One block from a Walmart and two new hotels in Roseville, Minn., sits the 1-year-old headquarters of Calyxt, an advanced, ag-focused gene-editing firm. Someone driving by the suburban headquarters may be surprised to find a soybean field out front. Yet that’s what they would have seen this summer as part of the new headquarters.
The early days of plant transformation used genetic modification techniques, and the focus was on input traits including insect and herbicide resistance. Jim Blome was along for that ride in his previous work with Bayer. “My entire career, I’ve sold GMOs and pesticides,” he says. “You know that consumer preference is changing, and [Calyxt] seemed to be in the forefront of it.”
Blome’s last role was president and CEO of Bayer CropScience. That changed, however, when Bayer bought Monsanto and he sought new opportunities. Today he’s CEO of Calyxt; and given how the past year has gone for the startup, it’s been a good move for this longtime industry executive.
Blome, whose family still farms in Iowa, is excited about the opportunity to work with a company bringing identity-preserved, consumer-focused traits to market. “It’s a different way to tell the story of how agriculture is benefiting you,” he says.
Rethinking the soybean
High-oleic soybeans are not a new idea. Other major players are promoting these enhanced soybeans with properties more those of olive oil, but with no olive-like flavor. And this new oil has a range of benefits for commercial and consumer users, including longer fryer life; fewer cleanout issues at restaurants; and an improved fat profile, giving it a leg up on trans fats.
The key difference is that other companies went the GMO route for high-oleic soybeans, while Calyxt turned to gene editing, a process that USDA and the U.S. Food and Drug Administration have both ruled is not genetic modification, but instead is seen as a form of accelerated plant breeding. Hence, the Calyxt oil — Calyno — can carry a non-GMO label.
THINK OLIVE OIL: Calyno salad oil from Calyxt, which is being used in commercial kitchens, provides the benefits of olive oil without the “added flavor.” The high-oleic oil has other benefits chefs like, too, and this version can be noted as non-GMO.
The FDA move to remove all trans fats from food by Jan. 1, 2020, doesn’t hurt Calyxt, either. Yet carving a new niche in the food industry is no easy task. Buyers want products at volume, and the companies producing the soybeans for the oil must create enough value for the farmer that there’s an adequate, high-quality supply. And along the way, it’s important to verify the quality and availability of the trait the buyer wants.
Blome explains that Calyxt is doing all of that with its process, but there’s plenty of opportunity. “The United Soybean Board says we’ll have 16 million acres of high-oleic soybeans by 2028, which would make it the fourth-largest crop in the United States,” he notes. “Pushing cotton out into fifth place is a pretty significant statement.”
That 16 million-acre number includes all types of high-oleic soybean oil — gene edited and biotech.
Blome welcomes the other players in the market, noting that one company in an innovative business can be “kind of like one guy yelling in the forest,” he says. “When two guys are fighting over market share, and you’re both selling the benefits, the Syscos of the world start to pay attention.” Sysco is a major distributor that serves the commercial food service industry.
Calyxt has been building slowly as it adds more acres. The first year the company had soybeans to plant, farmers put in 16,000 acres. And that was just one variety. When Blome arrived, the process became more formal as he worked to bring in new partners in agronomy and processing to make these products more “real” to buyers. In 2018, the company had 57,000 acres contracted. For 2020, the aim is 100,000 acres.
Building a viable business plan
While soybeans are the first new product, Calyxt is also working on a high-fiber wheat and a potato with a lower acrylamide profile, all with gene editing. For the farmer, that non-GMO approach to improved crops also means seed costs are lower up front. “Seed is the first input; it’s the longest-financed,” Blome says. “We’re not GMO, so our soybean seed has a lower cost.”
The company’s approach is different, too. Essentially, the farmer contracts acres, not bushels, and the company will buy the entire production off those contracted fields at a premium. That premium has a wide range, from as little as 55 cents to north of a dollar. The range includes several factors, from on-farm storage to delivery options and more.
That first year, Calyxt had one soybean in a specific growth zone. For 2020, the company has two to four different varieties, with a wider geographic coverage. On farms that contracted with the firm in 2019, Calyxt got about 17% of their soybean acres — which is about right for a product at this stage of market development, he adds.
To make this work, Calyxt has brought in partners. Agtegra, which is the eighth-largest ag retailer and has 6,000 members, is the agronomy partner. Blome notes that Calyxt is working to change soybeans from a commodity crop to a value-add for the farmer, and the agronomy partner helps including setting aside space for these soybeans to go in and remain separate at harvesttime. Agtegra also helps identify and sign up growers to raise the new-tech soybeans, as well as seed treatment and delivery.
He quips that non-GMO soybeans are a little harder to raise then their GMO counterparts too, which is where Agtegra’s agronomy support comes in handy — resulting in a great glyphosate-resistant strategy.
Next step is to connect with soybean crush to get at that higher-value oil, which is where Landus Cooperative comes in. One of the largest cooperatives in Iowa, Landus has a crush facility near Ralston, Iowa.
Thinking local, ignoring global
The soybean market has taken a beating lately, with trade and tariffs changing how crops move. For Blome, what Calyxt is doing means the firm can kind of ignore global pressures.
“We don’t sell a soybean,” he observes. “We sell the oil and the meal.” That means the firm isn’t dependent on those global marketing whims.
Nor is the gene editing company concerned about the European interpretation of gene editing, which has the industry concerned about the future of the advanced breeding technology. Calyxt isn’t selling in Europe — it’s domestic.
In addition, Calyxt works the process from farm to fork to make sure the oil buyers get is as pure as possible. “We work to assure our customers of the purity of our product,” Blome says.
At a time when commodity crops are not covering their cost of production, new approaches like Calyxt offer potential. Wheat growers will keep an eye on that high-fiber wheat; and for those potatoes, the non-GMO approach has an appeal to the restaurant industry. Both technologies would also be largely for a domestic market shielded from international trade pressures.
Learn more about Calyxt at calyxt.com.