There are three categories of biologicals, including biopesticides, which are used for crop protection and are EPA-registered; biostimulants, which are used for crop health; and biofertilizers, which are used for crop nutrition. Biostimulants and biofertilizers are state controlled.
Marrone Bio’s product portfolio includes six EPA-registered biopesticides and one biostimulant.
In addition to being environmentally friendly, and improving crop quality and yields, biologicals prevent pest resistance unlike traditional chemicals. Biologicals also do not produce residues, which facilitates their access to export markets.
According to Dr. Marrone, development of biologicals can reach market in some four years, compared with more than 11 years for chemicals. The EPA also grants expedited registration for biologicals. That significantly lowers development costs to less than $10-million for biologicals, compared with nearly $300-million for chemicals, she adds.
Industry surveys peg biopesticides as holding only 5% of the total crop protection market, representing significant room for growth, Dr. Marrone points out. The biopesticide market is growing at a compound annual growth rate of 17.4%, compared with about 2% in the chemical pesticide market.
“Cannabis growers have been beating down our door,” she suggests, as state legislatures continue to approve recreational use of cannabis. In a study conducted by University of California at Davis, the market for biopesticides in the cannabis industry is estimated to grow from $91-million in 2016 to $1.4-billion in 2021 in California, Oregon, Washington and Colorado, alone.
Marrone Bio’s products are used across all production systems and integrated pest management programs for growers of organic and conventional crops, and those for export markets.
Citing higher returns of investment for growers, she says the company’s Regalia biofungicide has achieved a $1,400 per acre increase in terms of size and weight of strawberries; an increase of 1,000 pounds per acre for rice growers, also with Regalia; an increase in six bushels per acre for corn; and a 10-pound per acre increase for potatoes, including a better grade, with its Majestene bionematicide.
Marrone Bio’s product portfolio also includes Grandevo, the first broad spectrum microbial insecticide in 50 years; Venerate, a new species of insecticidal bacteria, with novel compounds as potent as the best chemicals; Haven, an extract of coconut oil, is designed to reduce sun and water stress on crops, increasing yields and quality; and Stargus, a new strain of Bacillus amyloliquefaciens discovered by MBI, which also controls pathogenic soil fungi.
Marrone Bio’s Zequanox was discovered by the State of New York and is the industry’s only biological solution for invasive mussels in pipes and lakes. “This is highly effective and selective product but is not in our core market, so we are finalizing an agreement with a large water treatment company to distribute it for us,” Dr. Marrone says.
“Our competitive advantage is taking in-house and in-licensed discoveries quickly to the market and testing and screening the broadest range of targets,” Dr. Marrone contends.
“Our products stand out because we are a natural product chemistry company (versus just living microbes), just like the pharmaceutical companies that develop drugs from microbes and plant extracts,” she adds. “We optimize that chemistry in manufacturing so every batch has a specific level of the marker compounds that we know are important for efficacy.”
The global biopesticides market is forecast to reach $8.8-billion by 2022, compared with $3.4-billion in 2016. Since Marrone Bio’s products are also used in conventional farming, the current market opportunity for its products exceeds $30-billion.
In 2012, Marrone Bio purchased a manufacturing plant in Bangor, MI to reduce its reliance on contract manufacturers of its microbes. The company spent nearly $15-million to retrofit the plant.
According to Dr. Marrone, the plant is generating better margins, costs controls and return on investment. It also provides flexible and faster scale-up, and additional control of IP, which includes a portfolio of more than 400 issued and pending patents.
The Marrone Michigan Manufacturing plant currently produces Regalia, Grandevo and Zequanox, with plans to add production of Venerate and Majestene. Planned future additions at the plant include packaging and granulation (on-line in November), larger fermentation tanks and full-scale drying for granules.
For the first half of 2017, product shipments grew 51% to $12.1-million, compared with $8.1-million in the first half a year ago.
In North America, Marrone Bio sells its products through established national and regional distributors, with its sales and technical services specialists conducting on-farm demonstrations of its products to facilitate demand.
Dr. Marrone says that in international markets, where Syngenta distributes the company’s Regalia under a legacy agreement, the company now is working with four regional companies – Nufarm, Jocanima, Disagro, Kenya Biologics and Elephant Vert – to distribute its new products.
“We are focusing our international efforts on countries where we can get fast registration to generate revenue, such has the Philippines, Korea, Mexico and Central America.”
In Europe, she says there is no current fast track for approval of biologicals, even through the EU has eliminated the use of many traditional chemicals in farming, making product registration a lengthy and costly process.