Biologicals have promised before and failed to deliver: can supply chain solutions help?
The biologicals sector is regularly touted as one of the most exciting areas in ag, thanks to its promise of massively reducing – or even completely eliminating – synthetic ingredients. Amid falling venture capital investment in the industry, plant biotech, which includes biologicals, is one of the three sectors bucking the trend.
The biologicals market is experiencing significant growth, according to Nico Reinosos, SVP of global development at agtech and insights company INTENT. “Globally, it is estimated to be worth over $15 billion, with an impressive annual growth rate of 13.8%. This is in stark contrast to the traditional agrochemical market, which has a growth rate of 3.7%. The investment in biologicals is substantial and continues to increase every year.”
But we’ve been here before, and the failures in this space have so far exceeded the success stories.
What’s different this time? Scientific knowledge behind biologicals is rapidly advancing – but so are innovations in go-to-market strategies aimed at shortening the time of adoption of new technology products among the group using them – the farmers.
Take Solubio, the Brazilian provider of on-farm biological solutions. Solubio enables farmers to produce ag biologicals like biopesticides and biofertilisers on-site, reducing costs, it claims, by up to 70% compared to off-the-shelf products. Solubio achieved over 116% CAGR revenue growth from 2018-2022.
US-based DPH Biologicals is another company that develops and supplies innovative biological products, particularly biofertilisers and biostimulants, to improve soil health, plant growth, and crop yields for sustainable agriculture. To actualise the value of biologicals, believes Mick Messman, DPH Biologicals CEO, “we have to be able to scale and deliver it throughout the supply chain, fitting into farmers’ operations.”
Often, return on investment in agriculture has been measured by the cost to increase yield, he explained. “However, our customers see the longer-term value that biologicals deliver, such as improved soil and plant health, water use efficiency, reduced tillage, disease control, and improved plantability.
“Our view is that innovation in biologicals should be positioned not as an addition to, but as an integrated value within a grower’s normal practices, a manufacturer’s production process, an ag retailer’s product list and a food company’s market position.”
One problem with biologicals can be the sheer complexity of the sector, with what feels like a constantly 'moving target' of the latest innovations, leaving growers confused, overwhelmed and mistrustful. Does a supply chain solution do anything to solve that problem? “Biologicals have a place on every acre,” stated Messman. “But, to get there, we have to think strategically about how we bring products to the marketplace.
“For growers, it comes down to ROI and ease of use. We know they generally view biologicals favourably, but when they become ‘one-more-thing’ to research, understand how to use and require a farmer to make practice changes to adopt, that creates a high bar to overcome. For the large agribusinesses and retail distribution systems, it’s a matter of getting to ‘critical mass’ with biologicals, both the scale of availability as well as products that fit seamlessly into their distribution processes.
"Biologicals that require special handling, have short expiration dates limiting their sales windows and don’t play well with other inputs are fundamentally going to be at a disadvantage.”
In June, DPH launched a new Prime technology platform that uses a patented production process to accelerate the germination of Bacillus spores, a beneficial rhizobacterium. “Prime is a next-generation, step-change improvement in biological performance, but it still needs to be positioned within the marketplace in a way that is accessible and creates value,” Messman said.
“For instance, our first Prime-enabled product launch is Envelix Prime, a biological nutrient enhancer designed to uniformly cover bulk dry fertiliser, delivering biology and fertility in a single application. Envelix Prime is a way to differentiate and increase the value of fertiliser blends while delivering a better-performing product that’s delivered exactly the same way growers are used to. That’s a supply chain solution.”
What’s in it for the ag retailers?
Meanwhile, many biologicals are positioned to replace the tried-and-true synthetic and chemistry solutions ag retailers traditionally have used to make their margins. So, what's in a biological supply chain solution for them?
Messman believes that agriculture needs a more balanced approach to crop protection. There are plenty of opportunities for a ‘better together’ solution with biologicals and chemistry working together.
For instance, biological crop protection products like DPH’s biological fungicide is useful within an integrated pest management approach to disease control, working with traditional crop protection products for better control while lowering the risk of pesticide resistance. Envelix Prime, meanwhile, is designed to maximise and differentiate the value of fertiliser blends while providing more accessible fertility to growers.
These types of biological solutions, he said, equate to new margin opportunities for retailers, while offering growers the agronomic value they are looking for. However, these solutions must demonstrate functionality, show ROI, and integrate seamlessly into existing practices and distribution systems.
“That’s the mission DPH Bio was founded on, attracting, developing and scaling biological products that fit into existing agriculture systems, building value while increasing the sustainability and resiliency of agriculture to meet the needs of farmers and consumers.”
The importance of including farmers in the development of new sustainability initiatives
INTENT works with companies to ensure that new products and solutions both meet the needs of farmers, and also hold up in the real world.
Biologicals can indeed hold up in the real world and bring tangible benefits, Reinosos said, but it's crucial to collaborate closely with farmers to understand the drivers of adoption in the field. “By partnering with farmers and validating solutions across millions of acres, we ensure that these initiatives are practical, effective, and make a real difference on the ground."
