Organic production or bio-based production (production of food, materials and other products by microorganisms) is the basis of a more sustainable, healthy and resilient economy, i.e. bioeconomy.
Some bio-manufacturing processes already exist in pilot projects, such as the production of food ingredients such as egg protein (each) or natural colors (chromogics), or the production of materials such as vegan leather (polybion) or sustainable cement (biomass). Bioproduction of drugs, such as insulin, is well established in the pharmaceutical industry with small product volumes and high costs.
However, scaling bio-production for food and materials to industrial scale and cost levels is the next key step in building a bioeconomy. The report, “Making the bioeconomy real, develop for scalability and creditability,” was published by Swiss impact investor Blue Horizon and Italian CDMO Olon and is aimed at founders, investors, researchers and lawmakers in the new bioeconomy. The report outlines three courses of action for increasing organic production.
The first method is based on the fact that the go-to-market strategy determines the selling price of the product and therefore the maximum acceptable production cost for the organic production process. The iteration between go-to-market strategy and bioprocess development thus forms the basis of any bioeconomy business plan. Higher production costs may be temporarily acceptable where demand elasticity is low and cheaper alternatives are lacking; However, in more mature markets, firms with chronically high production costs often chase elusive premiums.
Scalability makes or breaks it
Second, strain selection and process development is a multi-parameter optimization challenge. Choosing between the three most commonly used microorganisms (and possibly many more novel ones), selecting media components, and deciding to scale up or scale out all need to be considered in context. These choices are what make or break the scalability of the process – thus, the likelihood of success increases when a biomanufacturing process is designed with scale in mind.
Third, scale-up infrastructure is needed to run scale-up biomanufacturing processes, and financing such innovative infrastructure is a major challenge. Potential sources of capital – from shareholders’ equity, public subsidies and various forms of debt grants – will be needed by any and all. Where this funding journey is established early on, businesses can be built with creditworthiness in mind, unlocking access to lower costs of capital.
The full report covers all three aspects of the bioeconomy in detail with additional thoughts and examples. Additionally, throughout the concluding part of the report, there is a clear definition of what various interested parties can do to expand the bioeconomy.
The five different groups described include researchers, founders, governments, investors and lenders. Each is followed by a brief summary of their recommendations. It is the authors’ belief that in combining these five different groups on a bioeconomy scale, the financial scope and potential for positive impact on the planet, people and animals is enormous.