Burbank Family Seeds (BFS) is a family-owned seed company located in Southern Ohio. The firm is owned and managed by two siblings, Julie and Craig Burbank, the grandchildren of the original owner, Thomas Burbank. For decades, the Burbank name has been known for high-performance seed corn and soybeans in Ohio, Kentucky, and Indiana.

BFS attributes their success to their dedication to the customer and their core values. The number of independent seed companies is shrinking as major multinational players in the market continue to grow market share. However, despite the consolidation in the marketplace, Julie and Craig believe there are opportunities to continue to tailor products for their specific geographic region as compared to having to breed seed varieties suitable for much larger geographies.

The firm currently employs 10 full-time personnel, in addition to Julie and Craig and 15 part-time personnel. In 2015, BFS decided to undertake a $12 million expansion that will more than double their seed processing capabilities from 225,000 bushels to 525,000 bushels. This expansion will more than double storage of bulk seed and increase the storage area for bags of seed by one-third.

The market: Consolidation in the market has been rampant as independent seed dealers make decisions to sell their businesses due to personal, family reasons or the appeal of attractive financial offers made by much larger competitors. In addition, many of BFS’s customers have consolidated and RFS is now serving fewer than 100 farmers but selling more seed than any other time in their 80-year history. The average customer farms about 1,500 acres, typically one-half in corn and one-half in soybeans. Hogs are the primary livestock in the market area with a few dairies, poultry farms, and beef cattle operations.

Competition: The Burbank Family has a number of other firms selling seed in its market area. The toughest competition comes from Beck’s (a regional seed company with a strong presence in the area), the AgReliant brands, Monsanto, and DuPont Pioneer, while Syngenta and Dow AgroSciences (Mycogen) continue to fight to earn market share. The four multinational companies (Monsanto, DuPont Pioneer, Syngenta, and Dow AgroSciences) hold more than 50 percent of the global corn and soybean market share, so they have deep financial resources and are tough competitors. A challenge with the competition is their ability to market aggressively through national, regional, and local marketing campaigns. BFS simply does not have these resources. There are still a few other local seed companies selling in the area which pose as a challenge as well.

Buckeye Seeds, the strongest local competition, has been successful at marketing towards farmers who are driven by the desire to buy from a family-owned company. Despite having “family” in the Burbank Family Seeds name, this is not their focus. Instead the focus is on consistently, high-performing hybrids, and excellent customer service. Because of this, BFS is able to continue to appeal to the farmers looking for a family-owned seed company as well as the younger generation of farmer that is more concerned about performance.

The firm: Craig (36) is the younger of the two siblings and handles the “inside” jobs—waiting on customers, writing orders, ordering, monitoring the books, and so on. Julie (40) handles the firm’s operations—overseeing the seed cleaning, drying, and storage. Julie also handles all training for BFS’s outside selling effort. The firm uses three of their full-time personnel for sales. Most customer visits are viewed as problem solving and public relations—not really sales calls. They are active in the community, buying at least one market hog at local 4-H fairs when possible. They also recently added social media and are active on Facebook, Instagram, and Twitter. They have discussed offering their customers the option to receive text updates during the growing season but have not pursued this yet.

Of the other seven full-time employees, two are in charge of seed production (growing the corn and soybeans that will produce the seed), one is in charge of the seed cleaning equipment, one is in charge of seed drying and storage, one is a bookkeeper, and the other two are general warehouse employees/drivers. With exception of one warehouse employee who has been with BFS three years, all employees have been with the firm at least seven years. Julie and Craig also hire seasonal labor to help them through the Spring and Fall during peak growing, harvesting, and selling seasons.

The seed processing facility renovations should be completed by the end of 2016. The original facility was built in 1985 and was no longer sufficient in terms of size. The expansion will allow BFS to grow without concerns about renting storage space. For large customers, BFS does offer delivery services and has two trucks dedicated to delivering seed. The siblings anticipate the new facility operating at 75 percent capacity for the first few years with a goal of operating at 90 percent capacity by 2019.

The Burbank family started growing all of their own seed but due to land constraints as well as concerns regarding disease and not enough supply; they now work with five growers in the area to produce the seed. All of the growers they work with have been loyal to BFS. Both siblings are regularly contacted by other farmers in the area willing to grow seed corn or soybeans for BFS, but due to quality control and the importance of relationships, Julie and Craig have been hesitant to add additional growers.

Marketing: Quality and service are key components of BFS’s business philosophy. They focus their sales effort on developing new hybrids unique to the growing region and the challenges they face in the region of Ohio, Kentucky, and Indiana they serve. In 2014, they saw a sales growth of about 5 percent largely due to a more incentivized sales team as well as a more drought-tolerant hybrid variety that had proven itself in 2012 and 2013. The siblings have been very conservative about growth with a goal of 3 percent per year in order to maintain customer support and consistent quality.

Customer service is important to BFS and is delivered several ways. Each customer is treated like a member of the family regardless of the number of acres they grow. This way of doing business was started by Thomas and has been their unspoken motto for years, as it tends to increase customer loyalty and typically results in more acres over time. Quality seed is the key to the business and Julie and Craig will work with growers to replant if needed. Neither is an expert in precision agriculture or technology more generally, so they have considered hiring someone who is better trained in this area to work with their growers to provide additional support. However, so far this has not seemed to be a concern to many of their growers and so the investment hasn’t been made yet. Frank, the bookkeeper, maintains the website and supports their social media presence. While somewhat limited, the siblings and the sales team do use the internet and social media to connect with their customers—although both Craig and Julie believe there is more they could do with social media, especially with their younger growers. Frank also sends out a quarterly newsletter to many of their customers.

BFS is feeling the pressure of the national and regional brands, but because of their relatively low operating costs and their ability to continue to grow some each year, they have continued to be profitable. Rather than offer a volume discount program, they have a referral program and a loyalty program. Growers who refer someone to BFS who converts at least 25 percent of their acres to BFS earn a 2 percent discount. Growers who purchase at least the same quantity of seed for the following year also get a 2 percent discount—a program that has encouraged and rewarded loyalty. These discounts are advertised in the newsletter and on their website. Rather than hold farmer meetings, both Julie and Craig make it a priority to individually visit each of their growers each year. They have fond memories of going on these visits with their father and grandfather and believe in continuing this tradition.
Summary: Julie and Craig are passionate about continuing their family business. However, they are aware of the competition and know that many independent seed companies are no longer operating because of the pressure from national and regional brands. They are confident that the quality and customer service they provide has set them apart, but they wonder what position they should take in the market. What will they need to do to support this position? What steps are necessary for a thorough evaluation of their challenges/opportunities? How will they communicate the value their products and services provide to their customers? Clearly, Julie and Craig have many tough decisions to make as they look to the future.

1. What are the key opportunities and threats facing Burbank Family Seed (BFS) in the marketplace?
2. What are the key strengths and weaknesses of BFS?
3. Based on the limited information in the case, describe the firm's target market. In your opinion, does the firm have a good grasp of who their target market is and what this market wants from the firm?

Answer rating: 100% (QA)

1 Key Threats and Opportunities Possibilities The engagement and application of basic ideas as well as client satisfaction are the keys to BFSs success As global corporations continue to expand fierce ... View the full answer