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Fuel Up With Soybeans

In ancient times, soybeans were known as one of the five sacred grains in China. Today, soybeans are fueling modern society in everything from energy bars to lubricants.

That's exactly the explosive future that Gregory Penner sees for soybeans in Canada. He is executive project director for Soy 20/20¹, a government, academic and industry partnership set up in 2002 to stimulate and seize new global opportunities for Canadian soybeans. Based in Guelph, Ontario, he has had considerable success in growing opportunities for new food and industrial uses for soybeans.

"We've raised significant capital investment for several entrepreneurial companies on the food side of the equation," says Penner. While Penner is a molecular geneticist by training, he has an astute mind for the process of taking scientific concepts from the bench to commercial success. One day, he may be working with companies on formulations to increase manufacturing capability of a new meat alternative. The next day, he may be writing a business plan that allows investors to reap their equity within three years.

"Basically, we help companies manage their project timelines, and assist them in obtaining the funding necessary to aggressively move to market," explains Penner. "We work to minimize the time to market by helping developers manage critical decisions. Part of this task involves getting capital out in front of the product. The soyfood niche will be filled, but we must make sure that Canadian companies are growing faster than competitors."

One of Canada's strengths is its breeding program. For example, work is in progress to develop soy varieties that don't have off flavours when used as a food ingredient. Another goal is to develop varieties that produce soy flours that are synergistic with wheat flours. The overall Soy 20/20 initiative aims to encompass the entire value chain from breeder to food processor.

Soyfoods Canada, founded in 2000, echoes that value chain approach with seed suppliers, soybean growers, food processors and packaging suppliers all promoting benefits of soy products². The association is riding the trend towards more use of soyfoods, one of Canada's fastest-growing grocery categories. According to ACNielsen, sales in tofu and meat analog products, soy beverages and rice drinks have shown an 85 percent increase from 1999 to 2002. Increased growth may come as a result of Ontario repealing the Edible Oil Products Act which used to prohibit blending dairy products with edible oil products. As of January 1, 2005, soy based cheeses can be blended with casein, a milk protein³.

The big question is how to expand the Canadian soybean market that has projected record-high acreages: 2.3 million acres for Ontario, 450,000 for Quebec and 300,000 acres in Manitoba. Land suitable for growing soybeans is not expanding. The answer lies partly in expanding soybean uses where soybeans can be imported for value-added manufacturing whether in food or fuel.

Soy 20/20's vision is being played out with Vancouver-based Linnaeus Plant Science Inc.⁴ This company is working through biotechnology to insert castor oil genes into soybeans. The intrinsic value of castor oil - an unusual plant due to its high level of oleic acid - is that it sustains oxidative stress. It doesn't break down easily. With the tools of biotechnology, soybeans may be able to express the particular castor oil gene that will allow production of the ingredients for motor oil. Those products, Penner points out, currently sell for 1.25 per pound versus 30 cents per pound for conventional soybeans. This is a case study for adding value to commodity crops.

In the past, the soybean market in Canada was based on genetics that enabled short season soybean production. This success was built on food-grade soybean varieties tailored specifically for individual Asian importers. The Soy 20/20 project envisions a future where soybeans will increasingly be used for industrial purposes. Canada has an opportunity to be a first mover in capturing this future, by mobilizing strengths in genetic development to create value-added, industrial soybeans. The Soy 20/20 project is working towards defining a prize for the first commercialization of such a variety within Canada.

Conventional soybeans consist of 39 percent protein and 19 percent oil. If the soybean can be designed to yield more oil and more yield per acre, then an industrial soybean is born. "In the future, farmers may play the oil market rather than the protein market, according to prevailing prices," explains Penner.

The surprise is that while soybean food uses are exploding with new technology that makes soyfood taste good, so are the technologies for industrial uses for soybeans⁵. Penner is so bullish that he looks only at opportunities that will expand soybean cultivation in 50,000 acre increments.

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