Bioeconomy – the biological transformation of industry

Industrial biotechnology enables natural raw materials to be utilized efficiently, industrial manufacturing processes to be improved and new biobased products to be created. With its wide range of biobased ingredients and processes, the BRAIN Group makes a significant contribution to making consumer goods more effective and healthier and to making industrial processes more efficient and more sustainable.

Financial Publication

Company management, The company and Corporate Stories 2018/19

(from AR 2018/19)

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Central topic for the economy and society

The responsible utilization of natural raw materials and the protection of people and nature create the foundation for a sustainable economic system. For this reason, our society needs advances to be made in terms of environmental protection, greater product and supply security, and improved raw material efficiency. In order to meet rising demand for sustainably produced or biobased goods, both policymakers and business are driving the biologization of industrial processes, goods and consumer goods. New technologies, processes, services and business models are helping to make the production and consumption cycle more sustainable, thereby establishing the basis for a forward-looking economy and way of life.

The bioeconomy’s business potential is based on the growth prospects of hitherto undeveloped value-added chains as well as disruptive product ideas. Industrial biotechnology is a pioneer and driver of innovation in this transformation of the economy and society. As a forward-looking technology, it encompasses completely new approaches and solutions that seemed unthinkable just a few years ago. Equally, as a cross-sector technology, it integrates various disciplines from the life, natural and engineering sciences, as well as areas of medicine, engineering and materials sciences. This integrative strength addresses a society-wide trend towards naturalness and sustainability in various areas of life.

Sustainability requires innovation

Innovative industrial biotechnology processes exploit the diversity of natural organisms and transformation processes. They are deployed intensively in the food and animal feed industry, and in the cosmetics, health care, chemicals and energy sectors. However, the industrial application of enzymes, microorganisms and natural products depends on economic factors such as time and energy consumption as well as the cost of scaling production processes. Compared to chemical-synthetic processes, they can realize complex material transformations in a much more specific, more benign and more energy-saving manner. As a consequence, applying them in the biobased economy offers enormous potential to overcome current problems such as health problems caused by high CO2 emissions and malnutrition.

At the societal level, the effects of individuals’ actions on the environment are increasingly being questioned. On a global scale, consumers are becoming collectively more aware of their responsibility for the origin and make-up of everyday consumer goods. Environmentally compatible production and the highest possible proportion of natural ingredients are regarded as quality characteristics. As this perception of quality increases, people become more prepared to accept a higher price. This applies especially to food and personal care categories, which are characterized by prominent manufacturer brands. Nevertheless, requirements in relation to the usual properties of taste or haptics remain. As a consequence, consumer goods manufacturers face new challenges. Often, the change of essential product characteristics is the result of a product or process modification. By utilizing biological ingredients and biotechnological processes, it is possible to switch to more efficient products and processes while retaining the original quality and product attributes. Chemical-synthetic processes can be partly replaced by biological processes. However, higher conversion costs are paying off for manufacturers thanks to cost savings in production and value added at the consumer level.

Markets and outlook

The share of biobased solutions in industrial value creation has been increasing steadily for years. In the EU alone, the chemical industry is one of the most important sectors of the economy, accounting for value added in excess of € 500 billion (2016) and well over one million jobs, and supplying all industrial sectors, with biobased solutions now generating estimated sales of € 38 billion (2016).1

When consumers worldwide are surveyed about their wishes, almost 60% of them say they prefer natural products. This preference is particularly evident in the food and drink categories, as well as in personal care and health products.2

The global market for flavors, fragrances and ingredients has an estimated value of around € 57 billion (2018) and accounts for a dominant share of over 80% of the value added of all specialty ingredients. According to experts, this market segment is expected to grow by almost 8% annually up to 2026.3

BRAIN is well positioned worldwide with its three product categories of bioactive natural compounds, tailor-made enzymes and high-performance microorganisms. The company transfers its specialist knowledge of biological systems into industrial applications, concentrates on the development of marketable products and focuses on the most promising markets.

Nature-based high-tech

With its wide range of biobased ingredients and processes, the BRAIN Group makes a significant contribution to making consumer goods more effective and healthier, and to making industrial processes more efficient and sustainable. The company boasts a unique combination of an industry-leading proprietary collection of natural resources (its BioArchive) along with broadly protected key technologies. This basis enables the creation of true innovations: proprietary research and development results are comprehensively patentable, and enable chemical processes to be substituted by biological solutions. BRAIN bundles its technologically pioneering expertise in the development of novel, biobased solutions in the form of tailor-made enzymes, bioactive natural compounds and high-performance microorganisms. The unique access to the comprehensive “toolbox of nature” and the utilization of the broadly protected high-tech portfolio endow the company with an advantageous position in its focus on the high-growth markets of Nutrition & Health, Skin Care and Industrial BioSolutions. As a pioneer in industrial biotechnology, BRAIN is a preferred supplier for both manufacturers and suppliers in these industries. The development of marketable products from the company’s own research opens up new and promising business potential for the company.

Responsibility for natural growth

Responsible growth lies at the heart of BRAIN’s corporate philosophy. This guiding principle is also increasingly a factor driving capital flows in international financial markets. Private and institutional investors have been focusing to a growing extent on socially responsible asset types, otherwise referred to as SRIs (Sustainable and Responsible Investments), or impact investing. As investors, they are an important pillar for investing in a sustainable future. Biobased business supports the opportunity of a new cycle entailing groundbreaking innovations, stronger economic growth as well as a comprehensive improvement in many people’s quality of life.

Besides digitalization, the bioeconomy is one of the most important growth topics of the 21st century. The EU Commission estimates that it will create one million new jobs by 2030. Germany is a strategic pioneer of this development and since 2010 has already been pursuing its own “National Bioeconomy Research Strategy 2030”, as part of which it has established several state-supported innovation alliances since 2011 in order to accelerate structural change. BRAIN is involved in various roles in the design and implementation of the national research strategy, advocating the sustainable transformation of the economy and society at several levels of action.

1: European Bioeconomy in Figures, 2008 - 2016, Biobased Industries Consortium, July 2019

2: Nielsen, Mintel – 2016, Nielsen Global Health & Wellness Survey – Q3 2014, S. Roman et al; The importance of food Naturalness for Consumers; Trends in Food Science & Technology 67 (2017) 44-57

3: Roadmap for the Chemical Industry in Europe towards a Bioeconomy (RoadToBio), Strategy Document, 2019

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