Genetic Innovation: Better Seeds to Feed the World [Podcast #105]

Ozan Dagdeviren

Hello and welcome to the Startups of London podcast. I’m your host Ozan and the founder of Startups of London. Today I’m joined by Gilad Gershon, co-founder of Tropic. Tropic defines itself as evolving agriculture and sustaining pupils and planets and they are on a mission to provide productive and sustainable genetic innovation. But that sounds so fascinating. I know a thing or two as a layman about CRISPR and the technologies. I think they were quite popular a few years ago. But as our audience knows we mostly work with tech startups with digital apps and feature lots of. Hi and tech products. So, I think it’s a refreshing change for us to feature a company like Tropic and have Gilad with us here. So, I’m fascinated to see where this conversation leads. Welcome to our chat Gilad.

Gilad Gershon

Good morning. Thank you very much for having me and it’s very exciting to be here.

So, would you like to tell us about the company in your own words?

Sure sure. So, tropic. We’re based in the UK. We have a team of about 150 professionals and we are considered today, one of the leading agricultural and genetic companies in the world. And to give more context about that so our mission as a team. So, we got founded about six and a half years ago with the mission of establishing a world-leading tropic seeds company. Basically, identifying that there is a real need to invest in agriculture creates new varieties of tropical cos to feed what’s becoming almost a majority of humanity. And we saw the opportunity to use some of the most cutting-edge genetic technologies and innovations available in the world but, historically been used a lot in let’s call it more western style but corn and soy cotton to bring them to tops very much interested us like coffee banana and rice. So, we established the company and we started to use a sweet of genetic tools. And you mentioned Crystal’s definitely a very important one of them. In order to create these better varieties of crops for example I mentioned bananas. So, it is very big, very important. And we are today probably on the little front of how to take the banana and through advanced genetics make it more adaptable to an evolving world where now those more issues associated with climate change with diseases. So, again, in short, we use advanced genetics to create a better topical crop.

I have two different threads of questions. One of them is about actually the interesting stuff about building a company in this space and how it works. So, we will dive into that. But before we do that I also would like to just explore for a few minutes. The more ethical and perhaps the political social aspects of this. There’s a certain amount of fear that usually comes with genetic modification GMOs et cetera. But one of the ideas and I would love you to expand on that for us that really changed how I thought about this was human beings have always genetically modified the crops they were using, right? The original banana if you go a hundred years there’s nothing like or like 200 years is nothing like the banana that we can see today it’s just like a much much smaller plant with a smaller edible bit. And it says true for everything else. So, we have been actually genetically modifying through a method of selective breeding I guess. So, we are still doing that but now we are using different tools. So, the first tool is selective breeding. Now we have more and more complicated tools, right? So, first of all, is that the correct way of looking at this? And if so could you perhaps do like a little walkthrough for us for the uninitiated all the tools that we have historically used up to perhaps CRISPR and what type of advantages disadvantages and options they open up for us?

Sure, With pleasure. So, I think that there are a lot of true and important things in what you’ve said but I think there’s also an important song on going through the details because I think the language that we use is quite important that there is let’s call it regulatory implications there. So, if we do kind of a long stride story You mentioned breeding and breeding is something that humans have been doing for a very long time. So, somewhat theory was started about 13000 years ago with the of agriculture. People have been planting seeds and every year taking the seed that all the plants that look better as a bigger grain or the steel and replanting them. And so Thousands of years knowingly or unknowingly humanity breed and created corps that are quite different from what there used to be thousands of years ago. And if you want one example wheat. So, the wheat that we grow today is if you look at the original wheat which is interestingly coming from I think the part of the world that both of us were born is is is very different from what we would see today growing in the fields here in the UK. So, this is breeding over the last couple of centuries became more and more sophisticated. So, even understood the Genetic mechanisms behind it and were able to bring the use this type of section breeding in a more sophisticated way with better impact now so far from breeding and steeling continuous there’s a lot of breeding all over the world today. It’s both practices now. Around the 1950s 1960s, there was a new set of technologies that were introduced around genetic engineering. So, for the first side, people had the tools of the understanding of how to change the genetic makeup on different crops using biotechnology. And later on, I think you mentioned the concept of genetic education or GMO. That kind was a general name for that practice. For example, what we think about today a lot of the time is GMO genetic modification is in scientific will be called transgenesis. It’s basically the practice of taking genes for one organism and transferring those genes through transgenesis into another club or another host. It’s not necessarily sexually compatible. So, for example, taking a gene that conveys some sort of disease resistance from a bacteria and transferring it to corp

To make it more better durable and resistant to infestations and increase the yield. So, basically, increase productivity as just any business would do in a way.

