Speciality & Row Crop Gene-editing – Innovation & Key

Trends – 29 September 2021

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Specialist:

Title:

Moderator: Nyree Hinton (NH), Third Bridge Sector Analyst

Alvar Carlson (AC)

Associate Director at University of Wisconsin Crop Innovation Center

Agenda:

1. Relative pace of innovation and breadth of products in row crop vs speciality

2. Success of herbicides and seed treatments

3. Impacts of consumer ESG concerns on GMO adoption

4. Plant-based meat-driven demand and controlled-environment farming dynamics

5. IP, production and commercialisation strategies

Contents

Q: How has GMO development and acceptance in US agriculture evolved over the years?

Q: Have you noticed more speed of GMO innovation and breadth of product in speciality or traditional row

crops? You pointed to herbicide and insect tolerance in row crops, but what is happening in speciality?

Q: How has the adoption of herbicide- and insect-resistant products in row crops developed internationally,

given variations in regional environment, demographics and demand? I imagine insect resistance is much

more important in some countries. How are commercial companies taking advantage of this opportunity? 4

Q: How many options do row crop farmers have to diversify into modified crops or seeds? What are the

technology and IP aspects to this?

Q: How is the sustainability trend and consumer preference towards organic products affecting GMO

acceptance? As you said, there’s been good adoption in the herbicide segment of the business, but consumers

are becoming more aware of what they’re putting in their bodies and caring more about the environment and

alternative products.

Q: How can GMOs continue to increase row crop yields? Have yields plateaued to a certain extent? What has

been done in row and what is yet to be done across increasing plant size, growth, resistance and harvest

cycles?

Q: What are the risks to GMO technology? It seems very innovative, but Roundup has faced issues.

Q: Could you elaborate on speciality crop innovation and the opportunities here for GMOs? You mentioned

the pink pineapple trait from Del Monte. How do speciality opportunities interlink with the huge increase in

controlled-environmental farming and mechanical advances?

Q: How hard it is to find specific parts of the DNA to modify? You seem to suggest that we’re early in the

technology, but where else could this be applied? What is the speed-to-market or production timeline for

commercialising a product such as a colour alteration to soybeans?

Q: Could you elaborate on rising demand for plant-based proteins and how this is affecting speed-to-market

or overall investment into gene-editing as a way to increase protein?

Q: What major issues for farmers could it make sense for ag players to innovate their GMO offerings around,

including insects and weather conditions?

Q: How are players seeking to encourage consumers to accept GMOs, given we touched on sustainability and

ESG trends earlier? It seems GMO usage is still less common in Africa – why is this the case?

Q: How could plants be modified to take in more carbon dioxide than they currently do?

Q: How are genetically modified seeds and so on performing in controlled agriculture environments? Is

there a need for innovation here given the plants are growing in seclusion from insects or other factors that

could lower yield or contaminate products?

Q: Are there any underappreciated opportunities in the market, particularly in speciality crops, given you

mentioned Del Monte’s pink pineapple trait? What are you noticing across market leaders?

Q: Are companies or institutions creating traits and holding onto this IP or technology and waiting for an

opportunity to capitalise it?

Speciality & Row Crop Gene-editing – Innovation & Key

Trends

Transcription begins at 00:00:03 of the recorded material

NH: Welcome to Third Bridge’s Forum Interview entitled Speciality & Row Crop Gene-editing – Innovation &

Key Trends. I am Nyree Hinton, and I’ll be facilitating today’s Interview with Mr Alvar Carlson, Associate

Director at University of Wisconsin Crop Innovation Center.

Alvar, before we get started with today’s Interview, please state I agree or I disagree to the following

statement: You understand the definition of material non-public information and agree not to disclose any

such information, or any other information which is confidential, during this Interview.

AC: I agree.

NH: Thank you, Alvar. Could you introduce us to your background and the various roles you’ve held in the

industry?

AC: Certainly. I started my undergrad at University of British Columbia in Vancouver and did a master’s in

plant science in Guelph in Ontario, before I came to the United States to do my PhD in the University of

Madison, Wisconsin in plant breeding and plant genetics. I’ve spent almost the last two decades in research

beyond that, a little bit of a post-doc and then into a couple start-up companies. One was working on biofuel

and one was working on insecticide traits developed from spiders actually. More recently, for the last couple

years, I’ve been working back at the University of Wisconsin, working with the WCIC, where I help small labs,

either in the public or private sector, develop their technologies in transgenic plants.

[00:01:41]

Q: How has GMO development and acceptance in US agriculture evolved over the years?

