NEWS MAKERS: Retired...Not!

He’s busy with clients, traveling to a major industry conference and bemoaning the fact that he’s not playing golf or fishing as much as he’d like.

Apparently, Liles never looked up the word “retirement” in a dictionary. Probably didn’t have time.

For nearly 30 years, Liles has been a fixture in the turf chemical market. He led the team that brought the old Ciba-Geigy organization from agriculture to specialty and changed business cards several times as the company swallowed up smaller fish to become Novartis (now Syngenta).

He “retired” from that business and became the first executive director of Prokoz, a cooperative formed by a group of independent turf distributors who were looking to match the buying power of national distributors like the old Lesco and UHS organizations.

Next, he “retired” from that job to help bring Arysta LifeSciences into the U.S. turf and ornamental market.

He recently “retired” from Arysta and is now – at long last – on his own, running a business consulting company and free to speak his mind about the state of the market, the changes he’s seen along the way and what he expects in the future.

How did you get into this crazy business?
I was like a lot of North Carolina kids who grew up on tobacco farms and decided college (at North Carolina State) looked pretty good compared to farming. I wanted to follow in my dad’s footsteps and be an ag educator, but at the time – believe it or not – ag salespeople were in high demand. I worked part-time in a men’s clothing store, and discovered I loved selling and was pretty good at it. A guy would come in to buy a necktie and leave with a new suit, a couple of shirts, three ties and a pair of shoes.

So, I went to work for Ralston-Purina right out of school. A few years later Ciba introduced Atrazine and it was the hottest thing around. So I went to work for them and eventually became a product manager. By ’81, we had the registration on subdue and wanted to introduce it into turf. The problem was we didn’t know anything about the market. No one in our group had any turf background. We made some really stupid mistakes, but we learned from them and eventually built a pretty nice business.

Talk about what’s changed over three decades.
First, there are more products – lots more products. The turf manager now has 50 instead of 10 product choices in most categories. The chemistry’s better too. Lower dosages, highly customized programs, better formulations and better packaging. Burning used to be a huge issue and you hardly ever hear about it anymore.

Second, of course, is consolidation. There were about 20 basic manufacturers 20 years ago and now it’s down to six or seven in the U.S., depending on how you count. It’s good in some respects because bigger companies have stronger infrastructure, but it does minimize competition.

Then there’s the “G” word – generics. There’s no question they are a viable alternatives in the marketplace. If the company backs it up and the research supports it, it’s legitimate. It’s just like Advil. I don’t know about you, but I buy whatever Ibuprofen they’re selling at Walgreens or wherever because I can trust it. The good part is that it brings down cost. The bad part is that it makes companies a lot more cautious about how they spend R&D dollars. Because of patent expiration, they probably only have 10 years of exclusivity after seven years of bring a new product to the market. So anything new has to have a high enough profit margin for a decade to recoup the investment.

Finally, there’s a lot more regulation. We’re under attack by environmental groups more than ever. With the advent of the Internet, any blogger is an instant expert; you might not know a thing, but you can tell people not to use pesticides. Politicians won’t take a stand on it, so we have to fight our own battles.

What did you learn about the turf market that was different from ag?
Ag is a high volume/low margin proposition and service is focused at the dealer level, which is highly consolidated. It’s relatively low risk from a sales standpoint. Turf is low volume, high service and high risk. You can’t make recommendation mistakes and you can’t misrepresent your product. If you make a mistake, people lose jobs, you lose customers and you lose credibility. Precision is mandatory.
Everyone thinks that turf profit margins are higher than ag, but that’s not necessarily true in the long run. The margins are higher, initially. An ag product might make 40 percent (margin) and the same product in turf might initially make 60 percent. But then you start figuring out the costs – formulations, research, better-trained sales people, packaging, tight regulations in urban markets and so on. I think the margins might be about the same in the long run – and they aren’t that great overall.

What predictions do you have for the turf market in the next five years?
More regulations, higher costs and less R&D. There’ll certainly be more generics. It’s forcing the manufacturers to constantly examine whether they can maintain the level of service everyone’s used to. The industry will eventually find a balance between branded and generic by weighing cost against service.

What things does the average turf manager usually not understand about the supply chain in our market?
Anybody in the specialty market – lawn, golf, aquatics, roadside, etc. – will face more regulations. Special interests are not going to back off.  And they have the ear of Congress. They’re going to expect their distributors and the manufacturers to fight those battles for them, but that won’t be easy unless the customer is truly supporting them.

They need to support their distributor. That’s their chief contact with the manufacturer. You can go direct, but the manufacturer is not going to know you and your business the same way. Your local rep knows you, the market and your needs. They understand the products you need to succeed. Bypassing them is a huge risk. Distributors can make mistakes – they can misdiagnose, make a bad recommendation, etc. – but the risk of that is very minimal compared to the potential for problems when you buy direct. The channel is critical.

The manufacturer’s job is to support the distributor and the reps. It’s actually very economical compared to some markets (such as agriculture) that have three or even four steps.

If you could jump in a time machine and go back 20 years, what would you have invested in?
I would have bought land! [Laughs.] That never goes bad.

Other than that, I wouldn’t have changed much. I’ve always worked with really good people. Good people mean good support and a lot of accomplishment. I’ve been really blessed. From the LCO level, to the distributors, to the colleagues I’ve worked with – they’ve been great. I made mistakes, but they weren’t consequential in the scheme of things. It was a good run.

Tell us about what you’re doing now.
I started a T&O consulting business for distributors and manufacturers in July. I’m working with a few companies and growing. I enjoy tackling problems and trying to help people fix things. I’m going to do this, play a lot more golf and do a lot more fishing. That’s my vision. Hey, I’m on a budget now, so fishing is like paying the bills: Gotta fill the freezer and feed the family!

Final thoughts?
People working in this business need to remember how blessed they are. This is a great business because of the relationships, the ethics, and the professionalism overall. To get paid to do this is unbelievable. It’s serious business, but by the same token it’s a lot of fun. Don’t take yourself too seriously. Every job is job, but if you’re not having fun, don’t do it.