Movements at Ginkgo BioWorks, Pacific Ethanol, Lygos, LanzaTech show where the bioeconomy is heading

November 4, 2020 |

What’s in a name?

So many re-naming and brand extension efforts are underway this week, let’s look at those to see what’s working, what’s popular, when it comes to building trusted brands. It’s not a story of technology, but it’s a story of technology acceptance, or as has been often observed elsewhere “Things go Better with Coke”, or as we say in the world of building and financing the bioeconomy, “Things go Better with Koch”.

The Re-Branding: Pacific Ethanol

This past week we reported that Pacific Ethanol announced the company’s strategic realignment to focus on specialty alcohols and essential ingredients as well as its intent to change its corporate name. The company also announced the pricing of a $75 million equity offering and released certain preliminary results for the three months ended September 30, 2020.

If you were to guess that the financing was contingent on the name change, we wouldn’t laugh at you. After all, same thing happened with Solazyme became TerraVia (before it was sold to Corbion).

Generally, name changes come because of a pivot from one product set to another, and a company like Pacific Ethanol has good reasons, if pivoting from fuel ethanol to speciality alcohols, to change the name, and frankly, the problem was the misnomer in Pacific Ethanol from the start. Obviously, biorefineries in the corn ethanol space also produce distillers grains, corn oil, and carbon dioxide.

Companies like POET and Aemetis have had more generic brand names, for that reason. Green Plains used to be Green Plains Renewable Energy and that change helped with the repositioning of that company from fuels to a much more diversified product set. And Pacific Ethanol certainly is in the midst of a pivot. Excluding sales of third-party ethanol marketed by the company’s Kinergy subsidiary, specialty alcohols used in consumer products contributed approximately 45% of the company’s revenues during the first nine months of 2020, compared with only 15% for all of 2019.  

The New Brand: Ginkgo’s gambits

In the case of Ginkgo BioWorks, the brand relates to the underlying technology, and the company has co-founded several allied companies alongside prominent investors to focus on specific product targets, using Ginkgo technology. So, the company launched Motif Ingredients and Joyn last year.

And, this week, Ginkgo Bioworks: announced the launch of bioremediation company Allonnia. Allonnia will create innovative synthetic biology solutions to tackle the growing worldwide challenge of waste management, targeting hard-to-treat contaminants in water, soil, and solid waste. Ex-DuPonter Nicole Richards is the new CEO.

Allonnia is the first to launch from Ferment Consortium (Ginkgo’s investment vehicle focused on leveraging synbio for global challenges). Allonnia will have full access to Ginkgo’s foundries and genetic codebase.The company’s first area of focus will be on establishing more efficient, sustainable, scalable ways to break down PFAS or “forever chemicals.” Existing treatment processes require high energy consumption/chemical use, and sequester/landfill the contaminant rather than degrading it. Allonnia is launching with $40M in Series A funding and backing from investors including Ginkgo, Battelle, General Atlantic, Cascade Investment, and Viking Global investors. 

The Brand Extension: Lygos CBx

Over at Lygos, the company repositioned from renewable chemicals to “speciality ingredients” and lately has expanded its offerings into cannabinoids. This week, the company announced the launch of Lygos CBx, a Lygos company and new website focused on delivering a wide range of high-quality, pure and sustainable non-plant-based cannabinoids.

Lygos CBx is a result of the combination of Librede, the recently acquired NIH-funded biosynthetic company, and the integration of key Lygos technology advances.  Lygos CBx is actively engaging new partnerships and expects to make additional co-development and commercialization announcements before the end of the year.

So, in this case, we have an acquisition which needed to be aligned with the Lygos brand family, at the same time as the Lygos universe of products is becoming more diffuse and, well, universal — after the Big Bang of the company’s formation., there was the inflationary epoch of its technology development, and now there are the individually named and distinct galaxies of its product applications. Lygosians have been busy re-naming the sky to reflect all the places the technology might serve. The link appears to be back to the Lygos brand — so, a technology statement paired with a market served. You could image Lygos Flavors, Lygos Fragrances, Lygos Body Creams, and so forth.

Building the Customer’s Brand: LanzaTech

LanzaTech has been as active as any company in forming partnerships and demonstrating technology that goes beyond the brand it’s built up in offgases-to-fuels. Other waste materials are being converted to fuels. Offgases are being converted to chemicals. Other waste carbon will be tapped to make sustainable biobased materials. As CEO Jennifer Holmgren has wryly observed, “there are no solar yoga pants”.

Most recently, LanzaTech, Total and L’Oréal have premiered the world’s first sustainable packaging made from captured and recycled carbon emissions. The successful conversion process takes place in three steps  LanzaTech captures industrial carbon emissions and converts them into ethanol using a unique biological process. Total and its partner Axens convert the ethanol into ethylene before polymerizing it into polyethylene. L’Oréal uses this polyethylene to produce packaging with the same quality and properties as conventional polyethylene.

And, put this into the mix. Last week, the DOE awarded a grant to a LanzaTech, Inentec, Waste Management, Lululemon consortium, to convert gasified wastes to MEG. Plus, we saw that Mibelle will be using ethanol in their cleaning products.

So, it’s much broader than ethanol-to-polyethylene. It’s not a pivot that needs a rebranding, it’s really a brand expansion to W2X, or waste-to-stuff. In this world, Lanza technology might be used to convert waste carbon directly to stuff, or it may become ethanol first (as an intermediate) because you can move ethanol more efficiently than offgases, or because the chemistry requires two step conversion, to name a few reasons.

How do you brand this? To date, LanzaTech has generally left that up to its customers and partners. Some of the ventures reference ethanol, some mention ’steelanol’ which is cute and memorable. In some cases, the customer brand is not altered at all because of the new production process, it just is added to the brand’s sustainability cred.

There are exceptions to the rule, even in LanzaTech’s world, which partners extensively with the global Virgin brand but has opted for a much lower profile than Sir Richard Branson usually aims for. LanzaTech did found LanzaJet to pursue the production of sustainable aviation fuel from its low carbon ethanol — so, in that case, there’s a brand extension from the Lanza identity.

The Bottom Line

Couple of rules we can glean from these examples. Call them the Immutable Laws of Bioeconomy Growth, Pivoting & Change..

1. Pick a non-specific name for the company, thereby avoiding the need to rebrand later on as the market evolves. So, better Smithia than Smith Biofuels. 

2. Avoid geographic labels where possible. California Biomaterials may prove a pesky brand if a) you leave California or b) you expand beyond biomaterials. And, re-branding if possible but it’s tough and distracting.

3. Add technology specifics to generic brands. No need to match your name to a specific process because you might find your expertise takes you in different directions. Your company should be Whitefox, your product could be Whitefox Membranes because someday you might make Whitefox Flocculators.

4. Brand families matter. Investors may not be enamored with your basic brand, and you may find yourself launching an Allonia to develop applications for your Ginkgo brand. We sure like product families to be better aligned. Better Alonnia, Agredia and Agrobia than Alonnia, Motif and Joyn, in our view. ThoughVirgin Mobile has little to to the Virgin Galactic, Virgin Rail, Virgin Cola or Virgin Air, they drive off each other and share an investment base and an esprit de corps that has done well for investors over the years.

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