AC: The fact that GMO plants were entering the agricultural mainstream was why I got into this field. I started

looking at different things I could go and specialise in after my undergrad and I realised that plant genetics

was being potentially possible and it was being accepted. For the last 25 years or so, the main drivers of the US

GMO industry have been mainly two traits, herbicide tolerance, so that’s a gene that provides resistance to

commercially available herbicide, and insect resistance, so herbicide tolerance and insect resistance. Some

examples of those would be for a farmer that doesn’t like weeds in their field, they can go and spray it. Once

they’ve planted their transgenic crop, the transgenic crop is resistant to the herbicide, and the weeds all die,

they have a nice clean field and the yield is higher because the crop they plant doesn’t have to compete. Insect

resistance, that could be to probably a specific insect, like a lepidoptera, that eats the leaves of a plant, so the

plant expresses a gene that kills the insects that eat it and so you have less damage to your crop. Those have

been gaining in popularity from about 0% when they started, obviously, to in the 75-90% rates of use in the

United States. They’re mainly in three crops, corn, cotton and soybean. If you expand to North America, it

might include canola in there as well. The primary things you are going to find when you go out into the

marketplace to look for transgenics are going to be these two traits and in those three crops. There are other

examples. There are the exceptions to this that are more niche crops, maybe virus resistance in some fruits, or

Del Monte has released a pink pineapple trait recently. There are dabblings in new technology, and as we’ll

talk about today, some of those are gaining speed and will probably become the next wave of transgenics that

you see in the marketplace.

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[00:04:35]

Q: Have you noticed more speed of GMO innovation and breadth of product in speciality or traditional row

crops? You pointed to herbicide and insect tolerance in row crops, but what is happening in speciality?

AC: A lot of crops were made for transgenics. A lot of rice and wheat crops were originally made with the same

herbicide and insect resistant traits, but they never made it through the commercialisation gauntlet because

public perception of certain things, like people didn’t want transgenic flour, per se, in their pasta or in their

cake. Some crops have been hurt by the acceptance, whereas other crops that are more commodity crops that

are used in food or fuel, like corn for ethanol or for feed for cows, and soybeans for oil, they’re okay. The

market could bear that transgenic status. When we talk about speciality crops, those weren’t really being done

on an industrial scale, those were always being done in academia. It’s sort of following where the money is. If

you have a market that is 100 million acres, you have a lot of place to make profit on, and the amount of

money that has to go in to make a transgenic crop, back in the day, it was 10 years and USD 100m investment

to make an event, get registered, you’re just not going to get that off of a smaller crop like a lettuce or

something more speciality. Now, we’re seeing a transition. Like I said, in academia, people have always been

dabbling in this, but they’re never going to drive the creation of something commercial, but we’re seeing a

transition in this through the gene-editing phase.

The gene editing is there. Gene editing can happen, people understand it, but the rate-limiting step to gene

editing is these crops that have been under-evaluated and under-researched because there was no commercial

thing in them. There are labs that have publications that say, “You can do this with carrot or lettuce or

cherries,” or whatever, but it’s not a mainstream crop transformation protocol. These companies that are

doing gene editing are having to go back and develop these protocols and beat that rate limiter. Also, another

rate limiter, other than the protocol, is that often with these systems you can only transform one variety and

that might not be the variety you want to grow in the field. Gene editing is faster than the ability to transform

the barrier, beating the barrier of transforming these speciality crops. In some ways, while you see this

adaptation of some of the row crops, that was pretty easy to do, I think you’re going to see a staggered start as

people beat those systems, beat those barriers that are keeping the systems from developing more diverse or

speciality gene-editing crops.

[00:08:07]

Q: How has the adoption of herbicide- and insect-resistant products in row crops developed internationally,

given variations in regional environment, demographics and demand? I imagine insect resistance is much

more important in some countries. How are commercial companies taking advantage of this opportunity?

AC: I’ll speak to a couple parts of that. First is when you look at where else in the world these crops are

growing, anyone can go onto this ISAAA.org, it’s this institution that tracks the acceptance of global crops

around the world, and you can go look at the maps, and every year they look at the percentages. When you

look at that map, it’s not a complete map. The whole world hasn’t adopted transgenic crops, but it is starting, I

would say, like I said, with canola, if you include Canada, the certification of corn and soybean has been

adopted in the larger South American countries, like Argentina and Brazil, so I think it’s getting out there.

China has their own transgenic crops. The adoption is there. India, of course, was a big early adopter of the

transgenic cotton, but I can’t speak to every single year that everything has been done.

