A Conversation with Adelheid Kuehnle

INDUSTRIAL BIOTECHNOLOGY: Can you tell us about Kuehnle AgroSystems—how you came to found the company and how its technology and market focus has since evolved?

ADELHEID KUEHNLE: We started Kuehnle AgroSystems, Inc. (KAS) as a biosciences company with the goal of creating and producing microalgae and botanicals with the most desired traits to meet the needs of various specialized global markets. Recently we added botanicals, produced using biotechnology. New product development continues to require strain selection and improvement protocols, resulting in high production efficiency plus along with unique compositions to address complex challenges in health, nutrition (human and animal), and aging.

Our microalgae targets started out with isoprenoids and then very quickly widened to biofuels, as major government initiatives were launched requiring algae expertise. We worked with, and became educated by, collaborators all along the algae to lipids value chain. The company's expansion shifted to additional markets as strategic partnering occurred with large-scale producers and suppliers outside of the energy sector. We have been fortunate to link up with companies differentiated by their track record of offering innovative functional ingredients, “green”operations, and initiatives to valorize their underutilized resources and process residuals. Our patented and patent-pending technologies around metabolic pathways, expression platforms, and scalable bioprocesses support biofuels development and feed ingredients, and we continue to practice these through service agreements. Currently, our primary business model of product sales and technology licenses is manifested through bioproducts for personal care.

As far as founding the company, having a family pedigree of inventors and entrepreneurs made it logical to transition out of academics into business. The former was certainly appealing with the financial security provided by tenure, but at the same time rather frustrating with its many organizational impediments. For me, co-founding Kuehnle AgroSystems was a more satisfying and effective approach to using biotechnology to contribute meaningfully to society.

IB: How do you support a culture of innovation at KAS?

KUEHNLE: KAS takes a cross-disciplinary approach to be innovative in research, product development, and production, employing, for example, microbiology, food chemistry, molecular genetics, and process engineering to create better products faster. The offices have no wall partitions, mirroring our philosophy that opportunities for integrated dialog and brainstorming should have no physical barriers. The staff proudly perpetuates a mindset—originated in our early years—of boot-strapping and flexibility to stimulate innovative technological solutions, lower product costs, and boost competitive advantages. The team is empowered through a distributed project structure, including participation in the business process. We have observed that both our customers and the company benefit tremendously from the trust built through customers interacting directly with the product developer-scientists, a trust that we think leads to speedier development and progressive products responsive to changing market situations.

We are fortunate to have a core team of researchers and founders that has worked together for many years and is as comfortable celebrating successes as they are tackling unexpected obstacles that require a new perspective or change in direction.

IB: What is your current assessment of the state of the biobased products and bioenergy sector? What do you think are the major opportunities and challenges to further advancing the bioeconomy?

KUEHNLE: While industrial biotechnology faces a number of challenges, it is certainly an exciting time to be engaged in the biobased products market. Uncertain regulatory environments, wary venture capitalists, scale-up challenges and longer lead times—these are not unusual by any means. A few items, such as the delayed availability of non-food cellulosic sugars and recent depressed oil prices, may advantage the lower-cost incumbent products for now. But my sense is that the bioeconomy will see incredible growth in the coming years. Customers say they want natural, biobased ingredients, and, contrary to our initial expectations, what we experience today is that they are willing to pay a premium for them. For biological products, the ability to deliver year-round supply and consistent performance is essential to securing customers, while also ensuring product safety and sustainability that resonates with their customers, the end-point consumer.

More and more companies have amazing technologies—just page through the abstracts of Biotechnology Innovation Organization's annual World Congress on Industrial Biotechnology. Through persistence, motivated and agile teams, supportive directors and external champions, companies are systematically meeting the challenge of engaging strategic partners or technology providers at every point of the supply chain—feedstock, engineering, production, market development, offtake agreements. This is an industry that is incredibly adaptable. We've already seen the focus shift from fuels, to drop-in chemicals, and now, to specialty chemicals like food ingredients and personal care products.

