Changes, opportunities and challenges for SMEs like Andermatt Biocontrol in the global biopesticide market

 

Andermatt Biocontrol has a long history with almost 30 years in the biocontrol industry. Its key expertise in biocontrol was built up by producing a large number of baculoviruses and other biocontrol products and by also developing the correct use of a large range of biopesticides. Since providing technical advice directly to the farmer was recognised to be a key success factor for biopesticides, Andermatt Biocontrol established, in addition to its domestic operations in Switzerland, subsidiaries in South Africa, Canada, France and Brasil. At present, the family- and employee-owned company distributes its products in more than 50 countries and has more than 100 employees. 

 

Andermatt Biocontrol had the opportunity to grow organically based on different megatrends: in the early 1990s it was the increase in organic farming mainly in Switzerland, then the resistance build-up of major pests such as codling moth towards chemicals which favoured the integration of biocontrol solutions in conventional spray programs. From 2006 onwards, when there was a residue scandal in Europe, the main driver was residue reduction on fruits and vegetables. Nowadays, biopesticides are becoming main-stream and all the big multinationals have made acquisitions of biopesticide companies thus making major investments in biopesticide developments. 

 

The huge investment and allocation of worldwide R&D budgets towards biopesticide development is a consequence of consumer demand for safe food and of a public awareness for the need of sustainability. We are convinced that biopesticides together with a clever crop management will completely replace the use of chemicals sometime in the future. In the meantime, the biopesticide sector will have to solve many challenges. 

 

One of these challenges is biopesticide registration. Biopesticides are often highly selective, which results in small market potential or turnover. As a consequence, cost and time for the registration process has to be limited otherwise nobody would register such a biopesticide. Even though there are many statements that the registration process has to be simplified for safe biopesticides, the opposite is happening. SME’s often used waivers referring to research results found in literature instead of producing costly nonsense studies. Meanwhile, registration authorities are asking for more and more studies. One driver for this is the fact that agrochemical companies focus on broad spectrum biopesticides for which the market size is bigger, thus they can afford to invest in a full data package for registration. As a consequence of this, registration authorities tend to ask for the same data package for niche products. Ultimately and unfortunately, it is a fact that good niche market solutions with small market potential will disappear if there is not a political process in place for quickly lowering the bar for registrations of good and safe niche biopesticides. 

 

Another challenge is the lack of IP protection. Since most of the biocontrol solutions cannot be patented, followers can easily copy solutions of an inventor. Moreover, the development of biopesticides based on natural resources has become a challenge due to the Access- and Benefit-Sharing Convention (Nagoya Protocol) whereby the access to natural resources is regulated however the corresponding administrative access process is not yet established in many countries. Both IP protection deficiencies and the ABS Convention slow down the development process. 

 

Furthermore, an important task for the successful use of biopesticides is to bring the relevant know-how to the attention of the farmers. Key factors for the long term success of biopesticides are the transfer of precise technical information by biopesticide companies and extension services regarding the use of biopesticides and improving the basic education of farmers. This is especially challenging in developing countries where the general level of education is low. 

 

Despite the listed challenges associated with the biopesticide sector, we see great opportunities for an SME like Andermatt Biocontrol. A long history in the sector has helped to build-up a profound knowledge to correctly produce, store and use biopesticides. Good quality production and appropriate transport and storage are as important as the knowledge transfer to growers with respect to correctly using our products. Although there are many competitors in the field of broad-spectrum biocontrol solutions, there are also many niches between the elephants of the industry whereby many new developments of products and markets are possible for an SME like Andermatt Biocontrol.