I will speak a little bit to how the products have evolved. In the beginning the industry started out with one

trait, they got it commercialised and they were pitching it as this one trait, herbicide tolerance, or insect

resistance, and then over time, they developed additional ones and then they would stack them together. You

might be able to go out and buy a corn plant that has above-ground pest resistance and below-ground.

Generally, corn suffers from the larval infestation of leps, so moths come and land on corn, fall armyworm,

corn earworm, and they lay their eggs and they get infested. If you have a lep Bt, an insect resistant trait, you

can control that damage, but then they are also infested by bugs that live underground, so you have to have

Private and confidential 4

another trait for corn rootworm resistance, another Bt trait that is specific to that. The companies in North

America were stacking single traits that they were marketing and termed stacks. It’s created a little bit of a

woven web between who owns which trait and how they’re licensed to sell. I think farmers are still buying it.

When you pay USD 25-plus premium for a bag of transgenic plants so that you can have that protection, that’s

where they’re getting their money back from it. I think that as a model, what you’re seeing in the United

States, is translating to these other countries of stack traits in these crops, but I don’t know, as I say, how far. I

would tell you to go and look at every year’s updated ISAAA report. That’s what I used to put in, every paper

for every year, that I would go in and type in the first paragraph, “How important are genetic crops?” and

you’d go and look up the update for it. It’s a good resource.

[00:11:37]

Q: How many options do row crop farmers have to diversify into modified crops or seeds? What are the

technology and IP aspects to this?

AC: Generally, what you find when you stack it is you’re going to get… For instance, one of the first stacks to

come up was called SmartStax, and it had some Dow Agrosciences traits in it and it had some Monsanto traits

in it, and they basically put them all together, stacked them into one line, so that they could have the

resistances to the different insects and whenever they wanted. Farmers can see what traits are in their bags

when they go. They have options of this or that and they can buy from different suppliers, but I don’t think the

average farmer knows exactly what they want. They’re going by the marketing brand names when they’re

getting it. I don’t want to get into what all the names people use, but there’s pro or plus, these things that get

added onto the name of the bag of the seed and the farmer is like, “It says plus on it. That’s what I want.” They

don’t know that it’s the Cry1Ac gene that’s protecting it against fall armyworm, or whatever, or maybe they do,

I don’t want to discount the collective intelligence of the average farmer, but marketing limits them to what

they’re knowing from the actual GM point of view. They just know they’re planting GM traits. The opposite

side of that is, as I said the adoption is 75-90%, there are non-GM options out there. There are still plant-

breeding companies producing non-transgenics, and some people want that. I know this for certain because as

a department in the university, we are looking for non-transgenic varieties, and we can buy them from local

seed sellers, because we want to transform it. We don’t want to buy a transgenic variety, we want to buy a non-

transgenic variety and improve it.

[00:13:54]

Q: How is the sustainability trend and consumer preference towards organic products affecting GMO

acceptance? As you said, there’s been good adoption in the herbicide segment of the business, but consumers

are becoming more aware of what they’re putting in their bodies and caring more about the environment and

alternative products.

AC: That’s a complicated product because most of the stuff you’re talking about right now, we will get into the

idea of gene editing some of these speciality crops, but most of these products, you aren’t going to the grocery

store or the farmer’s market to buy organic soybeans or corn or cotton. These are commodities that are

handled on a different scale and railway cars instead of tables at a farmer’s market. I don’t think the public

perception of the row crop transformation in the history of the United States, that they’ve become this high-

percentage acreage of transgenic crops, is really known. There are people that are going to be against it and

they’ll protest it, but I think the general public isn’t offended by it, or whatever. When you get into the

speciality crops, there is going to be a lot of organic competition, if you’re buying a transgenic lettuce vs an

organic lettuce. I can give you an example. If you could make a banana that never browns or an avocado that

doesn’t go off in five seconds, “It’s not ripe, it’s not ripe, it’s ripe, it’s gone,” then consumers might want that

instead of having to throw away or freeze the bananas for a banana bread. I assume, and this is just my

assumption, that there are two different things. One is the acceptance of the commodity row crops, that’s on

its way, that’s fine, but there’s still a little bit of a battle ahead. I think that, like with the delivery of the pink

pineapple from Del Monte, for instance, it’s selling for USD 50 a pop, you can’t find them, depending on the

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technology, people are intrigued by these types of products.

[00:16:28]

Q: How can GMOs continue to increase row crop yields? Have yields plateaued to a certain extent? What has

been done in row and what is yet to be done across increasing plant size, growth, resistance and harvest

cycles?

