Hi, I'm Jim Gordon, and you're watching Market One Minute. Joining us is Colin Bletsky. He's the COO and Director of MustGrow Biologics. And joining us for the first time is Ralf Glaubitz. He's the Head of Crop Protection Product Team, Biologicals at Bayer AG. Colin, welcome back, and as I mentioned, Ralf, welcome for the first time.
Thanks for having me again, Jim.
Thank you. Welcome, Jim.
Okay, Colin, I'm going to start with you, and let's start at the 30,000-foot level. How big is this global biological agricultural opportunity today, and why is this moment becoming a real commercial category rather than just a niche?
Today, Jim, if you look at the global market, it is growing, and it has been growing for the past roughly 2-3 decades. Currently, they're expecting it to be in that $20 billion mark, growing at a mid-teens CAGR over the next roughly 5-8 years. But it relatively is still quite small. I'll let Ralf go into it a bit more as he's got a lot of experience on this side, especially on that global ag chem and marketplace. But if you think of the global $380 billion marketplace for chemicals, fertilizers, biologicals altogether, it is still relatively small but growing. In my experience as a farmer myself, being with MustGrow, a small company, we do see a tremendous opportunity in the space.
Ralf, your thoughts?
Yeah, thank you for this question in the first place. I would maybe add here, what we currently see is that consumers on the one-hand side are increasingly care more about how their food is being produced. That's at least what we see from a business context, but also when talking to family and friends. Farmers on the other-hand side, they are responding by actively seeking and adopting more solutions. That leads to that the biological industry and also biological options are available and growing tremendously. I can confirm that market research, some of the numbers that Colin has alluded to. When it maybe more comes to our biological portfolio, which is already quite extensive and varied, this is not more than biologicals and microbials beforehand. It also includes pheromones, plant extracts, botanicals, synthetic biology, and many, many more.
Colin, back to you. From MustGrow's side, as a smaller innovator operating in such a large market, where do you see the biggest opportunity, and what does it take for a company your size to compete in it?
Yeah. I would say the largest opportunity, as Ralf said, is really satisfying that consumer demand about being maybe a little bit more health conscious, looking at different alternatives. But looking at a company as ours to be able to compete, it comes down to the science. We have to have a product that works. I think the last time we talked, Jim, I am a farmer. I need something that works on my farm, and synthetic chemistries, fertilizers have done that for the past 30, 40, 50 decades, and they've worked. Where I see a lot of opportunity as an organization like ours is to work with companies like Bayer in this space, really understanding the science, really driving it to a farm gate level where farmers have great options to be able to put these biologicals in. It's no longer snake oils.
They're no longer products that don't work. They're products that have a true fit. I think for a company like us, it's with working with groups like Bayer to really understand the science, to really prove it to farmers, but it's also having a baseline great product. That's where I believe with MustGrow that we have that product with both TerraMG and TerraSante to go into these markets and really work with companies to show the farmer that value, and that's the key point.
Ralf, let's talk about the partnership in the regions. Why did this partnership begin in Europe, the Middle East, and Africa specifically, and not North America or another region?
Yeah, let me maybe start here with giving a little bit of a broader context, and I would distinguish between the global potential and also some regional drivers. First of all, for biologicals, we do see very strong global opportunities across all regions. But Europe, in particular, is important to us because of its increasingly stringent regulatory environment, and there are fewer chemical crop protection products available for European farmers. We do see further restrictions, for example, also on synthetic fertilizer. This is driving, especially European farmers, to adopt new technologies. For us, biologicals in general create new opportunities and possibilities for growers that simply didn't exist beforehand. Europe, and especially the high-value fruits and veg segment, is a high priority in our Bayer strategy.
Nematodes, they cause severe crop losses and damages in both yield on the one-hand side and also quality in many, many crops, but particular in the fruits and veg segment. TerraMG as a product aligns here very, very well with the growing demand for effective biological alternatives.
Colin, you want to add something there?
I do not know if I need to. Ralf answered it very clearly and very well. I would say for us at MustGrow, the why with Europe, Middle East, and Africa, being a small organization, we do not have the experience. We do not have the sales and the research and regulatory people on the ground. So working with Bayer to really penetrate that region, which is extremely important, and moving in that space, was a key driver for us to look at those areas. In North America, I would say it is close to home. It is an area we have expertise, an area we are working already, and it is an area that MustGrow can drive and help initially take that start on. But in Europe, we did not have any of that expertise, and that is where Bayer came in and really has taken it and ran with it.
