Gaucho gets a newfound focus in India and China

Regulatory and market situations are creating excellent opportunities for Gaucho in APAC’s two largest economies, with new ways identified to bring its benefits closer to more customers.

In APAC, Gaucho is nothing new – it has been on the market for 25 years in India, and nearly 20 in China. But that doesn’t mean the Gaucho story is over, or there won’t be new developments with the brand. On the contrary: Gaucho could be entering a prosperous new chapter in both countries.

Let’s explore the current situation and what the future holds:

In India, Gaucho is seen as an “old stalwart” of the Bayer insecticide portfolio. As a result, perhaps it didn’t get the attention it deserved for a while. But not anymore: in the last two years it has returned to center stage.

Saurabh Fadia, Brand Growth Manager – SGR, PGR & CPE, outlines the current situation: “The market for seed treatments is expanding. In the last two seasons, stakeholders identified it as a growing category, and projected that it will grow much faster than before – maybe 20-30% CAGR. As a result, many companies are focusing on seed treatments. Things are moving quickly!”

What is driving this market-wide growth? A combination of public-sector support and changing farmer attitudes. The government is making efforts to double farmers’ income, and to make India self-sufficient in oilseed rape (OSR), cotton and pulses, so it is running a special price support scheme to incentivize farmers to invest in them. That’s good news for Gaucho, which is an important insect protection solution for all those crops.

At the same time, seed quality is a major limiting factor in OSR and pulses. Most farmers use seeds saved from the previous harvest, which tend to have a lower germination rate than hybrids. Amid this backdrop, the benefits of Gaucho compared to untreated seeds soon became apparent.

“During my market visits, many farmers came forward and shared their good experiences with Gaucho. They were able to reduce their seeding rate slightly, because with Gaucho, their success rate goes up,” says Saurabh. “We’ve been reaching out to smallholder farmers at scale to communicate this. Running field days and visits after germination of the treated crop works well, because that’s when the evidence is clear. Seeing is believing!”

To summarize: regulations are supportive, farmers are ready to upgrade, and the whole market has identified seed treatment as a growth pillar. That’s a hugely conducive environment for SeedGrowth, and especially Gaucho. This has reignited excitement in the SeedGrowth India team, which is embracing a new business model supported by machinery services: on-loan treaters, provided to a local community (for no cost) for a few days at a time, so every local farmer can use the treater before it moves on.

“The challenge is reaching everyone quickly enough,” says Saurabh. “When the rainy season comes, every farmer will be sowing rapidly. They don’t know when the next rain will be, so they can’t wait. So we have a short window of opportunity, and many farmers to reach! Currently, we are strategizing with target markets and target geographies, and in the longer term we want to scale up our fleet of machines into the hundreds.

“This is where we are with Gaucho currently. The SeedGrowth business has momentum, the brand has momentum, and the team has a renewed belief in it. We are flying the flag for SeedGrowth and Gaucho in the country!”

Gaucho was launched in China in cotton in 2005, and was soon extended to corn, peanut, wheat and rice. There have been several success stories in the meantime, but also a unique challenge: unlike other major Gaucho territories, there is a lot of competition from generics in China. “There are over 100 manufacturers of seed treatments in China! Most of them operate on a local level. They don’t compete on recipe quality, but they do on cost. That’s why we say it is a very competitive landscape here,” says Jingping Guo, Business Development Head in China.

That means Gaucho’s reach has been limited in the past – but that could be about to change. China recently approved GM corn with a Bt trait package that gives inherent resistance against a spectrum of common pests, and this is expected to achieve significant market penetration in the coming decade. “Corn seed is the highest-value seed in China. But corn yields in China are far lower than what you get in the US. Opening up GM corn creates a good chance for production to grow,” explains Chao Ma, SeedGrowth Business Lead.

“We expect that the market will become more reliant on premium products, since farmers want to protect their investment in their GM seeds. At the same time, there’s still the need for Gaucho. Pests like corn borer and fall armyworm will be controlled by the Bt traits, but other pest populations may increase – especially aphid, which Gaucho is the most effective solution against.

“Both these factors should create demand for Gaucho. It should be a leading product for us in future.”

The business model in corn has historically been selling to seed companies, who treat their seeds before they reach farmers. But China is a smallholder-dominated market, and selling to farmers to treat their seeds on-farm is a real possibility. That could be achieved by selling Gaucho as part of integrated packages, along with fungicide and fertilizer solutions. SeedGrowth China also plans to introduce other products to fill portfolio gaps and engage the mid-tier of the market, not just the premium segment.

Whatever happens, Jingping Guo confirms that one thing won’t change: “Gaucho will remain valuable to us. We really see it as the number one product!”