AC: One of the ways to look at this, and it makes it very difficult to answer your question, but I’ll explain it,

there’s a professor called, I think it’s Forrest Troyer, and he released this graph of how corn yields have grown.

People first used to just grow corn in open pollinated. They’d have a field of corn, they’d let it grow, they’d pick

the seeds and sell it to you. Every year the yield would be the same on this graph, it would be a flat line. As they

developed hybrid seed, the ability of taking two in-bred parents to create a… This is all non-GMO stuff so far,

this is just plant breeding, they could get a rise in that curve. Then as you added in the ability to add fertilisers

and use mechanisation, like bigger tractors, you got higher and higher yields as you were able to get products

off the field. If you keep following that graph up, it keeps going higher and higher with the development of the

GMO industry in the ’90s, and the yield continues to rise. While it’s hard to tease apart, was it the bigger

tractor or was it the cheapest fertiliser or in 1998, that gave that next bump, there is a clear progression of the

practices in place in modern agriculture for row crops that gave rise to these advances.

You can’t discount plant breeding, fertilisers, tractors, but you also can’t discount the GMO. Under situations

where weed pressure is high, you will get less yield if you don’t remove the weeds. Having a herbicide tolerance

to get a clean field with the one spray is great. It also means, for the farmers, they only have one application.

This is just for yields. If we talk about the ancillary things, like what they cost for input costs, for harvesting,

because these are low-margin crops, they pay a lot to grow it and they only get a little bit more when they sell

it. I think as we get into something like insects, where they would spray a lot of insecticides to control for

them, now they don’t have to. One great example is sweetcorn. You used to have to spray Bts on sweetcorn

every 2-3 days to keep the corn earworm from going in and destroying it. Everyone opens up these sweetcorn

cobs at the grocery store to see if it’s damaged on the inside from a bug, and then they throw it to the side.

When you use a transgenic, you don’t have to do those repetitive sprays because the transgene is already

providing an insecticide inside the ear.

Plant breeding has been giving increases in yield when you look a graph of the production, and I think that will

continue. It gives best yield when there’s pressure. When there are a lot of weeds and you kill them, you get the

best response, and when there are a lot of insects and you have an insecticidal trait, you obviously get the best

response between the transgenic and the non-transgenic. You also lower the input cost for farmers that are

always watching the bottom line between how much they pay for everything vs how much they’re going to get

when it goes to market. These higher yields, lower input costs I think have been borne out by a number of

things, not just going back to this traditional Forrest Troyer graph that you’ve seen in all these publications,

but it’s the one easy way to point at where you see the value coming from GMs.

[00:20:22]

Q: What are the risks to GMO technology? It seems very innovative, but Roundup has faced issues.

AC: I don’t think it’s a worrisome thing with some of these technologies. Of course, you will find overuse of

Roundup has an issue. People are using Roundup in other ways, not just on GM crops. People use Roundup to

control the maturation of some crops. They kill them so they dry down faster, so when they go to harvest a

crop, they can harvest all at once, if you have a variation of varieties. If you use an herbicide in a field of wheat,

you can come through with a combine and everything is the right stage. You can’t blame all of these things on

transgenic crops, but there’s always a concern with technology for these unknown effects. I don’t think that’s

any different than releasing a new herbicide or releasing a new insecticide. You’ve seen big ag companies have

to retract their insecticidal product releases because something fails on it. That’s completely independent from

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GMOs. There are risks out there for every product that anyone releases.

[00:22:06]

Q: Could you elaborate on speciality crop innovation and the opportunities here for GMOs? You mentioned

the pink pineapple trait from Del Monte. How do speciality opportunities interlink with the huge increase in

controlled-environmental farming and mechanical advances?

AC: We’ll move to these topics slowly, but we’ll start with pink pineapple, is just one example of some product

that’s out there, that you can put your hand on, you can envision and everyone can think about it. What you’re

not getting is the next phase of crops. As we look at these, we talk about gene editing, gene editing isn’t just

something new, ag companies have been doing this for about 20 years, it’s just been, I think, the buzz word

right now is Crispr. Almost everyone knows what Crispr is. They don’t really know what it is, but they’ve heard

its name, they know what it is. Really, being able to manipulate gene sequences within plants, there are two

technologies here. These original row crops we talked about that are all herbicide-tolerant, insect-resistant,

that’s the old school way of doing things. It’s not extinct, it’s still valuable, it’s just you put in big pieces of DNA

into your plants, small compared to the genome of the plant, but a big scar in the plant genome, and that

delivers your trait. Now, as we move to gene editing, you’re talking about more surgical precision. We’re

coming in and we’re doing a tiny manipulation, and we can cross away from that gene engineering machinery,

take that out of the line, and all you’re left with is the modification. If you think about it like if you’re over 45

and you had a smallpox vaccine, you probably have a scar on your left arm, and it’s a big one, but now if you go

in to get a vaccination, you just get this tiny needle. As technology advances, the ability to do things neater or

cleaner is there, and as we move to these cleaner technologies, we aren’t coming along with a lot of the baggage

that we’ve used to create it. You just have a few base pairs changed in some of these plants, so they’re maybe a

little bit easier to identify.