Yes. So, this is the science that started probably in the 1950s 1960s. But don’t catch me on it because I’m not a scientist nor of a historian of science. But what we saw is probably closer to the 1980s 1990s that more and more these types of products made it to the market. And I think at the time there was an issue that some of the big companies that developed these products which I have to say I think are very important products in Arabic today. Around 12% of global agriculture has this GMO classification of transgenic care traits which are very important because they create do create a lot of food and feed a lot of people around the world. But I think for possibly let’s call it the mistakes of the past I think some of these companies could have gotten better in communicating to the public the science behind it. It did create some backlash. I think people were surprised to find out about this transgenes trunk gene in food. And while I will say today that it’s clear that the benefit of that technology was great around the time the regulators responding to the challenges in the public created sets of regulations that make it. Today very very hard to win these types of new products in the market. So, we’re talking about can be about 15 years or 150 million of investment which I think one of the outcomes of that is that if you look today at these types of technologies they’ve been primarily developed the some of the corps that I’ve mentioned cotton etc. So, very large crops. They will justify 150 million investors in creating new products. And subsequently where we see the uses in countries where these hopes are quite big for example in the USA. Now over the last decade or so those data, I want to say an important development in the life cycle with the introduction of cellular new tech. Is genetic and specifically crystal which is probably one of the leading tools there but the cell sign allows us to do these types of genetic changes in corps. First of all very much easier than in the past most sophisticated and more precise. But also in a way that does not require us to bring forward DNA from another host. So, it’s not transgene we don’t take genes from a distant host and bring them to our corp. So, we call it gene editing. And it’s different from genetic modification because genetic modification is a regulatory specification basically. It’s very important. Because if we are GMO then it’s 15 years and 150 million. If we are non-transgenetic and today many many countries consider this as non-GMO. So, our way to bring it to the market is much faster much cheaper while still very much regulated and safe. But what we are doing today is not classified in most countries as gmo. So, that allows us to bring market much.

Sorry to interrupt. I have some questions about that. We’ve talked about CRISPR but for the people who have not heard of it before I would suggest they do kind of like an online search and discover. It’s an amazing technology long story short and please correct me it is basically a cut-copy-paste type of editing tool which actually goes into the DNA. Right. Would you like to add something on that so people understand what you’re talking about here?

Sure. And then I’m more than happy to come back because I think you mentioned about the impact and the ethics of what we’re doing that was want to miss the opportunity to about Please sir. It’s it’s truly is AI technology that became I first turned around it around 2014 2013 and came out from a group of researchers from UC Berkeley the Broad Institute and tune that allows us for the first time we said more cutter would say that based but very very precisely growing side cell a living cell cut DNA in a very precise location. Allowing us to engineer the DNA of that cells for example. I’ll give you a very very basic example of one of the things that we are doing with bananas. So, bananas are a very very large crop the fourth most important food crop on the planet. And one of the genes in a banana or a series of genes that in the banana control the drowning of the banana has to peel it. So, Browning creates a lot of waste in bananas. We’re talking about probably about 50% of bananas that get harvested never getting eaten because they’re wasted in the supply chain with people’s homes. But for Crystal, we are able to cut that gene and slow browning of the banana and the reduced way how Crystal can. But it will take us back a couple of steps backwards also. I didn’t mention that. We generally make the pulses I would say probably just cheaper and faster was the first sign that we could use these types of technologies in corps and just corn and soy. So, for us what really excites us is that we can start using for example in Banana when corps and these are corp. Tremendously important. Coffee is the most consumed beverage in the world after the water rise comes for about 25% of global calorie consumption. So, our mission to a degree is to breed this cycle of innovation and use crystal in order to feed people who are some of the neediest people, some of the people who need this innovation the most in the world. So, from an ethical for the mission for the purpose we feel very strongly about what we are doing. I think we are really making an impact on the world.

