Create Foundations for Market Growth
By Renee Targos, Editor, AgriBusiness Global
As more governments define and set legal frameworks for biostimulants, this plant health product shows rapid market growth globally. For India and the European Union, two regions pushing sustainable agriculture, this past year marked a new level of legitimacy for serious biostimulant companies as is evident in R&D investments and acquisition from big player multi-nationals.
In April 2022, the Government of India created regulations for biostimulants that mandate manufacturers have a license to sell and submit products for testing. The Biological Agri Solutions Association of India (BASAI) lead by Chief Executive Officer Vipin Saini, worked with the Government of India to categorize biostimulants under the Fertilizer Control Order. This new regulation is forecasted to open a $1.5 billion biostimulants market for manufacturers willing to follow government guidelines.
In July 2022, the European Union (EU) Fertilizing Products Regulation (FPR), including biostimulants, was fully applied, allowing companies to access the common market of 27 member states of the EU through one harmonized set of rules.
Arne Pingel, newly elected President of the European Biostimulants Industry Council (EBIC) and Global Product Lead Biostimulants, Syngenta Crop Protection, said it took a decade of work by EBIC with leaders Luca Bonini, Chief Executive Officer of Hello Nature, and Giuseppe Natale, Chief Executive Officer of Valagro SpA, and other collaborative partners, including the EU Commission, to create the FPR.
Paul du Pre, Export Sales Manager for K-Adriatica, said, “In the EU, we expect the size of the biostimulant market to reach €1 billion by the end of this year and a forecast of €2 billion by 2026.”
The FPR brings about a swifter registration process for biostimulant manufacturers. Kristen Sukalac, Permanent Representative, EBIC, and Consulting Partner, Prospero.ag, said, “Companies would have to go to every one of the 27 countries in the EU and go through a different process with different data requirements. … Now the companies only have to go through one process called conformity assessment.”
Concetta Di Paolo, Senior Regulatory Expert-Biosolutions, Eurofins Agroscience Regulatory, said with the new regulations in the two regions, there will be more points of entry for Indian and European biostimulant manufacturers. “Most likely it is going to be a mutual opportunity both sides, to the final end of a more sustainable agriculture which is evermore a global common objective.”
Exponential Growth Interest
As governments set legal frameworks for identifying biostimulants products, companies are investing more into research and development and taking new products to market. The EBIC reports that many of its members responded to a survey stating they are investing 3% to 10% of turnover into R&D with 10% to 33% of their staff involved in R&D activities.
“There's a growing interest of small, medium, and multinational companies filling a takeover mania that’s affecting the whole industry in ways never seen before,” said du Pre. “Companies are attracted by the almost 13% annual average market size growth in revenues reported in the last decade, which is expected to continue in the next 5 years and by the higher profit margins of this industry.”
This is evident through Syngenta’s acquisition of Valagro, and most recently, Corteva’s acquisition of Stoller, a biostimulants giant with operations and sales in more than 60 countries and 2022 forecasted revenue of over $400 million. Chuck Magro, Chief Executive Officer and Director, Corteva, Inc., made a statement at a press conference in December 2022 that as a part of the company’s review of its portfolio, its focus is on “the exit of commodity glyphosate products and the methanol business outside of Brazil, as we tilt the CP portfolio to more unique, differentiated, and sustainable products.”
“The acquisitions of both Stoller and Symborg are other shifts in our portfolio,” said Magro. “Both companies are leaders in their space with strong revenue and earnings profiles and will also support the 2025 financial framework. The biologicals market is expected to be the fastest-growing crop protection segment in the industry, representing 25% of the overall market by 2035. As the demand for sustainably produced food continues to grow and the regulatory environment becomes increasingly complex, we believe biologicals will represent another solution for growers to do more with less. This acquisition, combined with our leading innovation capabilities, positions Corteva as one of the largest players in this attractive market.”
As more biostimulant companies are acquired and competition continues to grow, companies like K-Adriatica have a plan.
“Sooner or later growth will slow down,” said du Pre. “Companies will consolidate offerings and competition will get tougher. Investments in R&D and communication will be key to success.”
As companies gear up to offer more biostimulant products, the increasing adoption from growers is evident not only with an increase in global market growth, but with farmers’ openness.
