Bacteria, yeasts and fungi have played a major role in agriculture and food and drink production for millennia. Discovery and development of the full potential of microorganisms, collectively known as the microbiome, is now a major focus for agricultural companies, large and small, established and startup.
Rhizobial inoculants, soil phosphate mobilizers such as Penicillium bilaii, fungal disease suppression by Bacillus subtilis, sprayable Bts (Bacillus thuringensis), and mycorrhizal inoculants to encourage healthy root systems, are the historical antecedents of recently established microbiome-based agricultural product development pipelines. Future valuations of these new ag-microbiome markets run into the many billions of dollars globally. Even beyond this calculaton, there are many long-term benefits to microbiome approaches, including soil health management and sustainability, that are more difficult to quantify in terms of financial value.
Commercial opportunities identified through basic research never arise without product development challenges, and for microbiome related products there are a host of these. Consistent field performance is of prime importance, especially because in the early days of “biologicals,” variation in year-to-year performance gave this sector an unwanted and unwarranted label as “snake oil.” Microbiome products have moved well beyond this, but historical perception and ingnorances of modern technological advancements remain a marketing problem that needs to be addressed. Preferably this will be accomplished with a carefully focused program of customer identification and education based on hard data.
The critical need for multi-year, multi-location performance data is driven by the well-known interaction between plant genetics and environmental variation, year-to-year and location-to-location. Commercial plant breeders refer to this as GxE (genotype by environment interaction). A simple example of GxE is the fact that one particular corn hybrid will not be the best yielding across different years and locations. Now add another variable, the genetics and phenotype of the live biological product, and you have another level of complexity, referred to as GxExP (plant genotype by environment by microbial phenotype interaction) by one leading company. This complexity can only be managed by careful consideration of product placement based on statistically robust field data that must stretch across several years and as many locations as possible. Only the most advanced and well managed of the microbiome focused start-ups seem to be aware of this.
This GxExP problem is also very relevant to the “consortium” approach, in which the product is not just a single microbiological strain, but a population of microbes designed to provide a particular crop benefit or benefits. Does the consortium approach provide a buffer to the effects of GxExP, or does it exacerbate the problem? And are certain microbes antagonistic in combination with one another? Only comprehensive field data can answer that.
Other challenges include fermentation scale-up and economics, and ag-chem compatibility. For example, is viability of the biological product compromised by co-formulation with an existing chemical product? Shelf life of the formulated product, a well-defined mode of action for product registration (or just registration as a growth stimulant?), and careful consideration of application methods (seed treatment, in furrow, spray, drench, etc.) are also critical. There are other unique requirements of a live biological product that are not generally associated with the development of commercially successful ag-chemistry.
What does all this boil down to? Excellence in R&D without clear knowledge of market targets and their financial size, the economics of production for biological products, distribution systems, and the cost of negotiating regulatory pathways, is a recipe for scientific success and commercial failure. The most promising entrepreneurial companies currently involved in microbiome product development are carefully focused on these “post R&D” functions. Predictably, many such companies are spinouts from the work of leading academic researchers, or have licenses to critical patent portfolios built up by university research foundations.
Just as a teaser, did you know that there is a microorganism out there that has two distinct and separate photosynthetic mechanisms, can fix nitrogen, and degrade heavy metals? What might the economic opportunities be for a company developing such an organism as a commercial product? This is only one example from the global microbiome, of which far less than 1% has been discovered and characterized. For a startup company the trick is obviously to identify market needs and match those with microbial strains or mixtures that will satisfy real economic opportunities.
Investment and R&D activities around agricultural microbiome products have been ramping up rapidly and will undoubtedly grow over the next decade. This will inevitably lead to consolidation within the sector, similar to what has happened in the seed industry, but with a timeline about 20 years later and compressed into a much shorter period. This will inevitably lead to a shake out, with only those companies surviving that can successfully address the challenges laid out above. The most likely survivors will offer a diverse product array, based on internal proprietary technology augmented by mergers and acquisitions. It is going to be an interesting time.