For example, the potential benefits of biologicals in agriculture are significant, but it's important to communicate these benefits effectively, especially to those outside the agricultural sector, he stresses. “Biologicals, such as bacteria, fungi, and protozoa, are often misunderstood by those unfamiliar with agriculture, who may mistakenly associate them with health risks. Effective communication is key to addressing these misconceptions, and food companies play a crucial role in bridging the gap between growers and consumers.”
But biologicals are not a quick fix
From an agronomic perspective, meanwhile, one of the main risks is the challenge of adapting to new products that operate over the medium to long term. “Unlike agrochemicals, biologicals interact with the existing ecosystem in complex ways, and their value proposition needs to be measured differently. Traditional trial protocols and impact measurement methods need to be redefined to accurately assess the benefits of biologicals.
"The benefits of biologicals are clear in terms of their effectiveness, particularly over the medium term. For instance, biofertilisers may not directly increase yield but can enhance variables that contribute to yield, such as improving nitrogen availability in plants. The actual yield improvement will depend on the plant's genetics and its ability to utilise the available nutrients."
Culturally, therefore, the challenge lies in demonstrating the value of biologicals to an agriculture sector accustomed to quick results from agrochemical applications. But replacing agrochemicals with biologicals, Reinosos stressed, can reduce biodiversity damage and greenhouse gas emissions, provided they are used as replacements rather than additions to current practices.
"By working closely with farmers and validating these solutions in the field, we can ensure that biologicals are practical, effective, and beneficial for sustainable and regenerative agriculture.”
Fragmentation is another challenge. For farmers to fully benefit from biologicals, it's essential that universities, NGOs, research institutions, and private field trial companies serve as neutral sources of insights, Reinosos believes. “They can guide farmers on the best practices for application, timing, and conditions to maximise benefits.
“Biologicals offer solutions to current issues like resistance, as well as broader environmental benefits. Increased collaboration and sharing of insights among various stakeholders would be beneficial, helping to identify the most effective solutions and best practices."
Opportunity to exchange best practices globally
Regulation is, unsurprisingly, another challenge. Only Brazil, which implemented a fast track for non-GMO biologicals a few years ago, which has helped speed up the approval process, stands out as a market where regulatory processes have been accelerated to align better with market needs.
Another important aspect to consider is the varying adoption of biological products across different countries, Reinosos revealed. “This highlights the need for exchanging best practices globally. It's crucial to identify who should facilitate this knowledge transfer and ensure that local agriculture doesn't bear all the costs of discoveries that have already been studied elsewhere on the same crops.
“Additionally, it's noteworthy that large agrochemical and fertiliser companies are increasingly acquiring mid-tier companies and start-ups specialising in biologicals. This trend, along with the launch of numerous sustainability programmes by major corporations, indicates that the field of biologicals is not only growing but also shaping the future of agriculture. This area is here to stay and will play a significant role in the sustainable agriculture of the future.”
Bioprospecting on the rise
Finally, bioprospecting is another new technology that hopes to offer crop protection, growth promotion, and soil health improvement.
DARWIN Bioprospecting, for example, specialises in bioprospecting, which involves exploring and discovering novel microorganisms from various environments for industrial or biomedical applications. One application is developing microbial solutions offering plant growth-promoting rhizobacteria (PGPR), plant growth-promoting yeasts (PGPR) and biocontrol agents against plant pathogens.
“We can develop both pre- and postharvest microbial based biologicals including biofungicides, biopesticides, PGPR and PGPY,” said marketing and strategy director, Daniel Ramón Calvo.
“We are a B2B bioprospecting company. We hunt microbes all around the world. We isolate them, we characterise them, and we proceed with in vitro and field trials to demonstrate their performance and efficacy against concrete agricultural needs. Then, we co-develop finished form products with agricultural companies.”
One of the main challenges is regulation, particularly in the EU, for the Spain-based company, he said.
“Another challenge is the effective knowledge and innovation transfer from lab to field. In our case, being a bioprospecting company, we enlarge this concept even more and we echo the need of properly transferring knowledge from nature to field. We think that all stakeholders should look into the same direction and enable disruptive innovations to come along at the same pace of regulation changes.”
Challenges aside, farmers are becoming more aware on the benefits of the use of biologicals, he said, “particularly those containing microorganisms, as they echo the importance of soil microbiome”.
And thanks to bioprospecting, meanwhile, we could witness healthier crops with better stress resistance allowing for foods and ingredients with functional properties and better nutritional content and organoleptic qualities. It could lead to longer lasting fresh produce as per longer shelf life. And could also facilitate better cost structures and bigger earnings for farmer, he said.
“With advanced bioprospecting, we can better select the top microorganisms within a huge diversity and origin that will allow the development of more effective biologicals. Moreover, we love nature meeting science and science meeting agriculture. Traditional agriculture has been a little bit away from scientific and biotech approaches and now this is changing."
