The world is changing, and so is Royal Cosun. The almost 125-year-old agricultural cooperative with more than 8.000 growers of ancient crops such as sugar beets, potatoes and chicory, in addition to the production of food and green gas, also sees a future in the development of high-quality and climate-friendly biobased materials. “We believe we can get much more out of plants.”
“Unlock 25 is the appropriate name of the strategy that Royal Cosun established last year,” says Hans Meeuwis, CEO of the cooperative. “The revenue model of our member arable farmers of the cooperative has been under pressure for some time. COVID-19 and the current situation in the energy market have not helped. That is why it is time for a new strategy in which we want to get more value from our crops for the members.”
Royal Cosun is a cooperative of beet growers. Five international companies are part of Cosun, of which Cosun Beet Company (formerly Suiker Unie) and Aviko (french fries and potato products) are the best known. The other companies are Sensus (dietary fibers and sugar substitutes), SVZ (fruit and vegetable ingredients) and Duynie Group (animal feed from residual flows and co-products from food & agriculture).
Growth areas
The new strategy covers all Royal Cosun companies. “The growers own the company,” says Meeuwis. “So the strategy – aimed at higher returns – was also drawn up together with them. They see that the choices we make now improve their revenue model in the long term. Ultimately, the synergy between the companies and the growth priorities that we are now jointly setting should strengthen the entire group. The focus on new growth areas such as vegetable proteins, biobased ingredients and dietary fibers is a good example of this.”
Business model of biobased
Meeuwis sees that the market's interest in biobased materials is high. Shampoos, shower gels, day creams, detergents and dishwasher blocks increasingly contain functional components based on sugar beet instead of petrochemical ingredients with a relatively large CO2 footprint. “This shift is the result of increasing concern about climate change,” says Meeuwis. “But the business case must also be right. For this you have to be able to produce on a large scale.” An ingredient that already works well with this is Betafib, a natural thickener made from pulp, a residual stream from the sugar beet. This has applications in non-food products such as skin care, paint and building materials. Food applications are also conceivable in the future, but they are not being worked on at the moment. “Betafib's revenue model looks good, but we obviously need more of these types of innovations.”
Vegetable proteins
Another crop with a lot of potential is chicory. The carrots contain dietary fiber that is good for your intestines. They can also be processed into a sweetener that serves as a sugar substitute. Royal Cosun is also active in the processing of fava beans into vegetable proteins for dairy substitutes. Fava beans are protein- and fiber-rich legumes commonly used in Middle Eastern cuisines. Cosun Beet Company is even looking at the possibilities for developing the vegetable protein Rubisco, extracted from beet leaves. Meeuwis: “In this way we contribute to the protein transition, in which we work towards the use of more vegetable proteins. We also produce 6 million tons of biomass residual flows every year. Upgrading that flow into usable ingredients for food, feed (animal food, ed.) and non-food applications is the holy grail as far as we are concerned. It hardly gets more beautiful.”
Green gas
Royal Cosun now uses a large part of all residual flows to produce green gas through fermentation. The cooperative is currently one of the largest green gas producers in the Netherlands. But focusing more on processing residual flows into usable ingredients means less raw material for producing green gas. “Given the current energy crisis, we desperately need our own green gas,” says Meeuwis. “The alternative is to buy gas, but that is very expensive. Unfortunately, in the short term this means slightly less focus on producing biobased materials. So that is quite a dilemma.”
Clarity for the farmers
As far as the cooperative and the member arable farmers are concerned, Meeuwis sees that growers are struggling with the uncertainty of robust government policy to make agriculture more sustainable. “The farmer wants prospects for the future. And as long as this is lacking, the willingness to start all kinds of sustainability innovations is limited. As a cooperative, we have an important role in conveying this message to the government. Collaboration between the cooperative, growers, processors and government is essential for further steps in sustainability.”
Agricultural subsidies
Agriculture needs initiatives that can stimulate sustainability in the sector, says Meeuwis. He cites an example from Germany, where farmers receive significant subsidies if they grow protein-rich crops. “Ultimately, every revenue model must be self-sustaining, without subsidies. Otherwise it is not a revenue model. But you do need a kickstart to make something like this profitable. A starting subsidy helps with this. This is how you initiate the cultivation of new crops that are so important for the protein transition.”
Grower notices climate change
Apart from the worries about policy and regulations, the grower also directly faces the challenges of climate change in the Netherlands. Because although we are largely spared hurricanes and forest fires, the consequences of a changing climate are noticeable. Meeuwis: “We are increasingly confronted with extreme weather conditions. Long periods of drought alternate with short-lived, intensive rainfall. This capriciousness causes crops to be damaged or diseases to develop. Crop protection products are partly used for this purpose, but we also have the ambition to reduce their use.” For the longer term, Royal Cosun is conducting research into crops that are better able to withstand this new, turbulent weather type.
Adaptability
Ultimately, a transformation will take place, both in terms of climate and in society. Meeuwis: “And that shift will influence what grows in our fields. This requires adaptability, which applies to entrepreneurs, our growers and us as a cooperative. With our new strategy we now know which direction we are heading: healthy, sustainable, innovative and with good earning potential. We are convinced that this is the future.”
Author: Teun Schröder. Source: Change.inc
