The $240 Billion Agriculture Biologicals Market and the Rising Company at the Forefront

Articles
Posted on October 31, 2019

The $240 Billion Agriculture Biologicals Market and the Rising Company at the Forefront


Omri Wallach, Stockhouse
Published: Thursday, October 31, 2019

“Large” market opportunities come and go. Sometimes you miss the boat, and other times the boat doesn’t arrive to dock. When the opportunity is not part of a trend but a movement that has already started seeing success, “large” can very quickly scale to “massive.”

That looks to be the case for Bee Vectoring Technologies International Inc. (TSX-V:BEEOTC:BEVVFForum). In our Part 1 look at the agritech company, we looked at how it’s uniquely positioned as a first-of-its-kind solutions provider for farmers that’s already making waves. With its technology tried and tested and support from partners, growers, and the media, Bee Vectoring Technologies (BVT) is now squarely in the commercialization phase.

BVT gets its name from bee vectoring, its radical new farming technology that replaces pesticide use with beneficial microbes transported directly be bees. The Company’s portfolio includes a proprietary system that works with commercial hives, the patented VectoriteTM powder which holds the beneficial microbes, and the biological CR-7, which recently secured EPA approval.

Just last week, the Company signed its first commercial grower deal since CR-7 got regulatory approval. The deal sees top-tier Florida strawberry grower Sizemore Farms implement BVT’s proprietary bee vectoring system and Vectorite with CR-7 on their 62-acre organic strawberry crop for this season, and the grower is considering expanding the deal to cover part of the 600+ acres of conventional strawberry crop for the next season.

Image via Bee Vectoring Technologies.

And BVT’s hot streak continued again this week. The Company announced it had secured further EPA approval for CR-7, this time in the case of a residue tolerance exemption. It establishes that crops don’t need to be tested for residual CR-7 because the biological is safe for humans, and is an exemption that the majority of crop protection products on the market fail to achieve. Without the need for residual testing, growers save significant time to market and don’t face the risk of products being rejected post-harvest (as they might with many pesticides).  

Stockhouse Editorial recently spoke with BVT’s CEO Ashish Malik and Chairman Michael Collinson about the agritech company’s recent string of successes and what’s next for the market at large. Since the initial wave of success, Malik said that the Company has already solicited interest from many different potential partners, and they’re looking for more.

“What’s happening is that we have a really interesting technology that’s now commercially being launched. What that has done within the industry is create a level of interest and excitement such that we’re talking to around 15 different companies right now. They range from distribution and go-to-market deals to other products we could license and deliver through our bees, or even R&D partnerships. Right now, we are a legitimate player within a huge industry, so we’re going to be able to accelerate our business and potentially find new investment partners because of that.”

With each positive step, BVT comes closer to realizing its massive market potential, and it still has a lot of room to grow. Previously we discussed BVT looking at a US $20 billion market opportunity, but the massive scalability of this unique company sees it potentially reaching the entire US $240 billion market for chemical and biological agricultural inputs.

That’s because each pillar of the business has multiple paths for growth. The most clear-cut case is sales growth in crops with already proven benefits, including strawberries, blueberries, apples, tomatoes, sunflowers, and canola. Every successful trial and grower deal motivates additional farmers to look at the technology and consider it for their farms, especially considering the importance of increased yields in the hypercompetitive agriculture field.

But keen investors know that even in existing operations, the Company has multiple new paths to explore. BVT’s technology is comprised of three different parts: the delivery system, the Vectorite powder, and the EPA-approved biological CR-7. While the most common solution is for growers to bundle the whole package, each has the potential to be licensed individually. Indeed, BVT’s management is already exploring options to market CR-7 for additional delivery systems and gauging interest in using Vectorite to deliver other biologicals.

Image via Bee Vectoring Technologies.

And as BVT’s products can expand their reach, so too can the Company expand its product base. Buoyed by the success of CR-7, further research is being done on new biological development that would be beneficial in new areas. Additionally, CEO Malik told Stockhouse Editorial that the Company is constantly testing the efficacy of CR-7 on new crops, including potentially looking at cannabis in the future.

The good news for BVT’s product development is that one of its biologicals has already secured EPA approval, and in an entirely new category of item. Each subsequent application will likely see a dramatically reduced timeframe, and with experience in getting approval, the Company knows how to approach future applications.

Perhaps the biggest avenue for BVT’s growth, however, is the global market. EPA approval is tough to acquire, but once a company leaps over that hurdle, securing approval from other regulatory agencies becomes much easier.

Currently the bulk of BVT’s partnerships and regulatory approval are in the US, which it focused on specifically to establish a solid base. With the first approval out of the way, the Company has greatly expanded its horizons, targeting expansions into Mexico, Canada, and the EU over the next few years.

Image via Bee Vectoring Technologies.

It might seem like the BVT story is too good to be true. How is it that BVT is looking at a such a clear path to market and has attracted so much attention from farmers and investors? Simply put, the Company is playing in a critical market at a crucial time. Far from chasing a fashionable investment trend that comes and goes, the agricultural transition to biologicals is happening across the globe.

Biologicals are a major part of the current agricultural revolution that follows in the footsteps of previous innovations every few decades. From fertilizers to pesticides to GMOs and data-driven farming, each has been a vital step in keeping agricultural yields in line with global demand.  

The current situation, however, is growing increasingly dire. An exploding population and decreasing amount of arable land has put a lot of pressure on food and hunger. In the United Nations list of Sustainable Development Goals, eliminating hunger is #2 in importance behind poverty (climate change is #13 in comparison).

In his interview with Stockhouse Editorial, CEO Malik highlighted the importance of biologicals, and by virtue BVT, in the equation. As the agricultural world has moved away from potentially harmful chemicals and looked to increase yields, the Company’s technology has fit perfectly into the trend.

“When you do the math, we basically have to find a way to double productivity on every farm acre of land over the next 30 years. That’s not us saying it, the United Nations and world leaders are saying it.

Over the last 10 or 15 years, the use of biologicals is something which has really exploded and is continuing to explode. People recognize that we want the farmers to stop using chemicals, and BVT is very much a part of this trend. We now understand the microbiome in the soil in and around the plant, to the point where we can actually develop products that have beneficial properties, and that’s where BVT is. We have a biological and we have access to other biologicals because of our strategic partnerships.”

Image via Bee Vectoring Technologies.

By itself, the prospect of a 25% increase in yields is enough to motivate a grower to consider a technology. When you factor in a competitive market, restricted spaces, and government incentive to solve food shortages, the growing trend of biologicals in agriculture makes a lot of sense.

Likewise, the massive US $240 billion market for agricultural inputs might seem like an overstatement until you consider just how many factors there are. Crops, biologicals, delivery systems… each facet of the agriculture industry is multiplied on a global scale that is hard to comprehend for new investors.

BVT’s management has been quick to recognize the immense reality of the market. It’s what gives the Company’s technology the support of the sector, its farmers, and consumers, while also providing massive scalability. In his interview with Stockhouse Editorial, CEO Malik

“The market is huge. You have needs for farmers in every country in the world, and everybody is finding a way to increase productivity and doing it in a safe, environmentally responsible way. The entire ecosystem of the use of biologicals on farms is in the order of a quarter of a trillion dollars. Within that space, the opportunity for BVT is around US $20 billion. We’re not talking about a US $10 billion fashion statement here, we know that biologicals and the trend for biologicals over pesticides are happening.”

FULL DISCLOSURE: This is a paid article produced by Stockhouse Publishing.