I think that was an amazing summary to give me and everyone else an overview of the context in which you’re operating especially how the technology side of it works as well. Just as like a brief gleam glimpse perhaps on coffee and rice is there anything specific that you can tell us in terms of what is being worked on?

Sure. Solid pleasure. So, let’s talk about the rice for a second. Right. It’s quite interesting. We started to work on rice about two and a half years. And I mentioned rice is very important. Colour consumption is 25% of global calorie consumption. When we started to work on rice we spend a lot of time taking but what do we want to do with rice because there are a lot of opportunities but developing each one of these projects can take several years and a lot of investment money. So, for example, the first disease that we’re tackling device is called Rice Blast. So, Rice Blast is a thing that is pretty much present everywhere in the world where you go rice from China India Japan the us et cetera reduces the productivity of the seal but what farmers do today but maybe like fungicide. So, this chemical fungicide kills the family. But they also have. Not the best effect on the environment and biodiversity.

We also ingested as well at the end, right? Maybe a trace amount but still stays there.

I’m less familiar with kind of the down-to-environments of that. But again I think that we would all appreciate less chemicals in the shield for sure. So, what we do is also this first program that we’ve started the device was to genetically engineer the lines so that it’s more resistant to the independently without the need to use chemicals. So, one aspect as you mentioned of course is the reduction of chemical use in the field. And this is these are chemicals again you can imagine how much of these chemicals are used eh that could be also interesting so that you can increase yield. So, for example the UN calls the rice blast is the most important rice disease on the planet. So, if you sold flu rice blast you basically can create raw food to feed about 16 million people globally every year and especially today when food prices are very high and there are starting to be shortages. It’s some very large countries of rice. And again we believe that we can make a very positive impact on the planet.

It’s also good for Greenland to the farmable area ratio as well as making sure the earth itself is sustainable and is not dried up of nutrients in the coming years. So, it has a lot of side benefits I would say as well.

Absolutely. And we can also tie it to climate change because even if we didn’t have climate change it’s we want to reduce the use of chemicals and make the film more productive. But now with climate change, we have less water in many places we have diseases previously people knew how to them and how to conduct them. Up to today some of these diseases are really getting outta them and so we do need good and sustainable tools in order to continue feeling the growing population but also sustainably with good benefits on the planet.

How about coffee? I have so many questions I cannot wait to ask them but I’m also curious about what you’re doing on coffee as well. So, how because I don’t it is just interesting nature of things. You don’t know what you don’t know right? So, I would not be able to tell you a thing. If you ask me the question how do I increase the productivity of rice because I don’t know about the diseases? I don’t think people do so unless they’re farmers et cetera. So, that’s really fascinating. H how would we increase the efficiency and the yield of coffee or make it better? I’m really curious about what you’re going to say.

Absolutely. And I believe in that they very much sympathize with you. I think, unlike a lot of my colleagues who go up farms. I grew up in Tel Aviv in a city. I came to agriculture a lot later in my life. So, the decade of my of me working with the students. I continue to learn and be very fascinated. The bug agriculture now but coffee is interesting. So, I mentioned earlier that coffee is very big. It’s the second most consumed beverage globally after water. Humanity consumes about 2 billion cups of coffee every day. A massive massive consumer market. Eventually, we’re talking about some over 250 billion a year. Some estimate a little bit later than that. But when we go to the seal and this is I think some people are aware of it but it’s just absolutely massive. We have about 25 million people globally. Make the living from growing coffee. And if you add those assemblies there are probably another 100 million people. So, you have 125 million people in the world who rely on coffee cultivation for their livelihood and that’s more than 1% of humanity the reality is that usually many of these farmers and their families are or the poor land of humanity. So, our work in coffee again makes the plant add more value. And I’ll talk about giving you one example of what we’re doing. So, in our view that shifts some of the value from the downstream processing to the sale and allows them to make low money from their bill, they end up sending so that they can use this money to get better healthcare kids to school. Now I’ll give you one example. So, in coffee, we work with a variety of a type of coffee called booster which is about 40% of global production today. And this is the coffee that gets used primarily for instant coffee and correlates to about 40% of global consumption today through very precise gene editing. We can make the coffee a little bit more soluble in water so you can produce more instant coffee for me. So, for example, what you used to need 10 acres of land to produce now you can do it here with nine acres of land. So, it gives the bean more value for the farmer because it can produce more products for me. It can also reduce the amount of land that is used to produce this very very large quality.