Ralf, Europe's regulatory environment is shifting quickly. We have got the EU Green Deal, the Farm to Fork Strategy, and active debate right now over synthetic pesticide reapprovals. How does that regulatory backdrop shape the opportunity for MustGrow's TerraMG in the region?
Building on what I have said earlier, biologicals have a significant role to play in the future of farming. They can address so many challenges that are relevant to agriculture today and also tomorrow. They address topics such as registration, regulation, but also residues, resistance management, and climate change. This is important, particularly important to growers in Europe, as I said, because they need more options to manage their unpredictable conditions, protect their crop potential, and optimize performance as well. However, also here, innovation must reach the field at scale, you could say, and also in an economically viable way. Therefore, science-based approval processes and an innovation-friendly regulation are foundational.
From MustGrow's perspective, what makes the EMEA a distinct market from North America in terms of grower needs, crop mix, and registration pathways?
Building on what Ralf said, if you look at the EMEA, the growers are very similar. A farmer wants to produce a top-quality product, the highest yield possible. In that sense, farmers around the world, is a farmer, is a farmer, is a farmer. Whether you're in Europe, whether you're in the U.S., or whether you're in Middle East, Africa, or even into Asia. But I think the unique difference from the North American market to Europe is, as Ralf mentioned, is the regulatory pathway and the consumer demand, consumer pushing on right now for more green biologicals. I would say the biggest difference between the two markets is just the absolute need and the current limitation and restrictions going forward on the synthetic chemistry, synthetic fertilizers in that region.
Ralf, explain the milestone achievement announced on August 21st. What work was completed to check the box, and what did your evaluations suggest about MustGrow's technology?
Let me bring here a broader context. Actually, it was a key technical milestone that we had achieved together to validate, on the one hand side, the product handling and the formulation, and on the other hand side, the biological performance or biological efficacy for the strategically important market. When we look at the handling and the formulation part first, the objective was to confirm that TerraMG formulation is compatible with European farming practices and the standard application equipment. All the studies that we concluded and conducted demonstrated that TerraMG can be handled and applied very effectively in ensuring a satisfactory user experience for our farmers here. For the biological performance or biological efficacy on the other hand side, we were assessing under real field conditions, the field efficacy, especially, again, soil-borne diseases, as one important performance attribute.
All the results that we have concluded confirmed that TerraMG delivers meaningful disease control under real field conditions.
Anything to add, Colin?
Jim, the main thing for us is having an organization like Bayer scrutinize and go through and work with a product. You're always going to have some failures along the way, but it's working together and looking towards solving those challenges. I think for us, it's really around the performance of the technology. It's not a small molecule chemistry. It comes from nature. It is going to be a little bit more challenging to handle, but working together and providing the right recommendation, I think is key. The product works. We know it can go through field conditions now. We know it's working on real-life farm-level trials, and that's something that's key. Having Bayer put their stamp of approval behind it is very key for us. We like to say a feather in our cap. It's something we're very proud of.
Ralf, Bayer signed a commercial agreement with MustGrow back in December 2023. Prior to that, Bayer had nearly a two-year exclusive evaluation and testing period. What did the evaluation involve, and what was so enticing that it validated MustGrow's technology and led to this commercial partnership?
Well, indeed. This comes down to fundamentally two main elements. First of all, Bayer is an innovation company, and therefore we do have a data-driven and a science-based approach. Hence we do a lot of testing and generating data for ourselves in order to get a better understanding of the technology, get a better understanding of the product. By the way, this is not only what we are doing for biologicals, but for all the technology platforms that we are operating in. Let me be a bit more specific here. First of all, we do a lot of greenhouse and laboratory testing, followed by bringing the technology into the field to really see the performance under real-world, real field conditions, and get the validation that the product works and performs.
But we also wanted to get a better understanding of a regulatory assessment that we did with internal, but also with external expert to get an idea what's the feasibility or what's the likelihood or registrability in the key markets, specifically here in the European Union. And we also wanted to assess what is the intellectual property and our freedom to operate situation here to get an understanding of what the performance and also the commercialization potential and opportunity is overall. However, in a more broader context, let me maybe add here. We believe that good collaborations are based on a joint vision, shared values, and everybody working towards the same goal. Also working together and having a mutual education and dialogue to march towards the same goal is very important for us.
Therefore, during the testing period, the almost two years, we worked very closely together with Colin's team and the MustGrow organization. We got to know each other way better, and that led into the partnership with MustGrow.
