Organizations dedicated to biological products are excited about the opportunities for growth despite disruptions in a post-pandemic world. By Dan Jacobs | Senior Editor, AgriBusiness Global
Have a discussion with someone who works in the biologicals segment, and you might feel like you’re talking with a kid who just learned he was being taken to Disneyworld. The enthusiasm is genuine and, it seems, with good reason.
“It's an emerging market; it still has only 5% or less of the global market share,” says Nicolás Cock Duque, President of BioProtection Global, a worldwide federation of biocontrol and biopesticides industry associations.
The optimism, however, comes from the growth the market has seen for nearly 10 years — and expectations these associations have for the next couple of decades.
“The growth has been very significant; it's two digits for the past five to 10 years and it's forecasted to continue growing rapidly,” Cock Duque says, sharing expectations of a compound annual growth rate between 18% and 20%. He says he believes biological products could comprise 50% of the crop inputs market by 2040.
That optimism is the same when looking more specifically at the U.S.
“I would have to say that the current state of the biological market is vibrant and dynamic,” says Keith Jones, Executive Director of the Biological Products Industry Alliance (BPIA). “Despite all the challenges of last year, our membership is continuing to grow. BPIA ended 2020 with more member companies than ever before, and we expect to do that again this year. This is all a reflection of the steady growth and interest in the biologicals market. While many industries are contracting, the biologicals market continues to expand. Even conservative sources project that the current global biologicals market of around $6 billion annually will more than double that by 2025.”
Jennifer Lewis, Executive Director, International Biocontrol Manufacturers Association (IBMA), says the market segment has seen growth in nearly all countries around the world.
As encouraging as that sounds, not all areas of the world are embracing these products equally. According to Jones, there are two regions comprising the bulk of the market.
While there is still room for growth in both of those markets, there is a third that shows exceptional promise.
“Latin America, which is only about 15% of the global market for biological products today, is the fastest growing area for these products, so companies have a great deal of interest in that region,” Jones says. “There are several reasons for this rapid growth in Latin America. The climate and the types of crops grown there are well suited for biological products. Also, growers in Latin America have demonstrated a greater willingness to adopt all sorts of green and sustainable technologies including biological products.”
Consumer and regulatory issues are drivers as well.
“Key drivers for the market in the U.S. and in Europe include consumer demand, consumer consciousness — what they eat and the type of food they want. They're concerned about residues and their health,” Cock Duque says. “And in other parts of the world, it's also driven by farmers looking for alternatives to manage resistance issues.”
In addition to finding alternatives to traditional pesticides, growers who export their crops to Europe must manage the regions’ maximum residue levels (MRLs) criteria. That requires them to limit the amount of pesticides they use or adjust the timing.
Depending on how these products are viewed, the regulatory environment can either help or hinder the introduction of biological products into a market. The U.S., for example, has a fast-track for biological products separate from the synthetic route that can take a decade or more to traverse. That’s not the case everywhere.
“In Europe the regulatory process limits opportunities and delays market entry for biologicals that control pests,” Lewis says. Although, in the case of the biostimulant subsection that’s not the case, she adds.
“There are several factors that continue to drive and grow the biological market. First, we keep seeing more and more government policies around the world intended to encourage sustainability and specifically sustainable growing practices,” Jones explains. “Many of these policies are conducive for the adoption of biological products like biopesticides, biofertilizers, and biostimulants. Second, there is growing consumer demand for quality and year-round production of sustainably grown, practically residue-free produce. Biological products are one of the keys to satisfying this growing consumer demand. Third, growers themselves are looking for reliable products to reduce residues, deal with pests developing resistance, to promote agricultural worker safety, and even manage abiotic stress in crops. Biological products have the potential to help with all these issues.”
While the world reeled from COVID-19 (and in many places, continues to), agriculture was, in many regions, deemed essential and therefore not subject to some of the restrictions and challenges faced in other industries. That’s not to say that ag wasn’t affected by the pandemic. According to Lewis, that influence wasn’t always negative.