We can find the genetic component in the DNA of the coffee bean which makes it more soluble and change that with CRISPR and then turn that into a specific seed or be that is then ideally your product that is sold to the people. Is that how it works downstream? Or something different perhaps.

Exactly. So, in itself already a compound that makes the beads less soluble. So, we use Crystal to shut back down. So, we are not adding anything new real basically to stock something that’s all. Now if it’s also an example of why Crystal this garden is better than breeding. Because you could accomplish the same thing with traditional breeding but corps is a tree it goes relatively slowly to accomplish the same thing with breeding. It could take you easily 25 to 30 years to get to the product. We genetically generally think it’s a lot faster. So, we’re talking about several years and several decades and especially the rate of change today we want to fight climate change today we need we need. So, genetically in this way does allow us to bring that change to the founder. Let’s wait until the time of your grandchildren.

I have so many questions for you and I think they touch upon different sides of running the business. And I will share a few different ideas and options and let you choose which direction you would like to explore. One of them. Going back to the previous topic we’ve discussed this is perhaps touching on the more pr marketing branding side of your business or the reputation side of your business no tool by itself is essentially good or evil but it’s just how people use it right? The atom bomb. It’s the same bit. With a knife, you can use it to make beautiful food or dinner for yourself or you can use it to hurt someone. So, it’s not the tool itself that is good or bad it’s usually the people and the intentions behind it. So, just like that, I think with genetic modification potentials as they’ve opened up in the previous few decades and now What has happened was and I was subjected to this as a student of sociology I’ve heard a lot of tales about companies like the Mon Santos and the others creating crops that are seedless or that require a certain specific dependency. So, just like a virtual product that we buy today would get it’s most of its revenue from a subscription or the add-on. To be able to keep using it or like the printer right? We all buy relatively cheap printers but we have to buy those. Then cartridges which are so expensive and then it creates kind of a dependency. So, this amount of criticism has been I think one of the scars and the traumas of this industry. And I think people had certain reservations because of that. So, this is I think one area of complexity which makes your life I would guess more difficult compared to other less complicated businesses. The second area I think goes to your customers and your distribution channels as well. A lot of small farmers have been at have been taking the load of have been feeding the world essentially if you look back to the last hundred years. But everybody has moved to cities now and the population working in farming has diminished and the state’s support is not as strong as it used to be et cetera. And now big corporations are running most of the farming operations. So, the second. The aspect of this from your perspective is who your customer is. Is it small farmers versus big corporations? How does it change the dynamics and how does it change your structures to reach out to them? And finally the third question I think is about the pricing of the product which are your products the seeds or the beans how do they compare with the competition? Are they seen as this lu? So, are you the Rolex of the seeds? Are you a high-end luxury product? Are you sitting in a place where you are the best value best price slash quality? How does it make sense for them in the long run et cetera? So, three directions I will let you explore but one of them. about your client your clients essentially. The other one is about pricing and the product. And the first one was about the ethical concerns around genetic modification and the way that this has been used and how it affects your marketing npr So, I’ll let you choose what I’m curious to hear all answers.

