in our family for a long time, but had the opportunity to work in animal nutrition, lived in a lot of different places. I think I'm on my eighth move. So I've had a chance to live and work in a lot of areas across the U.S. in the feed space and i really enjoy the people that you get to work with in this industry. That's the best part from my perspective.
Formation and Strategy of Acrolose Joint Venture
00:01:59
Speaker
Great. And how were you brought in during the creation of Acrolose? Yeah, so I joined Alltech three years ago and at that time came in i was working on their overall commercial strategy here in the U.S. and had the opportunity to be part of putting together the joint venture with ADM kind of on the ground floor, which was exciting as we put this together.
00:02:30
Speaker
ADM men and Alltech have had a relationship stretching back to 1980. When ADM was Alltech's first customer, how does that shared history shape the culture and strategy of Acrolose? And what does it mean to formalize that partnership into a single company now?
00:02:47
Speaker
As you said, Alltech and ADM have a rich history of with them being Alltech's first customer. And I think that history really forms the most important part, which there's a mutual trust and respect.
00:02:59
Speaker
from both companies within each other. And anytime you do, whether it's an acquisition or a joint venture, as you know, trust is foundational.
00:03:09
Speaker
I think followed closely by shared values. Both companies prioritize the value of people. They value the industry that we serve in. And so that aligns, which makes this joint venture impossible.
00:03:25
Speaker
Beyond that, I think what really became apparent to me as I came in is the strengths of each company really complement each other. When you think about all tech rich in technology, feed additives, ADM, world-class supply chain business,
00:03:47
Speaker
Both companies really bring strengths that I think complement and really help the commercial feed space. So that to me made it just a natural fit for both companies to come together.
Integration of Alltech and ADM Businesses
00:03:58
Speaker
How long were Alltech and ADM exploring the concept of joining forces? When did that dialogue begin? From my understanding, as I've said, I've been here three years, they started initial discussions back in 2016.
00:04:14
Speaker
And as with any type of venture like this, there can be starts and stops along the way. And we were just excited to kind of get to bring it home this time.
00:04:26
Speaker
Excellent. And now describe for the folks who may not be familiar with the scope of this joint venture. Can you dig into that a little bit, please? You bet. The scope of the joint venture would be Altec's commercial feed business in the U.S., which the average consumer out there would know as Hubbard.
00:04:49
Speaker
It would include Altec's commercial feed business in Canada, which is known as Master Feeds, and it would be ADM's commercial feed business in the U.S.,
00:05:01
Speaker
Those would be the assets coming together. What it doesn't include would be Alltech's remaining Ridley business. You sometimes will hear the name Ridley, which is the block business as well as premix business. So it's just a commercial feed business of Alltech and ADM in the U.S.
Operational Priorities: People and Quality Service
00:05:24
Speaker
and Canada.
00:05:24
Speaker
And how many feed mills and employees does that entail? From a feed mill perspective, over 40 feed mills, I think 45 in total. And then from an employee base, over 1,200 employees.
00:05:41
Speaker
What's the production capacity across those 40 facilities? Production capacity would be excess of 2 million tons. Now, what are the biggest operational priorities in the near term as you and your team work to integrate those assets and teams under one name?
00:06:00
Speaker
Yeah, as we look at priorities, day one, it's really been focused on people. We see that as our greatest asset and making sure that we establish the right culture, get people positioned correctly and prioritize that also provide a framework for people to continue to grow and develop.
00:06:22
Speaker
So that is our number one priority, followed closely by our number two, which is customers. We believe that our greatest potential for growth remains with our customer base and just making sure that we continue to take care of them and prioritize them in the way that they're used to continue to partner with them.
00:06:41
Speaker
And finally, operationally, just to make sure that we continue to provide the quality service that our customers are used to as we move ahead.
Benefits for Feed Retailers and Producers
00:06:52
Speaker
Those would be the top three from my perspective. Great. And then how far into this process are you currently? We have been drinking from the fire hose since we closed, but it's been great. We've had a number of plant visits, both in the US and Canada, as well as team member visits and some customer visits. So it's been great just to be out and making sure we meet the team members. And it really focuses back to what I just talked about on our key priorities is making sure we are true to people, customers, and our plants.
