27. November 2019
Ag.supply co-founder Sebastian Schauff in the interview
The online company is considered the Amazon of agriculture
The online company ag.supply was referred to as the Amazon in the AgTech business. How does a founder see the startup scene in Germany? Because what has been going on for a long time in other industries is rather unusual for farmers: buying working materials online is not exactly everyday business between barn and field. The market for agricultural companies has not yet been influenced by the boom of the online giants – despite years of wild forecasts that warned of a digital threat. Even in 2019, the purchase and sale of agricultural products and inputs often still require complex, close personal relationships between farmers and suppliers that go back decades.
By Sarah Liebigt
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Farm & Food: Mr Schauff, thank you very much for the interview. Ag.supply was recently referred to as the ‘Amazon in AgTech’. What do you think of this title?
Sebastian Schauff: That was a bit surprising, but that’s something our customers do. When I explain that we have an online shop with the and the items, the customer says after a short time, ‘Ah, so you are a kind of Amazon for farmers.’ That’s ok on one hand, that’s a very challenging comparison. On the other hand, we can do a few more things. For example, we also do consulting, which is something Amazon of course can’t do.
Traditionally, agricultural trade enjoys a deep trust in agriculture. Is the image of the representative, who has known his farmers personally for years or decades, still relevant?
This is an interesting question, we discussed it at the last Farm & Food with some agricultural machinery dealers, the industry and some farmers. I think everything has its justification. There are various functions between the manufacturer and the farmer. These functions, such as distribution, advice, financing and logistics, must be covered. There is a niche for everyone.
But, of course, there is a new generation of farmers who are digital natives; who are online affine, and obviously agricultural machinery trade and land trade are not doing enough for them, and that gives companies like us the opportunity to enter the market.
What do you answer customers or potential customers who ask about catalogues and personal home?
In fact, that’s what they’re asking. We regularly conduct customer surveys to find out what customers want. As a result, we have now printed our first catalogue, with over 1000 products (out of three million, e.n.): If the customer wants it, the customer gets it. But that’s just a trigger for the customer to get online. Usually customers who don’t belong to the younger generation ask for something like a catalogue, but then they end up shopping online.
So there is a migration from analogue to digital.
Exactly, you have to take the customer with you. Of course, we don’t just target the youngest customer group, but are open to everyone.
In a nutshell: Why should a farmer use ag.supply?
That is and remains the farmer’s decision, but it depends largely on what his natural shopping route looks like. When he buys privately online, he often does the same on his job.
By using Ag.Supply, farmers save time and money in many areas. Convenience also plays a role: 35 percent of our users shop via mobile devices, i.e. they sit on the tractor or on the sofa and do their shopping whenever they want.
When people buy clothes, they buy a sweater in two sizes and send one back. How does ag.supply deal with this?
We notice that our customers are very well informed. We have very few returns. We are very happy with that, because that was exactly what we were worried about. It always depends a bit on the manufacturers: Do they provide enough information, etc.?
Of the returns we have, about one third are due to errors on the supplier side, one third are due to mistakes made by us and one third by the customer. All in all, the figures are so low that this is not relevant for us.
What must happen in Germany to better promote young companies in Germany, which formats, which networks do they need?
If you look at the startup ecosystem for AgTech, you have to say that it is not well developed in Germany. For research and development, there are some good funding programmes that help startups. But there is more to it, such as infrastructure: agricultural startups are often located in rural areas. If the basics are not there, glass fibre, 5G etc., it is very difficult to compensate.
The second thing that startups need is good employees. So, it is important to network with the universities.
The third thing is finances. Germany is still standing on shaky grounds here. VC is there, but with little focus on AgTech. Companies often have no experience with CVC. We are far behind France or the USA, for example.
What do you expect from Farm & Food? Who do you want to meet?
From the experience of recent years it is always a very colourful mixture. You meet industry, decision-makers and farmers who are very open and very critical. That’s a good mix. I hope to see many new and many familiar faces. Farm & Food has become an industry meeting, you’ll meet the people who are interested in the digital future.