Sure. So, these are all very good questions. Let me try let’s see. How far can you get? So, I will First of all on the regulatory side. So, I will say that even though we are not regulated as GMOs in the countries where we operate it doesn’t mean that we are not regulated. So, we actually work in a highly regulated industry. So, there are in every country that we go in it’s in Southeast Asia and Latin America the US etc. We operate under very clear regulatory guidelines which are designed in order to make sure to ensure that earth and other companies in the industry they good and healthy and safe products to the market. So, there are absolute regulations and we deal with 150%. This is one part of it but from a public perception that’s complimented and probably even more important. So, when we sat on the company six and a half years ago our will not style in that regard was very simple to develop only products that not only are very good so humanity but also think that we can explain and communicate to everyone. So, I think that when I speak with my mother for example I think she understands very easily that we are developing bananas that have resisted the disease that’s killing the bananas now or rice that make the life of the smallholder farmer a lot easier. And it can use less he or she can use fewer chemicals. So, this has been our compass and I think there are a lot of good companies like us today but also very strong and very good regulators that make only good products make it to the market. So, this is one on a smallholder versus a big corporation. I think the reality of what we’re seeing is that it’s eventually it’s usually a combination of both. So, for example in Banana, you might have a lot of farmers but a dose of that you have a few big banana companies that buy distributed globally and save advice well you literally have hundreds of millions of small older farmers. But there are ways for us that we can approach them more efficiently sometimes with the support of all the bigger distributors or seed companies. So, a lot of the smarts in our business are being able to service the smallholder farm mills which eventually are the people for whom we use our product. Being smart about how we are efficient in approaching them and being able to service them. So, it is a bit of a combination of both. Now from the product itself the pricing eh I’ll give you an example. So, when we develop a new product and for example, I mentioned this disease called Panama Disease. What’s seriously threatening the global banana industry today or banana production? The fourth most important food call. I would say that we lead the global effort in developing sustainable solutions for that disease. There is a tremendous need because people businesses and countries that rely on banana production need a solution and so the is a lot of value for us creating the field. And usually what we do is think about how much value can we create in this farm when then usually make an assumption that we can retain 40 to 50% of this value through sales. And the sale level needs to we do need to leave a lot of the value on the table because otherwise, the farmer would not want to use it. And then depending on the corp we usually have different mechanisms on how to capture that value. Cause banana is the three different from Codery different from rice but there are existing business models. We try when possible not to read those business models but actually to use existing mechanisms especially when you’re talking about tens or hundreds of millions of farmers innovating on the business model can be challenging. So, we create value we assume capturing about 50% of it whether it’s at the point of selling the same or downstream of that true collaboration with the farmer there are also existing business models that allow us to capture that value.

This is an amazing field. and there’s so much to talk about. I have even more questions but I think we ran out of time. So, let me try to cap things off and finalize them with just one last question. When you look at Tropic as a business as the co-founder and their CEO what is the big milestone that you see ahead of you? What is that shining style that you’re rallying the team toward?

It’s very clear to us. We’re working now on getting our first product to the market going to be a banana and we’re hoping to see being planted by farmers in the next two to three years. So, this is for us what everyone is walking for today getting this first product to the of course big pipeline of additional products that follow that. But this is something that we are all working very hard to achieve.

Is there anything you’d like to add? Are you hiring any new people? Maybe sometimes a quick announcement is usually a good resource for people to reach out to you. Let people know if you have anything to add.

Sure. I’ll say something that when we’ll quite well know in the life sciences industry but I will say something that usually surprises everyone when I say that. Think. The UK is probably the best place in the world for a company like us to be and I would say myself had many of our clear people who came or the founding team people came from other Israel or the US, the UK is too much phenomenal because the quality of the talent of the researcher is fantastic and they yield not enough companies shield on this. So, we are growing we’ve grown over the last three years from about 40 people to 150 people and we’ll continue to grow in the future. So, we’re always looking for fantastic researchers and business people who are passionate about agriculture and sustainability in the city business. And we’ll be happy to speak with people who are looking for new opportunities.

That’s amazing. Thank you so much for joining the chat today. I’ve enjoyed our conversation and I’ll leave this conversation becoming more curious about what you’re building here and we’ll follow up on how it’s going to hope. Hopefully, I’ll eat one of your bananas or drink one of your coffees one day and fond to remember this moment as well. Thank you, Gilad for joining today.

That will would be amazing. And thank you very much Ozan for the listeners. Thank you.