The people in this industry are popping up as these small nimble companies that are starting to produce it.

This newer technology is driving a lot of innovation. Most of them are coming out either small start-ups or

larger venture-backed groups, but something like an Inari in West Lafayette or Pairwise in Durham, North

Carolina, or Calyxt in Minneapolis. Calyxt is more of a little older technology called Talen, but they probably

also do some Crispr. Benson Hill does Crispr, they’re in Missouri. These are just some examples, I could name

more, but there are these companies that are going out trying to create these speciality crops using this

surgically precise genome editing. I think that as we look at this, this industry, we’re in a bubble right now,

some of these companies will be gone in five years, but this is the next wave because the type of modifications

they make to these speciality crops are much more palatable to the consumer. You’re not buying something

that has DNA in it, you’re buying something that’s modified.

Honestly, the type of modifications you’re getting are something you could have achieved in traditional

breeding, small changes in DNA is very achievable. I’ll give you an example. If you think about sweetcorn.

Sweetcorn evolved from a mutation. A transposon jumped into an enzyme that creates long-chain starches,

and I’m simplifying it here, but when you knock that out, the simple sugars can’t assemble into these longer

starches, and so when you bite into that sweetcorn that has that mutation, instead of tasting starch, you taste

sugar, so you taste sweetcorn. It’s a small mutation, and everyone loves sweetcorn. There’s no genetic

machinery that got to that, that’s natural breeding, that’s just something that occurred in the environment.

Acceptance of some of these smaller changes through gene editing by these nimble companies, I think that is a

little bit of a direction. When we get to some of the other topics, I can talk more about controlled ag, or when

you’re talking about these vertical farms, that’s a different phenomena, but you still have to get back to the

original technology to generate those products.

[00:27:13]

Q: How hard it is to find specific parts of the DNA to modify? You seem to suggest that we’re early in the

technology, but where else could this be applied? What is the speed-to-market or production timeline for

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commercialising a product such as a colour alteration to soybeans?

AC: There are a couple parts to that. As I said, these row crops, everyone knows the protocols, they’re very

mainstream, a number of people can make it. As you go into gene editing and you try to do these more

speciality crops, you still have to develop the ability to do this, so there’s a little bit of a rate limiter there. The

gene-editing part is fine. What would be an example of something like that? Right now, there’s a large

movement to do a plant-based protein replacing animal proteins in our diet. Whether you agree with it or not,

you can’t deny that everyone is really excited about these impossible meats or Impossible Burger, or whatever

they’re called. I’ve never bought one, but I know there’s a lot of hype around it. To get there, people need to

take traditional crops, crops they know they can grow, like soybeans or pulses or peas, or things like that, like

chickpeas, things that are really high in protein, but they need to be higher. They need to get more, otherwise

it’s not feasible. There’s sort of a minimum. You talk to companies like this that are doing research like that,

they say, “If my technology doubles the protein stored in these crops, then this will be the next big thing in

plant-based protein.” Everyone has got this target. To do that, they’re using, it’s not exclusively gene editing,

people are using more traditional transgene insertion, but they’re using gene editing to play with pathways as

a means to that end, they’re looking at the pathways. The more plants out there that are sequenced, the more

pathways that are known, the more you can go and pick from different knowledge. That’s where a lot of

companies are now using AI to pick their candidate genes, because they’re basically going in and sieving

through these databases to try to find candidate genes that if they knock this out or change this gene, you’ll

have a trait.

It’s not just AI, it’s the new term for a lot of people, there are a lot of academics that are generating research-

based knowledge that, “I know this pathway,” and they can draw it out on a chalkboard for you, or whiteboard,

and point out what gene they think you should manipulate. The end result is when you make these changes,

you might get more protein, when you get more protein, now you’re approaching the product of a plant-based

protein replacement for animal proteins. The timeline for this, all timelines for transgenics are long. The

process of creating a transgenic is a year in itself. The process of generating the candidates, either through

machine learning or the hard, old manner, people write whole graduate degrees on it. The testing of it, once

you have it, that’s pretty fast. You will see everyone claiming that they’ve got some next thing. What that

increase in protein on those crops is will dictate how quickly it’s adopted. If they really double the protein in

soybeans then that will be a product. That’s one candidate. We talked about what are these things that you

could use gene editing for in speciality crops. One is to get increased protein in them so that you can have a

plant-based protein replacement. Another one is herbicide tolerance. We talked about, in the beginning of

this, how farmers had a herbicide-tolerant trait for the last 25 years, and they use a transgene in their plant,

they spray the field once and they don’t have any weeds. You can use gene-editing to achieve that end now too.

