Taking his soil science and ag economics diploma to the largest distributor of farm equipment in the Midwest (Lindsay Brothers) in the 1970s, Mike Irish was on the front line of proving — and introducing to dealers — numerous pioneering developments in shortline equipment. He joined Brillion Farm Machinery as marketing manager in 1990 and today leads the company as general manager.
‘State of the Brillion’
“We concentrate our products for the dairy farmer and middle sized operations, with seedbed preparation and planting of hay and alfalfa an area we specialize in. Those products also carry over into specialized vegetable markets, such as peas, beets, sweet corn and potatoes. We also offer tillage products to the corn/soybean producer.
“We also go after the turf and landscape market with our seeders. We added an entry in the sportsman market with the food plot and wildlife seeders.
“Our real differentiator is our expertise and knowledge of farming, primarily in growing hay, alfalfa and some of the specialty crops. Through our expertise on the zone-till side and getting deeply involved in soil chemistry, soil structure and plant physiology, we have a better understanding of what it takes to grow a crop than most manufacturers. We’ve always based our design on the work by the late agronomist Don Schriefer. So, we don’t weld iron and pull it through the field. All of our tools are designed to improve soil structure and prepare a proper seedbed.
“We’re profitable and have been all year long. We’re continuing to invest in R&D and new products. We’ve expanded the size of our engineer ing department and plan to expand it further.
“In the last two years, we added the LandCommander III which is the third generation of that machine. The Soil Builder II was introduced in 2008, and we introduced the Folding Soil Builder II and food plot seeder in 2009. A number of new features and options were also added to the pulverizers and grass seeders.”
Varied Distribution by Region
“Basically in our key areas, which are primarily the upper Midwest and New York, we have direct territory men calling on the dealers. From those regions out, we have manufacturer reps or distributors that act as reps for us. And then on the West Coast, all of Canada and New England, we have distributors that warehouse products and parts.
“In the areas we use territory managers and reps, we have 400 dealers. Counting those served by distributors, our dealers total about 800. It’s been fairly steady;
Brillion Farm Machinery
Location: Brillion, Wis.
Employees: 66 employees
Product segments: Primary and secondary tillage, seedbed preparation and planting equipment
we’ve been around for so long that we have dealers in the markets that most of our products are sold into. The goal going forward is to strengthen our relationship with those dealers and provide additional product mix for their markets.”
Niche Equals Focus
“We don’t compete head to head with Case, Deere or AGCO. We are selective about niche markets and build products for those specific markets.
“We want to concentrate on the niche products that we do extremely well and provide a greater profit margin for the dealers. For example, if the formula calls for sales of 500 units or more per year before a major will enter a market, we look at those areas where we wouldn’t face a battle of attrition.
“We plan to stay with the niche markets because they’re more profitable. The role of the majors is to build the large equipment that they can manufacture in high volumes. That’s not the role of the shortliner. Shortliners must be innovative and work in the niches if they want to survive against the majors.
“While you never say never in terms of areas we wouldn’t go into, a limiting factor is the extremely large equipment that we currently don’t have the facilities for — things like 60-foot plus field cultivators, chisel plows and 45-foot finishers.
“There’s definitely a place in the market for the smaller manufacturer, but you must choose wisely the segments in which you can make the product profitably. It’s knowing your market, being flexible and having the resources to address the changes in those markets.
“A risk is that as farm operations get larger and trend toward very large equipment, it will become more difficult to compete against the majors and very large shortline manufacturers.”
Adding Products Gives Staying Power
“Dealers want to do business with fewer manufacturers and simplify their life. So if they can work with a manufacturer that provides new products in several different markets, they’re more likely to continuing to work with that manufacturer vs. taking on another line and manufacturer.
“In nearly all of our niches, we’re adding new features and making equipment larger. Because we have products that the majors don’t make available to their dealers, we have a better chance of staying at a dealership. That’s a better position than a company that makes tillage tools and competes directly against the majors and who might be a target of their actions.”
“Our philosophy is to be flexible and stay on top of the market. Communications with the field and our reps are important. We have conference calls every 2 weeks with all the TMs so we can stay informed as to what’s going on everywhere.
“Improving communication is the main thing we’re working on now. As part of the process, we’re totally redoing our website, which should be up and running in early May.
“The vast majority of our retail customers are getting their information from web sites. We’ve found that the typical farmer gets his information off the web site, narrows it down to 2-3 competitive models he likes and then goes and actually kicks the tires on those units or has them demonstrated. That’s why the web site should be the main driver of that business to the dealer. So a web site that’s user-friendly and contains necessary information to make a decision is very important.
“Phase 1 of the site will be the sales and marketing part and Phase 2 will be the dealer section where they can enter orders, look up service bulletins, file warranty claims and all those things. And then Phase 3 will be the key information for the producer, positioning Brillion as an expert source of information in our niche markets.
“As business slowed in 2009, we used our resources to work on the content, like our service manager putting together all the service bulletins and information online and adding the most commonly asked questions. Engineering spends time on their portions as well. So we’ve used this time to compile all the information that we’re going to put into the web site once all the templates are designed and the routing is completed.”