“Politically there is a wish for greening of agriculture, and this has been heightened following the pandemic,” she says.
BPG’s Cock Duque shares a similar sentiment.
“This is positive,” he continues. “We knew that the biocontrol option was going to grow, but based upon the conversations I've had with many people in the industry there is [now] a growing interest in accelerating the adoption of these type of tools.”
“Our members are very optimistic about the rest of 2021 and are eagerly looking forward to 2022,” Jones says. “As the world continues to get back to normal, the expectation is that our industry will resume its rapid growth. While 2020 did slow almost everything in the world down, our members expect that it was, at worst, a temporary lull for the biological product industry. There is a strong belief that 2022 will be another strong year for our industry.”
According to Cock Duque, the way the EU has banned a number of molecules could help drive biologicals to new heights.
“Since many developing countries rely on their exports to Europe, this also has very important implications,” he says. Public policies such as a EU’s Green Deal and the Farm-to-Market strategy have very aggressive targets on changing the way farming is done.”
Among the EU’s goals is to reduce the amount of pesticide used by 50% by 2030. While regulatory agencies are limiting the options available to growers, the manufacturers of biological products are looking to deliver new, effective tools.
“There are so many opportunities for biologicals on the horizon that I’m not sure where to start,” Jones says. “Microbial-based products for both biopesticides and biostimulants continue to be the fastest growing segment of biological products, so there is lots of opportunity and exciting research and development in microbials. Several of our member companies are now investigating peptide-based products, so there is opportunity there. Similarly, we have members making advancements in pheromone technologies that are creating new opportunities.
“Biostimulants in general including some biofertilizers are poised to present huge opportunities, especially once there is a clear path to market for this essentially new product category,” Jones continues.
That path remains a work in progress for now, he says, although there is progress being made.
With positives developments like these in sight, BPIA, BioProtection Global, and IBMA are working hard to help their members clear some onging hurdles.
“Growth is continuing,” Lewis says. “In Europe the regulatory challenge is a key issue that is blocking some members from progressing their business in Europe. Unlocking use in arable crops in Europe is also key as farmers are not rewarded for using biocontrol within the Common Agricultural Policy (European subsidy system) but are rewarded for yield and less so for quality. Advice to growers on field use of biologicals is lacking.”
Cock Duque expresses a similar sentiment.
“Great products that are being developed are taking way too long to reach the market due to this situation,” he says.
Despite the rapid acceptance of these products, the lack of understanding among end-users is stifling even further growth.
“Education is instrumental,” Cock Duque says. “At all levels, starting with farmers, there's a need to make a paradigm shift because most farmers either have not heard about biologicals or believe they are costly and less effective.”
Jones explains it this way:
“The number-one challenge for growing the biological products industry is simply lack of awareness,” he says.
“I recently participated in a forum organized by the Farm Foundation to talk to farmers about biological products. Based upon the questions from the audience, it was clear that too many growers just haven’t given biological products a chance yet because they don’t know what kind of products are available and what they can do. Several growers were surprised to learn that most biological products are used by conventional growers rather than organic growers, and that in addition to fruits and vegetables, there are biological products being used in forestry, industrial hemp, ornamentals, public health, turf, and many other sectors. Since BPIA’s mission is ‘Advancing sustainability through biological solutions,’ it’s not a stretch to say that it is part of our mission to address this challenge and to promote greater awareness of biological products and that is exactly what we plan to do.”
Education has additional benefits beyond just helping the expand product use.
“[One of the biggest opportunities for expanding biological use is the] arable market in Europe and emerging pests for which a new approach to resilient cropping is required,” Lewis says. “The broader benefits of biocontrol such as soil health and carbon cycling need to be communicated to provide the extra incentives for growers to use more biocontrol.”
The expectation is that the ag industry will continue to evolve providing continued opportunities for biological products. It’s little wonder why the leaders of these associations are eager to share their enthusiasm.