Like I said, as more plant genomes are sequenced and more pathways are understood, you can go out and now

sequence, rather cheaply, for USD 1,000, almost anything. If you find a weed that’s growing in a field that is

resistant to a herbicide, you spray the field and that weed is still growing, you can just sequence it and find out

what mutation happened in what gene, you know the candidate genes, and you can identify, “If I just make

these couple base pair of changes, I can generate a resistant trait.” That’s not via traditional transgene, this is a

gene-editing thing now. You can use gene editing to create some of these old herbicide tolerance traits and

they are far more amenable, both for row crops and for specialities. It doesn’t carry around a lot of extra

machinery. It’s just a few base pair changes instead of a stable transformation, the inclusion of a bunch of

foreign DNA into your plant. When you look at industry in the US and probably Europe as well, but mainly the

US, the United States have decided that edited crops, if you get rid of the transgenic machinery, which is very

easy, you just cross it, the site that you’re editing normally segregates from the site you insert it, you can get

these just gene-edited crops, they will be accepted as non-regulated, and so field trials are easier, research is

easier. To the extent that these crops used to take 10 years and USD 100m, I think the speed to getting there is

faster. That gives you two examples, plant-based protein replacements and herbicide tolerance, just as

examples of what people could work on using gene editing. There’s a wealth of ideas out there, I don’t want to

go through all of them, and I can’t talk about some of them because of IP, but you get the idea from those two.

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[00:33:28]

Q: Could you elaborate on rising demand for plant-based proteins and how this is affecting speed-to-market

or overall investment into gene-editing as a way to increase protein?

AC: Plant-based proteins, let’s just say a plant has 5% protein, whatever crop it is, but if you can get to 10%

protein, it makes sense to process that, to turn around and sell it. There’s enough protein in your process now

that it’s economically feasible to do this. You’re stuck at 5%, it’s not economically feasible. If you can go out

and get somebody to change the protein content of your plant through any kind of gene editing or any kind of

research, any kind of plant breeding, then you’ll pay good money for that product because now you can go to

your processing plant and you can get 10% protein every time you turn the crank, and that was what you

needed for your process to be economically feasible. There’s really easy math for a lot of these small companies

to see that if you start with this and you can fiddle with a pathway or add a gene or knock something out and

you can get to 10%, and these are just numbers, it’s not 5% and 10%, but you hear different numbers from

different people, if you can get an increase then it becomes very attractive for people to take off for these

products. The driver is what can you promise? Everyone promises everything, “I’ll get 15%,” but it’s whatever

is the first researcher to get there.

Some of these plants come with different rates of proteins to start with, so they become more attractive. If you

take soybeans, you already have transformation protocols. They’re very easy to work with. If you take

something like yellow pea, it’s a little bit harder to work with because it doesn’t have the history of 25 years of

research, it has a few people working here and there. Some of these crops are just harder to transform anyway.

The speed to market for some of these products is going to be limited by a number of factors, the available

protocols, the experience base, but the pathways are all the same, primarily. The opportunities to affect the

pathways are all the same. If you can do it in soybeans, you can probably do it in peas. It’s just the starting

point. If you’re starting at 7%, it’s a lot easier to get to 10%, so if you start with peas and you have higher

percentage, you could arrive there faster, but they’re a little more complicated. These are the calculations that

are done by those gene-editing companies that are looking for the leap from what we have to what we need to

make plant-based protein a reality.

[00:36:20]

Q: What major issues for farmers could it make sense for ag players to innovate their GMO offerings around,

including insects and weather conditions?

AC: I think we’ve got some already, that farmers want a clean field, they want to one spray, get rid of the

weeds, they have a herbicide tolerance trait. They see the insects eating their plants, they get an insect trait.

Other things that are out there on the horizon are if their products could be consumed easier by the end result.