00:07:31
Speaker
You mentioned the importance of customers in practical terms. What does this joint venture mean for the producer and also the feed retailer? As you think about customers in the feed world, we serve a lot of different channels that ultimately then get product to the farmers and people that may have a backyard animal that we think of. From a channel priority perspective,
00:07:57
Speaker
As you think about what we would call dealers, cooperatives, farm and ranch stores, our priority and focus with them is just to partner with them in a more meaningful way.
00:08:09
Speaker
And when we use the word partner, to me, it's forming a relationship, giving customized solutions that help them to perform in their marketplace, because not all markets are created the same.
00:08:23
Speaker
and just help them maximize their growth, profitability, and the ability to service their customer, which is ultimately the farmer, where we wanna do the exact same thing, is to take care of them, making sure they get the products that they need in the way that they want to get it and help them maximize their animal's productivity.
Brand Equity and Company Naming
00:08:47
Speaker
That's really our focus and our goal as it relates to our customers.
00:08:53
Speaker
And Masterfeeds maintaining and protecting their brand equity. What does Acrolose plan to establish the connection with that parent identity? What's the strategy there?
00:09:05
Speaker
Yeah, as we think about that, Jackie, our Acrolose is the company name, but from our vantage point, our customers know us as Hubbard and Masterfeeds.
00:09:19
Speaker
Hubbard in the U.S., Masterfeeds in Canada. and when Our customers see us, they're going to see Hubbard and they're going to see Master Feeds. They're not going to see Acrolose. That is the company name, but we're going to continue to build on the equity of the Hubbard brand, which in two years will be 150 old.
00:09:39
Speaker
And then the Masterfeeds brand, which is 97 years old. So almost 250 years of brand equity in those two brands. And you know, as well as I do, how hard it is to build brands.
00:09:53
Speaker
And we're just fortunate, feel blessed to have brands that have been around that long, stood the test of time. And we want to continue to put the effort behind those as we move ahead.
Growth Strategy in Livestock and Dairy Sectors
00:10:06
Speaker
Since Acrolose will be serving both food animals and leisure animals, are there segments where you see the most growth potential and are there species or geographies that you're keeping an eye on?
00:10:20
Speaker
Yeah, absolutely. From a species perspective, I always say you you got to start with where you're the strongest. and both, all three companies really share a lot of strength in growth in what I call commercial livestock.
00:10:38
Speaker
I know that's a fairly mature industry in both US and Canada, but all three companies have had a strong presence and strong growth there led off by what I call grass cattle.
00:10:50
Speaker
That business is really in the wheelhouse of all three companies in an area that we want to continue to grow, to innovate, because we think there's just a lot of upside growth potential there.
00:11:02
Speaker
followed by commercial dairy, both adult and what I call young animal. think you're aware of the dairy beef segment. has grown tremendously and that's an area of high focus for us as a company.
00:11:18
Speaker
Followed closely by the lifestyle business, which is equine, backyard flock, and show, as you think of that space, it's broad. Those would be the primary species there that have our greatest attention.
00:11:34
Speaker
Geographically, we believe today we can service The key markets through, I'll say, kind of through Colorado, a bit west of there, up through Montana.
00:11:49
Speaker
We can serve that effectively and excited about doing that. We'll continue to look. We would like to continue to grow our presence in highly dense, I'll say cow-calf and lifestyle areas.
Innovation for Producer Challenges
00:12:04
Speaker
We think that's an opportunity for us to continue to grow as we move ahead. Feed manufacturers globally are navigating those evergreen issues that are not new to anybody in the business. With the combined infrastructure, how does Acrolos plan to help customers manage and navigate those challenges in a way that the three separate entities maybe couldn't?
00:12:30
Speaker
I would say, as you think about that, it really starts, in my opinion, with innovation. and Any technology where we're trying to have ah really positive impact environmentally starts with it's got to be good for the producer because just to have them do it, I think is asking a lot because we know we're in a a tighter margin business all the way around.
