Bee Vectoring Technologies (BEE) – There’s A Real Buzz Around This Biological Story
Interview with Ashish Malik, CEO of Bee Vectoring Technologies (TSX-V: BEE)
Article courtesy of: cruxinvestor.com
Published: Thursday June 4, 2020
‘Ensure your crop yield is always thriving and manage disease and pests with our completely natural innovative solution.’
The solution? Not fertiliser, not pesticides… bees and biologicals. It’s a niche space, with a 2018 market size of c. US$8B, but it’s a story that is really fascinating.
Bee Vectoring Technologies calls itself a ‘leading technology company’. It utilises commercially-reared bees with the aim to deliver effective and sustainable crop control for the agricultural industry. The company is in the biologicals space, that is to say environmentally friendly treatment of argicultural crops.
Worker bees have long been utilised in the pollination of large swaths of crops, such as the almonds growers in California. Now BVT wants to harness them to protect and enhance crops is more efficient and ecologically sound manner.
Matthew Gordon interviews Ashish Malik, June 4, 2020
Bees walk through a biological power, which is harmless to them. Having coated their feet and legs with whichever specific biological mix the farmer requires for his crop, the bees then go directly to the flowers and plants. With convention spraying application, much of the product is sprayed into the soil and wasted. It is also very time-consuming and requires heavy and expensive farm machinery. As a consequence, Bee Vectoring Technologies has demonstrated that it can achieve the same effects on a 1-acre field of strawberries using just 1% of the active ingredients used in a conventional spray program. It is also environmentally cleaner and safer. And not only are crops protected from mould, infections and harmful insects, but the bees can also deliver plant nutrients to help the plant grow and increase productivity. So lots of cost saving and increased revenue messages for the farmer.
Malik regards Bee Vectoring Technologies’ system as a major agricultural innovation. The company claims it can provide the foundation for ‘comprehensive, stackable and highly targeted pest and disease management solutions.’ It’s a clever business model, which relies on harnessing the power of nature’s most renowned workers. Any consumer would be happy to see a decrease in the use of chemicals, and Bee Vectoring Technologies appears to be able to help growers improve crop quality with less of the nasties. The aim of the game in agriculture is increased productivity from less land, but without harmful side-affects.
The idea of using bee vectoring originated in academic studies around 20-years ago. Bee Vectoring Technologies was founded in 2012 and listed in 2015. Its bee vectoring plans spawned at the University of Guelph in Ontario. It has taken the company until recently to figure out a means to apply the technology on a commercial scale rather than an R&D academic perspective. It is internationally user friendly for farmers. Last Summer, Bee Vectoring Technologies received environmental regulatory approval. The company now aims to push on to monetise this technology.
Malik’s track record extends 18-years within the agricultural inputs industry. He is a trained engineer but made a shift towards thinking about food, its legacy, and how best to feed future generations. Bee Vectoring Technologies sits within the biological industry by definition. A new wave of biological solutions has swept through the agricultural industry in recent years such as plant extracts, microorganisms, bacteria, and fungi. These products have now proven they are capable of being deployed commercially as a sustainable alternative to chemicals.
The real barrier for Bee Vectoring Technologies appears to be awareness. I was not aware of bee vectoring as an agricultural solution before this interview, and I imagine many other investors are in the same boat. The pesticide space is c. US$60B, but the use of biological products is increasing at 15% pa on a compounded basis, while the use of chemicals is flat. It’s an upwards journey, and now the technology appears to have become as efficacious as chemicals, so farmers will not be losing out by applying them.
Bee Vectoring Technologies is monetised through a “whole network of distributors and retailers” that a farmer can buy in. BVT must operate within that infrastructure, but what is unique is its new delivery system. Bee Vectoring Technologies is using bees to deliver products to the crops, so farmers need to be educated on how to use and manage beehives. As a consequence, the company has a sales presence and can deliver directly. Over time, the company will source business partners to help it, but for now, it appears the company is not reliant on distributors.
The real barrier appears to be breaking down established, stubborn agricultural conventions. Farmers need to be enlightened to the efficiency of Bee Vectoring Technologies’ solution. Bees are already actively used for pollination in greenhouse production in Europe, so the company is already operating under an established infrastructure. The company just needs to get the supply chain sorted, similar to most new fertiliser companies.
Bee Vectoring Technologies will not be profitable for another few years and has been raising money via private placements. This year, the company has been aiming at strategic investors for long-term funding. COVID-19 has disrupted these conversations, but Malik expects to re-engage with these companies in the Summer. He wants to build up his company to be strong and independent, but will be open to being taken out at some point in the future; it is not currently an objective.
The green credentials are there and it is hard to not to like the thought of worker bees going about their business. The big question for BVT is the speed of take up. Sales cycles are long. This is new delivery mechanism and requires a lot of moving parts to come together. I want to like this badly, but suspect this is about doing good and not making money at this stage.
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