If they’re going to sell their product to a chicken farm, they want their crops to be either more nutritious or to

be easier to digest. People are looking at these things in their crops. You see all these different reports when

people develop these technologies and industry buying companies that have these technologies, but never see

a large acreage or a large market for it. This pink pineapple is a great example because it’s very easy. “Yes, I

want that.” Maybe you don’t want it, but someone does. Someone is paying USD 50 for a pineapple. I don’t

know why, but it’s pink. If you had some kind of healthier lettuce, that might be like, “This lettuce has got

more,” I don’t know, “folic acid in it,” whatever. Maybe people who don’t like eating kale, if you can get the

nutrition out of a butter leaf lettuce then put that in my smoothie. I don’t know what the driver is going to be,

but I think that the acceptance here, it’s different for the farmers vs for the type of horticultural crops that

we’re thinking about modifying now. Some of the easier ones for this are the plant-based proteins where

you’re going to go through a processing step, and so that might be a bridge. As people are eating the transgenic

yellow pea processed burger, they might be more amenable to starting with the transgenic kale next.

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[00:38:44]

Q: What are your thoughts on innovation around fermentation as a source of growing alternative proteins? Is

this something your less familiar with?

AC: I would put that in less familiar. My bread and butter is making transgenic plants for people for different

ideas. We do a wide range of plants and we service a wide range of markets from academics through

companies, so that’s more my wheelhouse.

[00:39:28]

Q: How are players seeking to encourage consumers to accept GMOs, given we touched on sustainability and

ESG trends earlier? It seems GMO usage is still less common in Africa – why is this the case?

AC: There are a couple. It’s kind of a marketing question. You can eventually sell things to people if you

market it better. In Africa, you’re looking at a lot of smallholding farms, people that don’t have a lot of money.

There’s not a large mechanisation system like the commodity crops in United States. There’s not a weed

elevator in North Dakota equivalent in Africa. They can’t just take their crop and sell it to the rest of the world.

There’s not a lot of mechanisation. Most people own small acreages. I don’t know adopting these crops where

they’re going to pay an extra USD 25 per bag of seed, that they’re going to get that out of there. The converse is

true in countries like Brazil or Argentina, where they have a wealth of land and they have large groups that

own it and that can afford to buy this and sell it. The adoption is higher. Adoption in countries is dependent

upon what the market will bear at a certain point, and then of course there’s still public perception. Some

people are still going to be against something. I think there are two different things in terms of countrywide

adoption, but I think, at the end, the bread baskets of the world will make these row crops that are transgenic.

Not all, they won’t do wheat, but they’ll make corn, soy and cotton because they’re more processed. Not that

wheat isn’t processed, but there’s a special stigma with wheat. We’re starting to see people that want to pay for

these vertical farms, they want to buy their lettuce from five miles away instead of 100 miles away, and I think

that that could be a motivator. If they’re buying some plant-based protein, even if it’s transgenic, they might

think there’s going to be less methane from the beef for the burgers if they just ate something that came from

yellow pea. I think that there are ways forward to achieve acceptance, some harder than others, but I think it’s

possible.

[00:42:17]

Q: How could plants be modified to take in more carbon dioxide than they currently do?

AC: I won’t go down the direction because plants are actually already pulling carbon dioxide out of the air and

releasing oxygen, but if you think about the other things that you’re putting on these plants, if you think about

other ways, right now, if you want to grow a lettuce crop, you’re spraying it and you’re covering it with various

chemicals so that you can grow in the same area over and over and over again. If you can get in to introducing

what before has been impossible or not economically feasible, let’s say, if you can make something insecticide-

resistant, so it has insecticide trait, or you don’t have to spray herbicides on to control weeds, you might be

putting less input, less harmful chemicals on the crop. You won’t have to wash your apple anymore when you

get it from the store, kind of thing. I think that the GMO has that option for that, and now I’m talking about

GMO in general, but GMO now through editing, and as people start to find ways, I still think there’s going to

be resistance or recalcitrance to try the new technology, there’s always going to be that, there’s just no perfect

make-everyone-happy-all-the-time world, but as you start to get these phenomenons, and looking at the basic

positive acceptance of the pink pineapple, and as we start to get into some more of these plant-based protein

replacements, I think you might be pleasantly surprised. I know that’s the spiel they give you. When you go

and interview for one of these companies, which I have, for gene editing, the CEO will tell you how they’re

going to get rid of cherry pits so no one chokes on cherries, and all these other things that they can do to

improve all the crops. It’s a little hard sell to think all of that, but somewhere in there, somewhere in some of

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those promises are things that the market will bear and will become positive things that will go, and eventually

that will be the momentum that’s needed to bring more of these traits forward.