00:12:59
Speaker
So our focus from a technology standpoint is how do we bring technologies to that producer that's gonna have a positive impact on the environment, as well as a positive impact on performance.
00:13:12
Speaker
And our parent companies together are both in that same mindset. And our belief is we can bring technologies to market and a faster way to help producers in
Partnership and Customer Growth
00:13:27
Speaker
that segment. we've had couple of different examples of that over the past two years and we're excited to continue to grow it.
00:13:36
Speaker
In the materials surrounding the launch of Acrolose, it's been described as an advanced nutrition partner. What does that distinction mean to you and how will it measure whether or not it's delivering that to its customers?
00:13:51
Speaker
As you think about partnership, to me, it starts with it it has to be a win-win situation for our customers. If it's not, it's really not a partnership. It's kind of a one way, it's just good for us and not them. And from our vantage point, we think it's important that we sit down with our customers, both with our sales team to have sit down with them and ask about what are their priorities.
00:14:20
Speaker
And then we overlay how we can help them meet their priorities. Again, not every market being the same. That's one way. And how do we help them grow? Beyond that, we also have several mechanisms where we sit down with customers on a national basis in both countries and talk to them. And we always lead off with How are we doing? How can we help them grow?
00:14:48
Speaker
And we think by getting information locally as well as nationally, it gives us insights into what they're wanting and needing, and then we can customize our solutions to meet their needs.
00:15:00
Speaker
As far as tracking it, from my vantage points, there's a quantitative and a qualitative mechanism to it. From a quantitative mechanism, think it gets back to growth, profitability,
00:15:16
Speaker
for our customers, I think both really matter for them. Are they growing and is their profitability going where they want? And we believe we can help them maximize that, which is key to their short-term and long-term viability.
00:15:31
Speaker
Beyond that, from a qualitative perspective, we think the listening and insights meetings are key to that, where we're really asking and getting direct feedback about how we're doing and what are the things we need to do to continue to further partner with them.
00:15:46
Speaker
From my vantage point over my career, the best ideas that we've ever implemented have come from customers recommending, giving us ideas that we can then build on to put
Unique Product Strategy for Animal Health
00:16:01
Speaker
solutions around it. So we're excited continue to partner with and learn from our customers as we move ahead.
00:16:08
Speaker
Given your extensive history in the industry, what do you think that you uniquely bring to this position in Acrolose that will help achieve its success? From my vantage point, the primary one is We have a unique product offering. We practice selective distribution, which is we don't just put our product everywhere. We want to put it in places where people have the ability to grow, which allows them to have room to operate.
00:16:42
Speaker
without having the same product competing with them, which ultimately allows them to be differentiated, which I think is important to their customers and help with overall profitability. The other aspect I would say is the one thing when I came into Hubbard, I spent the first six months really just listening, going and talking to dealers, customers,
00:17:09
Speaker
And the overarching theme was the product works. And we all know not all things are created equal. And I think positive is from whether you're a dealer or a person using our product, they work.
00:17:26
Speaker
And that's what we want to be known for is having products that work to maximize that animal's health first and their productivity beyond that. And I think those two areas, the ability to differentiate and the ability take to help animals reach their maximum productivity or are key points of difference.
Acrolose's Vision as a Trusted Name in Nutrition
00:17:47
Speaker
Excellent. Anything that we didn't touch on that you'd like to discuss? I would say, Jackie, our goal is to be the most trusted name in animal nutrition. And growing up where I did in Missouri, Missouri is known as the show me state. So I guess it's been in me my whole life.
00:18:05
Speaker
But we want to show our customers. We don't want to say, hey, trust us. We're going to tell you. We want to show them. that we do what we say we're going to do. We deliver more than what we say we're going to do.
00:18:18
Speaker
And that's the culture that we're trying to create here is just being a brand and a company that people know and they trust. And we feel like if we do that, we think our customers will be successful. And if they're successful, we'll ultimately be successful too.
00:18:37
Speaker
Thank you so much, Brian. And thanks to everybody for tuning in.