‘We Need to Create the Demand’
“Dealer purity isn’t so much of a problem for our business, except in the corn and soybean areas where the dealer doesn’t need to offer a lot of product diversity. The bigger issue is dealer consolidation where a lot of the dealers that we’ve done business with for 30-40 years are now merged into one large operation and the personal communication is gone. Instead, you need to go through a couple tiers of decision makers before you can get to the owner again.
“When that rollup happens, most want to continue to keep Brillion because the brand has a good reputation and is a draw for them. The amount of time they have to promote the brand and products, however, is reduced because of the major’s emphasis on market share. So that forces us to basically create the demand for the market and drive customers to the dealers, hence the need for the market driven web site.
“When we hear that our line might be in jeopardy because of a rollup, we share with the new owners the sales history, both on wholegoods and repair parts and our niche player role. And if they’ve been a good dealer for a long time, they have a large customer base that is looking for repair parts. ‘Do you want to send 300 customers down the road to get repair parts at a competing dealership?’ A lot of the demand still comes from the producer going into the dealership who says, ‘I bought my equipment here, I’d like to buy repair parts here and I’d like to buy my next model here.’ ”
Alternative Distribution Concepts
“In terms of alternative distribution models, I’ll say that some of our best dealers are shortline-only dealers. In fact, in 2007 two of our top three dealers were shortline-only dealers. So there’s a huge opportunity for that type of operation.
“There will definitely be growth in shortline-only dealerships. It’s a good opportunity for a dealer that’s been cancelled or an independent businessman who wants to run his own business the way he wants to run it — without anybody setting the business model for him.
“We’ll see growth in this model because the majors all want the dealers to concentrate on their business and their own manufactured products and purchased products (such as a Frontier). But in most cases, those purchased products are not providing the best or most innovative equipment. Therefore, plenty of opportunities are out there for innovative companies to provide the end-user with the best products.
“In a lot of cases, dealers who might consider a shortline-only business have the knowledge, the financial ability and an existing facility. So it’s a way to reduce their overhead significantly and improve their profit margins.
“Other than that, if dealer purity continues, the only way for a manufacturer to get his product to the end user would be with its own store or several manufacturers forming an alliance and putting together a store. But the problem you have is when you get into those areas that concentrate only on a few crops — like corn, soybeans or wheat — you just don’t have a diverse-enough customer base for anything but tractors, combines, big planters and big tillage tools.
“But in the more diverse markets like dairy, there’s a much broader product mix with a much greater demand for a variety of products. That’s where I see a lot of these shortline- only operations starting up, and they’ll have business year-round as opposed to just in the spring and fall.
“In some of the markets outside of ag that we’re in, like landscape and turf, some manufacturers have already gone factory-direct to the end-user. But in ag equipment, there’s almost always a trade-in involved; it’s never just a straight-cash deal. There’s setup and service required, which is very difficult without the dealer. Some may try to develop a business over the web site and sell direct to the end user.”
“Three years from now, you’ll find our product mix will be similar, but we’ll have some larger versions with additional features. With the plans for our web site, we’ll become more of a source of expertise and information for the end-user. We plan on expanding the engineering department again so we can stay on top of the rapidly changing market, and it will change dramatically in the next 3 years as new technology from the seed companies is released into the market.
“A lot of the growth areas being talked about will create additional opportunities for our dealers because those changes fit our product mix so well. An example is the trend toward small seeds being put down at smaller rates. Plus some of the transition of farm demographics around the country — like moving dairy herds from California into the Midwest, High Plains or Northwest — all might create a need for additional feed for dairies in those areas.
“And we’re also seeing increased sales in the export market as another opportunity, primarily to the Middle East. They’re looking to expand their dairy operations and provide milk for their population, so we’re seeing an expansion of the need for good quality forage in those areas.”
BONUS COVERAGE from Farm Equipment:
Military Terms Heard Around Brillion
Mike Irish, a U.S. Army veteran and student of military history, used a number of military terms during his interview.
The War of Attrition. “That means I’m not going to send my 5,000 men against your 50,000 men. Over time the larger forces are going to win. The winners have always been those that have been freer thinkers and more nimble and have better intelligence. So if you have those things, a small army can beat a large army in battle. But you need to realize that you can still lose the war of attrition, which influences your strategy.”
The Battle is Won Before it Starts. “First comes planning, logistics and then execution of the plan. But the plan is only good until the first shot is fired. After that, you need to be nimble and adjust on the go.”
Keep Your Friends Close and Your Enemies Closer. “We must constantly gather intelligence about the markets, what your competitors are doing in those markets, and where the opportunities are emerging. And then, be willing and able to move when the opportunity presents itself.”
An example, says Irish, is the food plot seeder launched last year. “We recognized a product void, investigated it and did the market research. We developed relationships with the people selling the seed for the food plots and got their input as to what the end-user wanted, and what works and what doesn’t. It’s been well received and is already recognized as one of the best food plot units out there.”
Accuride’s Ownership of Brillion Farm Machinery
Brillion Farm Equipment is a division of Accuride Corp., one of the largest and most diversified manufacturers and suppliers of commercial vehicle components in North America with 2008 revenues of $931 million. Brillion Farm Machinery has been corporate-owned since the 1970s, when it was first purchased by Beatrice Food Co., the first of five corporate parents. The Brillion Farm Equipment Division is a business unit within the Brillion Iron Works, an iron foundry. The Farm Equipment Division operates in its own 110,000 square foot facility on property adjacent to the foundry.
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