In Spain, Jorge Aguilar, Director of Global Strategy Marketing and Portfolio, Tradecorp, said, “Five years ago, when I would tell growers about biostimulants, they thought it was equivalent to snake oil. One year ago, I repeated the same talk to the same farmers group, and there was interest. They had tested biostimulants and now they understand how they alleviate abiotic stress that impacts their crop quality.”
Pingel observes that successful biostimulant companies are giving clear communication to growers. “All the companies that are serious in the area understand the products much better,” said Pingel. “They can give very specific advice to the growers on how to use them, and how to get the optimum return of investment.”
Guidance and education are key to companies selling biostimulants successfully. Rick Melnick, Vice President of Global Business for Dunham Trimmer, LLC, agrees and says good communication is one reason the biostimulant market in Brazil is growing rapidly.
“Since biostimulants are typically being used to mitigate abiotic stress, their efficacy is often entirely dependent upon environmental conditions,” said Melnick.
“So, if you’re a biostimulant salesperson, you have to understand and communicate that their effects are not going to replicate every year as they might with traditional crop protection products. The biostimulant companies that are succeeding in Brazil tend to be the ones that have really strong grower access. Since they're close to the grower, they are able to facilitate this knowledge transfer and accelerate biostimulant adoption.”
Forecasts for Biostimulants Global Market
DunhamTrimmer’s 2020 Global Biostimulant Report indicates the compound annual growth rate (CAGR) for each of the six regions covered in the report will be in double digits through 2025. Growth is particularly high for the following three regions:
Asia/Pacific: China is the leading biostimulant market by volume for this region at $152 million. However, with 10.94% CAGR (2020-25), China is not the most rapidly growing market. Nor is it India, the second largest market in this region at $101 million with an expected growth rate of 13.25% (2020-25). The fastest growth in this region through 2025 will be in Southeast Asia at 17.26% CAGR and the Rest of Asia Pacific at 17.60% CAGR. Both markets combined are at $82 million (Southeast Asia: $39 Mn and Rest of Asia Pacific: $33 Mn)
Latin America: Brazil is the leading biostimulant market in Latin America with 2021 sales estimated at $182 million and a 12.29% CAGR (2020-25). In addition to its traditional fruit and vegetable crop uses, a growing culture of biostimulant use in broad-acre crops is emerging. Mexico, with its large fruit and vegetable export hectarage, is the region’s second largest market, with 2021 biostimulant sales estimated at $104 million with a 10.43% CAGR (2020-25). Other Latin American markets with rising acceptance and use are Peru (14.65% CAGR (2020-25), Central America (14.65% CAGR), and Ecuador, Columbia, Paraguay, and Argentina at about 15% CAGR (2020-25) for this region.
Rest of World: Encompassing South Africa and much of Sub-Saharan Africa, the RoW region is the world’s fastest growing with a (2020-2025) CAGR of about 15%. However, this region accounts for the smallest sales at an estimated $141 million in 2021.
In the other regions around the world, there is steady growth, albeit not as pronounced:
North America: The United States is the leading market in this region with a 2021 market estimate of $393 million and a (2020-2025 CAGR of 10.08%. Climate change and the U.S. government’s push for low pollution and regenerative agriculture are among the factors driving biostimulant use.
Europe: As the region where biostimulant manufacturing and use originated, Europe leads the world with a 2021 biostimulant market of $616 million and a (2020-2025) CAGR of 10.58%. DunhamTrimmer expects that the Asia/Pacific Region will surpass Europe by 2025, however, to become the world’s largest regional market.
Middle East/North Africa: The MENA region was an early adopter of biostimulants given the intensive production systems in Turkey, Morocco, and Egypt, as well as the challenging abiotic stress conditions. The region accounted for $232 million in biostimulant sales for 2021 with a CAGR of 9.76 % (2020-2025). Growth in MENA is slower because the market is more matured.
“Biostimulants are attracting more and more interest, all over the world,” said Di Paolo. “The commitment for agriculture is to produce more, whilst reducing chemical inputs such as chemical plant protection products and fertilizers. The aim is to build a sustainable food chain to feed a growing population on a warmer planet. Plant biostimulants are part of the answer to this demand.”