Colin, from MustGrow's perspective, what was the company looking for in an international commercial partner, and what have you observed with respect to Bayer's level of engagement and involvement in the development work that led to this important milestone?
As I mentioned before, Jim, it is really about scope, scale, understanding, and the ability to take a product from that testing all the way through to commercialization. For us, being a small organization, we were not able to do that within the European Union, within Middle East or Africa, and Bayer was able to provide that and is providing that. On respect to the engagement, I have always said this, and I think in every video, every talk I have ever done, we are extremely happy with the partnership. As any partnership, it is kind of like a marriage. Sometimes you have spats and you have to work through those challenges, but it is about having the like-minded individuals and that same goal. I think that is, Ralf Glaubitz explained it very clearly is we have to work together and work through those things first.
There is always going to be things you have to work through, but it is having this shared common goal, a shared common objective, and it is having the like-minded individuals. We could not be happier. Bayer has been a tremendous partner. They put a tremendous amount of work and effort into this, and in combination, I think we are very well down that pathway. As MustGrow, we are very happy with how things have gone so far.
Colin, how has Bayer's expertise sped up MustGrow's international commercial development, and what does Bayer specifically bring to the table?
As Ralf mentioned, every single product that you put into an agricultural space is heavily scrutinized, not only by farmers, but also by regulatory bodies and really the entire public. What Bayer has brought is really a lot of the science, a lot of the field testing, a lot of the regulatory work for that region specifically. It is taking what we knew at MustGrow, taking what we have done, and really driving it into that region. As a small organization, like I said, I farm, I have a farm background. I have been with many different organizations. Nobody from large organization to small farmers believes a small company's data. We need to prove it. We need to continually prove our technology across many different regions, many different soil types, with many different farmers.
Bayer has that expertise on how to do so, and they are really helping us drive that in areas. On speeding it up, I would say without Bayer, likely we would not be in that region to date, and we would be extending these regulatory pathways and commercial development significantly further. For us, it adds tremendous value.
Let's get some closing thoughts in the few seconds we have left. Ralf, we will start with you.
Thank you, Jim. Honestly, I truly value conversations like this one here today, because they show that biologicals are no longer a niche segment or niche products. They are actually becoming key elements in the agricultural input market. Thank you for the great exchange that we had, and let me highlight maybe a couple of key points here in closing. We strongly believe growers need more options to manage the uncertainties on their fields, protect the crop potential, and also meet the rising expectations for more responsible food systems. Furthermore, I would say biologicals, the way we see it, are an essential complementary technology in the entire toolkit available for farmers. Biologicals complement technologies like seeds, traits, chemistry, digital tools, in order to bring new solutions to farmers globally around the world.
We are convinced that the market will advance through partnerships and collaborations, combining specialist expertise with, for example, our capabilities to scale the impact from thousands of growers to millions of growers. In other words, I strongly believe biologicals are becoming essential, giving farmers the strong crop solution toolkit they need to meet rising consumer expectations and an increasingly stringent regulatory requirement. Last but not least, let me say I would like to thank sincerely, Colin, you, your team, the entire MustGrow team for your partnership. Thank you very much.
Well said, Ralf. Final word goes to you, Colin.
Yeah, first off, Ralf, thank you as well. Like I said, we're extremely happy and impressed with the team at Bayer and how things are moving forward. I can echo everything Ralf said based on the opportunity with biologicals, based on everything. Coming back to it more at a farm gate and looking at my own farm and what I've seen is not one product is going to be a silver bullet. TerraMG is a great product, but it's not going to work on its own. We need to be able to work in a true integrated pest management strategy with other chemistries, with seed, with the fertilizers, with everything to bring that right solution to farmer.
I think that's a key thing is looking at biologicals, looking at the opportunity, looking how you can take what nature's given us to really complement what's out there right now. I do think we will get there more on penetration side, on use side with growers, but also looking at how do we integrate this biological TerraMG plus other biologicals that can have a great effect. I'm going to say this again, Bayer brings that entire system. If you look at their knowledge, if you look at the opportunity, the understanding, the science-driven background, I can't thank them enough for that. How we're moving forward in the European Union and Africa, Middle East, we wouldn't have got there without Bayer as MustGrow.
Gentlemen, thank you for the time today and the great conversation. It is Colin Bletsky from MustGrow Biologics and Ralf Glaubitz from Bayer AG, or as he is saying where he is, Bayer AG, just so there is no confusion. Thank you both and congratulations on the success, and we wish you the best moving forward.
Thanks, Jim.
Thanks, Jim.