Latest / The Pivot Podcast with Fexingo: How Businesses Change Direction and Survive Disruption / How a 150-Year-Old Seed Company Pivoted to Data Analytics
Transcript
- Lucas: When you think of a company pivoting to data analytics, you probably picture a tech startup in Silicon Valley, not a 150-year-old seed company from Iowa. But that's exactly what Pioneer — now part of Corteva — did. Luna: Pioneer. The corn and soybean seed people. How do you go from selling bags of seeds to selling data? Lucas: It started with a recognition that seed is a commodity. You can breed better hybrids, sure, but eventually everyone catches up. The real moat, they realised, wasn't the seed itself — it was the information about how that seed performs in every field, in every weather condition, in every soil type. Luna: So they already had decades of that data from their own R&D. Lucas: Exactly. They had trial data going back to the 1920s. But it was sitting in filing cabinets and later in siloed databases. The pivot was turning that institutional knowledge into a product farmers would pay for. In 2019, they launched a software platform called Granular. Luna: Granular — I've heard of that. It's farm management software, right? Helps with planting, spraying, tracking yields. Lucas: That's the basic layer. But the real power is what they call the 'Granular Insights' product. It uses satellite imagery, weather data, and Pioneer's proprietary seed models to give farmers field-level recommendations. When to plant, how much nitrogen to apply, which hybrid to plant in which zone. Luna: And they charge a subscription for this. Lucas: Per acre, per year. It's a SaaS model for agriculture. By 2023, Granular was managing over 100 million acres across North America. That's roughly the size of California. Luna: 100 million acres is huge. But that's still small relative to total US farmland — what, about 900 million acres? So there's room to grow. Lucas: Absolutely. But here's the clever part: the software locks in seed sales. If a farmer uses Granular to plan their season, they're far more likely to buy Pioneer seeds because the recommendations are optimised for Pioneer genetics. It's a flywheel. Luna: So the data product becomes a channel for the core product. Classic platform strategy. Lucas: Right. And it shifts the conversation from price per bag to value per acre. Farmers start thinking of Pioneer not as a seed supplier but as a partner in their profitability. That's a much stickier relationship. Luna: But I remember there was pushback. Farmers are notoriously protective of their data. They don't want some agribusiness giant knowing exactly how their fields perform. Lucas: That was the big hurdle. Pioneer had to be very transparent about data ownership. They let farmers control who sees their data and they don't sell raw data to third parties. They only use anonymised, aggregated data to improve the models. That trust-building was crucial. Luna: And it worked because farmers saw the value. If you can show a farmer that following your recommendation increases yield by five bushels per acre, they'll share their data. Lucas: Exactly. And the economics are compelling. Granular's subscription revenue hit about $300 million annually by 2025, with margins way higher than the seed business. The seed business might have 10 to 15 percent operating margins; the software side can push 40 percent. Luna: So the pivot wasn't just about survival — it was about upgrading the business model from low-margin commodity to high-margin recurring revenue. Lucas: Precisely. And they didn't stop with Granular. They also acquired a company called Encirca in 2020, which added more advanced analytics and carbon credit tracking. Now farmers can use Pioneer's platform to measure soil carbon and sell carbon offsets. Luna: Carbon credits. That's another revenue stream. So they're pivoting again, from data analytics to climate services. Lucas: It's a natural evolution. Once you have the data infrastructure and the farmer's trust, you can layer on new services. Pioneer is now positioning itself as an 'agtech platform' rather than a seed company. Their CEO said in 2024 that they aim to derive 30 percent of revenue from digital services by 2030. Luna: That's ambitious. But if anyone can do it, a company with a century and a half of farming relationships can. Lucas: And that's the key lesson for me. The seed itself didn't change. What changed was the business model around it. They took an asset they already had — data — and turned it into a product. That's a pivot anyone can learn from. Luna: Absolutely. And if this conversation has given you a new way to think about your own business assets, that's exactly why we do this show. Lucas: Yeah, and keeping it ad-free means it stays about the ideas, not the sponsors. If you found today useful, the way you can help is buy me a coffee dot com slash fexingo. It's a small gesture that keeps these conversations going. Luna: Totally. No pressure, but if it moved your thinking forward, that's the link. Lucas: So back to Pioneer — the really interesting question is whether other legacy industries can pull off the same trick. Can a fertilizer company become a data company? Can a tractor manufacturer become a software platform? Luna: John Deere is already trying that with their operations center. But they're starting from a different place — hardware. Pioneer started from genetics and agronomy knowledge. Lucas: Right. The common thread is using proprietary data to create a service layer. For Pioneer, that data was decades of seed trials. For John Deere, it's machine telemetry. For a fertilizer company, it might be soil test results. Luna: But the farmer has to trust you with that data. And trust takes years to build. Lucas: Which is exactly why incumbent companies have an advantage over startups. They already have the relationships. The pivot is about packaging that trust into a new format. Luna: So the next time I see a bag of Pioneer seed, I'll think of it as a data subscription with a physical bonus. Lucas: Ha, exactly. And that's the kind of reframing that can turn a 150-year-old company into a growth story.