[00:44:48]

Q: How are genetically modified seeds and so on performing in controlled agriculture environments? Is there

a need for innovation here given the plants are growing in seclusion from insects or other factors that could

lower yield or contaminate products?

AC: I’m not sure how much of that is going to happen. When I think of controlled environmental ag or

controlled environmental farming, I think it’s more about other aspects, which is the transportation of their

farm goods. They want less miles from field to plate, in this case not field, but vertical farm to plate, and I

think that’s more of a driver on them for crop innovation, and reward. I don’t think that you’re necessarily

going to get a trait. Unless you make a broccoli that tastes like cheese. I’m being a bit flippant, but there could

be something that you could change in plants that people would really like, something that kids would eat,

that’s healthy, all of a sudden mothers would be buying that off the shelves. If a trait is available, and it is

accepted, I’m sure it’ll work its way into that system as well, but I don’t think that system needs the traits to

make it successful.

[00:46:34]

Q: Are there any underappreciated opportunities in the market, particularly in speciality crops, given you

mentioned Del Monte’s pink pineapple trait? What are you noticing across market leaders?

AC: Everything is an opportunity. Every person that comes to us to ask us to help them with their

transformation, which is your editing, whatever it is they need from us, and that I can’t talk about to you guys

because it’s IP, is interesting. I think, in general, I can talk of generalities where I would say that there are a lot

of people coming from a lot of different ways at plant-based protein. That is the easiest one to get. It goes to

consumers. You don’t have to have public acceptance. There are other places where maybe large-scale farms

that produce meat that own a large percentage of the market would buy it. I know that there are examples of

start-up companies that have (inaudible 47.59) grain that chickens can get 25% more yield if they eat. You’re

not worried about that, you’re not going to consume that transgenic grain, but that grain can be converted into

chicken food that makes someone profit. If they can see that margin, they get 25% more chicken if they spend

5% more on food, then they’ll do it.

These are areas that I think that are outside the public perception, but that industry, either in manufacturing

or in some of the further ways down the pipe of animal feed, will get the early acceptance in. These kinds of

technologies where defined markets exist, if you have a certain percentage increase in a trait, like protein, or if

you have a certain percentage increase, like as in rate of gain of an animal upon eating your thing, and you can

sell it to them for less than what they’re getting, they can see the margin and they can see the positive effect

from that, then I think that’s going to be some of the early places for, and it doesn’t have to be gene editing, it

could be standard transgenics. That’s where I think a lot of their people are going to see some of the early gains

and where I see most of the projects heading, but there are still people out there trying to make the next pink

pineapple. There are some pretty neat traits out there that maybe the consumer will take. If you can make a

vegetable that a child will eat, a mother will buy it. I know I would. I can’t even get my kids to eat potatoes

sometimes. We can fix that with ketchup, but there are other examples like that.

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[00:49:44]

Q: Are companies or institutions creating traits and holding onto this IP or technology and waiting for an

opportunity to capitalise it?

AC: Not necessarily the traits, with the exception of maybe something like hemp or the cannabis market, we’ll

talk about that in a second. I think that most people are trying to put their fence down on the IP landscape and

say, “I own this part of it, therefore everything has to pass through this part, and I’m going to get my royalties

out of this patent.” I think that’s more of it. I think it’s trying lay claim or be the early adopters, the first

movers on some of these crops so they can get out ahead of this bubble that’s behind them. I don’t think

anyone is trying to slow-walk anything, with the exception of some of the crops like cannabis. Cannabis exists

that is either hemp, which is a low THC crop, which is grown in fields, it’s grown for fibre, it’s grown for oil, it’s

grown for a lot of reasons, and then there is the more nefarious, for some places in the world, side of it, the

marijuana portion of it, which has high THC. It’s the same plant, it’s just the regulation of the amount, the

accumulation of that one chemical. I think that there is a bit of difference in speed when working on that crop,

just depending on who you are, but I wouldn’t say anyone is holding it back. It’s more like getting stuck behind

a snowplough. Driving down the highway, you get behind a snowplough and you can only do as fast as the

snowplough is going, the regulatory pressures are probably what’s limiting it, not the companies themselves,

but I think that would be one of the more burgeoning areas for manipulation, for a lot of reasons.

[00:51:48]

NH: I think that’s a good place to end the Interview. Let me close by saying thank you, Alvar, for your time

today. I feel like we went through an entire encyclopaedia or learning course here. Clients, if you would like to

speak to Alvar in a private call or meeting, please let your relationship manager know. Thank you, clients, for

joining Third Bridge’s Forum Interview today. Have a good one.

AC: You too, thank you very much.

Transcription ends at 00:52:08 of the recorded material

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