January 9, 2015

By Shahnaz Mahmud

Biopesticides are poised for high growth as consumers, food processors, retailers and regulatory bodies in the food and agriculture sector are increasingly demanding no – or the bare-minimum of – residue left by pesticides.

“Global Markets for Biopesticides”, a report released last June by BCC Research projected that the global biopesticide and synthetic pesticide market would grow from $54.8 billion in 2013 to nearly $61.8 billion by 2014, and to $83.7 billion by 2019 at a five-year compound annual growth rate (CAGR) of 6.3%, from 2014 through 2019.

Key Drivers and Advantages

To grasp the key drivers and advantages of biopesticides, it is beneficial to understand just exactly what they are. The United States Environmental Protection Agency (USEPA) defines them as “certain types of pesticides derived from such natural materials as animals, plants, bacteria, and certain minerals”. The USEPA places them in three separate classes. The first is microbial pesticides, which consist of a microorganism, such as a bacterium, fungus, virus or protozoan, as the active ingredient. This type of pesticide can control different types of pests. The second is Plant-Incorporated-Protectants (PIPs), which are pesticidal substances that plants produce from genetic material that has been added to the plant. The third is biochemical pesticides, which are naturally occurring substances that control pests by non-toxic mechanisms.

According to the BCC research, increase interest in the use of biopesticides is attributed to greater environmental awareness, the pollution potential and health hazards from many conventional pesticides, and more widespread global demand for organically-grown food. Some main advantages of their use is that they are less toxic than conventional pesticides, typically only affect the target pest and only require a small dose, often decomposing quickly.

Big Investments Encourages New Developments

With increasing understanding of the importance of biopesticides, big companies have entered into the agriculture biopesticides arena. Seed Central data says that between 2012 and 2013, several multinational companies made acquisitions, investments and created partnerships to capitalize on the growing sector. Bayer, for instance, acquired AgraQuest, BASF purchased Becker Underwood, Monsanto acquired multiple RNAi providers, Syngenta signed a deal to commercialize Taegro and American Vanguard invested in TyraTech Natural Product Technologies.

This type of activity is encouraging new developments across industry, according to Bill Stoneman, Executive Director of the Biopesticide Industry Alliance (BPIA) in an article in Fresh Plaza. “We had about 50 members at the time of the first acquisition, AgraQuest, and now we have about 80 members,” Stoneman said. “There’s also been growth at the start-up level that has been stimulated by investments from big companies, such as the creation of BioConsortia in Davis, California.”

That growth is seeing many new startups cropping up seeking to create new technologies, spurring the sector on. That translates into more investments pouring into biopesticides.

Marrone Bio Innovations, a West Coast startup that launched production in a new manufacturing facility in Bangor, Michigan, is an example of this. It focuses on making biopesticides specifically for the agriculture sector. The company got $56 million in an IPO last August and plans to significantly boost capacity by 2016, according to an article in MiBiz.com. According to the Wall Street Journal, Marrone Bio Innovations was one of more than 30 biotech firms to go public in 2013.

“There is definitely investment looking to (put money into biopesticide startups),” said Pam Marrone, CEO of the company, in the MiBiz.com article. “There are not enough companies for the amount of money that is out there looking for opportunities. Anything that can help increase crop yields, make our water safer — all of these are things that are really hot with investors right now.”