Bayer Cropscience joins biologics boom

Tight controls on pesticide residues prompted German chemical and seed company Bayer Cropscience to expand its horizons this year, acquiring U.S.-based biologics business AgraQuest for close to US$500 million in August. The move heralds a new era for agriculture with organic options taken more seriously in crop protection solutions. At www.freshfruitportal.com, we speak with Bayer’s biologics division head Marcus Meadows-Smith about the “quantum leap” this transition has meant.

When Meadows-Smith was CEO of AgraQuest he had a limited sales team at his disposal to support the company’s 30% annual growth rate, but his possibilities have expanded under the Bayer brand.

Marcus Meadows-Smith

“The interesting thing was AgraQuest had 20 sales and marketing people. Now with Bayer we have 7,400 sales and marketing people, so our reach, our ability to communicate with the grower about the benefits, and our ability to give growers access to these tools, has had a quantum leap,” he says.

“A lot of growers, to be honest, weren’t exposed to our product or if they were they were somewhat skeptical.

“I think now they’re going to be able to enter a dialogue, hear from their local Bayer representative, get the technical information, so they understand what the products are and how to use them in spray programs to allow them to manage residues.”

Fermenting bacteria, fomenting change

The executive says the biologics movement’s key driver is consumer awareness about chemical residues on food, which in turn has led to supermarkets taking stronger stands on residue management than the regulatory requirements.

In Europe there has also been a move to limit the amount of chemicals growers can use, cutting out rotation options and helping diseases develop resistance to the sprays in use. These circumstances are forcing growers to look at alternative options, and that’s what the company aims to do through what it refers to as “integrated solutions”.

Meadows-Smith says Bayer’s biologics products are made through fermentation, similar to the process of making wine, beer or yogurt, but with less art and more science. As they are made from naturally occurring microorganisms, biologics are indistinguishable from other bacteria, leaving no detectable impact on the environment.

Aside from the residue-free benefits this implies, he also points to the advantages of lower farm re-entry and re-harvest intervals.

“Because of the nature of the product, you can go back into the field four hours after its been sprayed, so if a grower gets a rush order from Walmart, Tesco or Marks & Spencer, even if they’ve sprayed in the morning they can go in and handpick the fruit and veg and be able to fill that order.

“Many of the synthetic products have two week re-entry intervals, or two-week re-harvest intervals. It’s that flexibility in use that’s also key.”

Bridging the gap

Meadows-Smith says the big shift for biologics has been in reducing the cost and productivity gap compared to conventional sprays.

“When biologics were first launched 20 to 30 years ago, they were often lower efficacy, inconsistent, could only be used in certain circumstances.

“Today, the new generation of products we are launching have a lot more science behind them, and therefore we’ve been able to improve the efficacy, the cost efficacy, reduce the costs of goods and improve the consistency in the sprayability, so they’re now much more similar to a conventional crop protection chemistry.

“This has been done by taking many of the tools that were developed for the pharmaceutical industry – today more than 50% of new drugs actually come from a biologic source – and the big progressions that have been made have been around studying the genomics of the bacteria, understanding fermentation, and how to optimize them while they’re in the fermentation tanks.”

Land vs. population

For Bayer, the expansion into the category is not just about on residue requirements at a buyer level but the associated environmental impacts.

“When I talk about sustainability the important thing is we have to get maximum yield off every acre, because if we reduce the productivity of agriculture, it means in some other part of the world we have to chop down rainforest or go onto natural land that isn’t yet arable land,” he says.

“As the population grows, agriculture needs to be more and more productive on the existing acres; if not we start eating into more and more of the rainforests, and other natural areas around the world.”

Biologics boom

He is unable to forecast projections for biologics at Bayer itself, but highlights the sector as a whole could grow by around 160% in the next eight years.

“Today the industry for biologics is US$1.5 billion out of a US$40 billion synthetic market. Projections are by 2020 there will be more than US$4 billion in biologics sold.

“There will be some growth in the conventional market, but obviously the share is going up all the time, because the biologics market has been growing at 10% per annum historically, and the synthetic market about 2%.

“The likelihood is with the movement of regulators and the movement within retailers in the food value chain, the projections are that it will be an important tool within the growers’ tool kit.”

Operations

Bayer’s Biologics HQ is in Davis, California, with its major manufacturing  plant in Tlaxcala, Mexico. The company has fermentation sites around the world, as well as field stations in all the world’s “key geographies”.

In terms of the Southern Hemisphere, Meadows says Bayer’s biologics business is growing “very fast” in New Zealand due to the country’s keen focus on residues, while the business has also launched in South Africa and Brazil with its product Serenade.

He adds the Chilean grape industry in particular has been very receptive to biologic products.

“For all of these countries there are big commercial impacts, as well as solving problems for local pests and local growers.”

www.freshfruitportal.com