Common enemies

Botry-Zen does have competition. Other botrytis enemies on the shelf include a US-made wettable powder for spray application called Serenade. Organically registered, it also attacks powdery mildew and sour rot. Like Botry-Zen, Serenade is a biological control protectant, says its New Zealand distributor Garry Elliott, of Auckland’s Elliott Technologies.

Serenade has been on sale for two years and sells “pretty well”, Elliott says, though he won’t give numbers. It’s quite expensive – up there with Botry-Zen at around $200 a hectare. But Serenade’s price is due for a big chop later this year due to a new formulation, Elliott says.

Elliott Technologies has also recently registered a fungicidal soap called Protector, which works against botrytis and sour rot. It’s not sophisticated like the biological controls, but at around $80 a hectare, it’s “hell of a cheap”, Elliott says.

And then there’s a home-grown competitor, Sentinel. Developed by Christchurch agricultural products company Agrimm Technologies and Lincoln University, Sentinel was launched in January this year.

However Scandrett says that while there have been other attempts to get a biological solution to grape rot, they have either not worked at all, or have not been successful enough to displace chemical sprays. “Winegrowers are saying, and we are saying, that we have a biological that does the job, and that is what is exciting people here and offshore. People who have seen the last results are saying, ‘Hey, this could well be a clear indication that finally we have a [biological] product we can rely on’.”

Would Morgan buy shares in Botry-Zen? No, he says, but only because he doesn’t “do that stuff”. The occasional Lotto ticket is about his limit.

Botry-Zen could offer strong investment odds for several reasons, according to the company and commentators. For instance, product registration overseas usually takes two years, Scandrett says, but Brussels, home of Europe’s food chain police, has indicated the European Union pathway for biological control agents may be shortened. “If that was to happen it would give us a huge lift. [Registration] could be a year, to a year and a half.”

And Botry-Zen is taking a bold position on price. Scandrett says the company will position its product about 15% below the traditional chemical spray price range.
“One could argue that if we were the same price then why wouldn’t growers grab the biological? But we have taken the view that we can be price competitive and still build confidence in the biological solution.”

Wine industry body New Zealand Winegrowers, which reckons it has directly invested up to $1.5 million in getting the product to the field trials stage, has looked at a range of biological control agents. It concluded that the standout winner for commercial purposes was Botry-Zen, says science and innovations manager Philip Manson. Winegrape Tech, a joint venture between NZ Winegrowers and NZ Grape Growers, gets a royalty payment of 5% of Botry-Zen’s annual sales under a licensing agreement with the company.

Manson says NZ Winegrowers’ “genuine” stake is in underpinning its byline “riches of a clean, green land”, its sustainable wine-growing programme, and the international promotion of New Zealand wines. The Botry-Zen product is “extremely well-proven technology” after more than eight years of research, development and trials, he says.
Manson would be happier if Botry-Zen’s sales progress was burgeoning.

“But when I look at the development process, they’ve done a fantastic job taking something from the laboratory bench to a world-class product. I believe from what they have conveyed to us, they are poised for real action. I would anticipate sales will start lifting over the next two to three years.”

HortResearch business manager Cath Kingston is also impressed with Botry-Zen’s development of a product that had its beginnings in a HortResearch science group. HortResearch’s lab results looked promising and NZ Winegrowers agreed to fund some small field trials. That was in the early to mid 1990s and HortResearch, NZ Winegrowers and Montana Wines embarked on a Technology for Business Growth project to take the sloppy, slimy biological into the field. When the small field trials proved positive, a commercial partner, now the Botry-Zen company, was roped in.

“When you look at what they have done … the important thing to mention is that when you have a live product, the spores are very important and [Botry-Zen] have enhanced the viability of the spores,” says Kingston. “It’s not only made it easier to handle but made the product better.”

The original slimy gunk needed to be kept frozen and only lasted six weeks; the dry Botry-Zen has a shelf life of about eight months. Scandrett says that means the company can manufacture product for the southern and northern hemispheres back-to-back. The manufacturing economies of scale are “very attractive”.

He acknowledges some investors had hoped Botry-Zen would have made more sales by now. “I think there’s been a real drive, and rightly so, to get New Zealand into the biotech sector. But often investors do not recognise the time from product development to market in biotechnology tends to be a good deal longer than in IT. The intellectual property position [with biotech] should be more robustly protected because of the greater time frame to market.”

Scandrett says by the end of March 2010, Botry-Zen could have annual sales of up to NZ$40 million. “That’s a loose projection based on what we see as the potential production in an upscale factory at that time, with quite a low market share projection in several of the key wine-producing international markets.”

But there are still obstacles.

“We will need to have growers embrace the biological option rather than continue to use chemicals. In their hearts they want to go that way, but when you are talking high-value crops you need to be weaned into the biological option … There will be a lead-in period. I don’t see that as a major obstacle.”

Te Mata Estate’s Morgan says he will use biological or “natural” botrytis control as a selling point for his wine when Botry-Zen is the only control used on the estate.
“We have to really see for ourselves if it’s going to work on a big scale and work over a range of seasons. Every year is different. Probably we will use it on a smaller scale over the next two years and if it proves itself, we could go wholesale. The chemical companies are not too happy and some are trying to develop their own biological solutions. But nothing else has been proven long-term.”

So if the good guy fungus keeps winning the war over the bad guy fungus — and can do it all over the world — there will not only be plenty reason to drink the bubbly, but there will be more of it to drink. You’ve got to like that.