Introduction
Bacteria are one of the most overlooked forms of life on Earth. But despite their size, they have big jobs and are an important part of our ecosystem. Among these ecosystem supporters are cyanobacteria. They are part of a group called autotrophs, meaning they produce their own energy via photosynthesis.
Biodel AG is harnessing the power of these amazing little organisms to bring sustainability and soil regeneration into agriculture. We spoke with founder and CEO Ben Cloud about the potential of its soil additive to revitalize farmland.
Note: This interview was conducted over phone and email. It has been lightly edited for clarity and length.
How did you discover the potential of cyanobacteria for land regeneration and carbon sequestration?
In 2005, I was introduced to cyanobacteria and operated a large pilot facility from 2007 to 2012. Select strains of cyanobacteria fix nitrogen from the atmosphere, and others are phosphate solubilizing which are essential characteristics in restoring soil health. Cyanoblend™, a proprietary blend of cyanobacteria strains, is licensed exclusively to Biodel AG for use in animal feed, soil amendment, and fertilizer formulations. SequesterⓇ Soil Amendment is our first commercial product under this license agreement.
In the microbial world, beneficial bacteria, fungi, protozoa, and nematodes are essential to soil health and function. Cyanobacteria are the D-10 Cats in the construction of soils’ microbial world. The cyanobacteria in SequesterⓇ are nitrogen-fixing, photosynthetic autotrophs. This means they bring their own energy to restore soil health. Bacteria, fungi, protozoa, and nematodes are heterotrophs that must be fed in order to grow. For the farmer seeking to adopt regenerative practices, they may apply tons of compost per acre (a combination of microbes and food), or simply apply a couple of gallons of SequesterⓇ. Therefore, it is simply a more economical and convenient to apply SequesterⓇ.
We soon began to see the emergence of regenerative agricultural practices to improve soil health and sequester carbon from the atmosphere. So, in 2019 we formulated SequesterⓇ with Cyanoblend™ and other enhancing ingredients as a superior soil reclamation product that is registered as a soil amendment. Limited sales have begun in 2022, and we are accelerating our marketing efforts in 2023 and beyond.
What does the competitive landscape look like, and how does Biodel AG differentiate?
Agriculture (AG) is the largest industry worldwide, and it can be characterized in two segments: conventional (chemical based) or regenerative (microbially based). Today, there are 450 million farmland acres (US only) that apply inputs such as herbicides, pesticides, and fertilizers. Of this total, approximately 20 million acres (5%) can be categorized as regenerative, and this is based on farmland operated under organic standards. However, for farmland to be used to sequester carbon from the atmosphere, our market focus is the remaining 95% of conventionally farmed acres that must shift to regenerative practices. SequesterⓇ will be used by many of these farmers who are looking for the most economical and low risk inputs.
Why the transition to regenerative? The value of carbon is rising as governments worldwide are beginning to implement incentive programs to compensate AG landowners based on the amount of carbon sequestered. The adoption of regenerative practices is essential to turning AG lands into carbon sinks so carbon credits can be sold. In addition, economists predict the value of carbon credits available to emitters like Amazon, Walmart, and others will rise aggressively in the coming years, especially as the zero carbon goal of 2050 is only 27 years away. Farmers have two ways of capturing value for carbon sequestration: 1) government incentives or 2) the sale of carbon credits.
It was clear some five years ago that the market for carbon credits from AG lands would begin to emerge as climate issues worsen, which they have. Biodel AG benefits as follows:
- Biodel AG trademarked the SequesterⓇ name in 2019. Our objective is for SequesterⓇ to become a highly recognized brand related to sustainability and carbon sequestration with AG lands.
- We provide an economical and low risk method to restore soil health and function while continuing to grow high yielding crops. Currently, there are very few direct competitors.
- The transition to regenerative practices will increase rapidly in the coming years along with the growing market and rising value of carbon credits. Literally trillions of dollars in incentive programs and the increasing price of carbon credits hasten the transition to regenerative practices.
What is your business model?
Biodel AG is a manufacturer of key ingredients for regenerative plant and crop production. SequesterⓇ is our own branded product. Sales are generated through three market segments serviced, as follows:
Residential/Small Farm Market: This includes lawn, garden, landscape, orchards, pastures, and small farm customers who are adopting regenerative practices to sequester carbon from the atmosphere. Customers can purchase SequesterⓇ from our online store (https://sequester.ag), and from garden supply and regional supply stores. As sales volumes grow in the coming years, we expect to sell SequesterⓇ in big-box retailers as well.
Commercial Crop Producers: Farmers purchase SequesterⓇ from AG distributors who obtain the best pricing for volume purchases. AG distributors sell to AG retailers, crop consultants, and large farmers. Farmers can purchase from our online store as well.
Regenerative Transition Contracts (RTCs) for Carbon Sequestration: Biodel AG has developed RTCs for large farmland owners to transition from conventional to regenerative practices with low risk. Generally, the term is for 5-years and performance is verified by soil samples that reflect the growing amount of carbon that is sequestered in the soil. The amount of carbon can be quantified and carbon credits can then be sold for additional income to the land owners. We have a highly qualified team of AG professionals, plant and soil scientists, and business professionals to market the RTCs. They are compensated by commission on the sale of products and services.
How do you intend to grow on the carbon sequestration market?
The primary reason for this capital raise for Biodel AG is to support our marketing efforts for SequesterⓇ with a carbon-focused marketing campaign. We believe we can increase customer awareness of SequesterⓇ and the opportunity to reverse climate change. Whether it is a small yard or thousands of acres, we can all do our part.
In addition, Biodel AG is committed to providing a quality product that is effective in restoring soil health and function so soils once again sequester carbon from the atmosphere, rather than being an emitter as conventional farms are today.
How will you use the money you raise this round?
Capital raised with this offering will be used to primarily promote SequesterⓇ in the marketplace and expand production capacity. We believe it is essential to promote Sequester in the marketplace with targeted advertisements and field trials directly to farmers and AG distributors.
As you think about the business five to 10 years down the road, what do you see exit opportunities looking like? Have you set any future goals for the company?
Our expectation is that the market for carbon credits from AG lands will grow significantly, as driven by the goal for net zero carbon emissions by 2050. This is likely to be reflected in the rising value of the carbon credits and the increasing purchases of soil reclamation products like Sequester. In addition, the value of a sustainable food supply is increasing due to the exponential growth in population. We believe this will present exit opportunities as the values related to climate and food supply increase and large company interest to acquire smaller firms with a solid basis for creating future value. As a CEO, I believe it is my duty to always be aware of the value of our enterprise relative to market conditions and to optimize the value for our shareholders.
We’re excited to see where Ben and his team take the company. Biodel AG is currently raising on Wefunder.