So I would say that while there are plenty of challenges, there are plenty of opportunities as well. First, there is an obvious need for renewable technologies if humanity is going to avoid catastrophic climate change. Regulatory uncertainty has been in some ways a barrier to investment, but world leaders are increasingly acknowledging the role industrial biotechnology will play in sustainable development and creating incentives and investment programs to cultivate enabling technologies and supply chains.

Second, there is high consumer interest in biobased products that deliver new functionalities. Something that is simply a biobased one-to-one replacement may not garner a green premium. Renewable solutions that add functionality, however, are in line with consumer trends, plus they help solve a sustainability challenge (which is really a supply issue), and thus will gain margins necessary to fund development. For example, Avantium's polyethylene furanoate (PEF) provides better barrier properties than polyethylene terephthalate (PET) for bottles. They have a major partnership with BASF. Algae-based protein and lipid-rich flour, such as from TerraVia, helps meet consumer desire for increased non-animal-based protein in their diet. And Calysta's single-cell proteins arising from economical methane carbon or Enterra/Entomeal's protein-rich insects (microlivestock), nourished on food waste, can supply approved animal feed ingredients or a source of new enzymes at large scale, help make up for declining natural resources, address waste disposal, and have competitive costs.

So we are definitely seeing opportunities in relevant, addressable, markets. Our own experience in the pull of novel algae-derived personal care products is eye-opening in this regard and highly encouraging.

And I would also add that the impact has yet to be quantified surrounding the new technologies becoming available for engineering organisms, for fermentation processes, and for generating or exploiting abundant, low-cost feedstocks. An unprecedented number of technologies have been developed in recent years that can improve yield, create new target metabolites, develop new production hosts, and increase bug robustness at accelerated rates. This will create a much-needed boost to the economic viability of processes under development.

IB: Where in the bioeconomy do you think algae-based technologies will have the most impact?

KUEHNLE: I should preface my answer to say that it will be admittedly very microalgae-centric. But that shouldn't take away from the fact that the other algae—macroalgae (seaweed)—are already highly prevalent in our daily routines (toothpaste, salad dressing, drink thickeners, sushi rolls, crispy snacks), loaded with minerals and other nutrients, and consumed globally.

Microalgal products already have had human impact for many years and decades. Examples can include in aquaculture and larviculture (such as feed products and ingredients from Reed Mariculture, BioMar, Alltech); nutritional supplements (such as Spirulina, astaxanthin, beta-carotene, from Cyanotech, Earthrise, Cognis/BASF, and cultivated on many continents); and essential ingredients in infant formula (such as DHA oil from Martek/DSM). Of course, fossilized algae have already had huge impact generations ago, giving us diatomaceous earth and petroleum with their myriad applications.

Now, we can build on the great progress in production technologies in ponds and bioreactors, strain development, very large-scale energy-efficient dewatering technology, and cautious but increasing commitments in establishing biorefineries with the promise of cellulosic feedstocks, the opportunities for algal products with additional impact are numerous, far-reaching, and expanding from niche into commodity markets. These include implementing large-scale environmental and industrial/municipal remediation; meeting urgent and increased demand for algae-based fish and other animal feed ingredients (protein, oils, colorants); increased applications for diverse algal pigments, fatty acids, anti-oxidants, and bioactives, such as in skin health and personal care; and algae as recombinant hosts for bioproducts affecting areas such as animal health, crop production, vaccines. This is all well along in the pipeline or even in the marketplace. And then there are really cool future possibilities, such as benefitting eye health through exploiting similarities between algae eyespots and the human retina, or supporting space exploration in which algae can be farmed for food or used to remediate waste or produce drugs on demand.

And yes, many firmly believe that the bioeconomy will include algal-derived biofuels. It is only a matter of time before algal biofuels will become more prevalent as fossil fuels become more expensive and geopolitical scenes shift. The increasing worldwide demand for high-quality, commodity protein tonnage as global supplies dwindle provides the added economic and logistical driver. As evidence: the US Department of Energy continues to issue new requests for proposals for algae-based biofuels along with coproducts for bottom-line considerations; for example, Synthetic Genomics and ExxonMobil recently announced in January 2017 an extension of their biofuels collaboration; and continued interest by a very large liquid fuels consumers (the US military, commercial aviation) in procuring environmentally friendly biofuels bodes well for a firm future for algal biofuels.

IB: Looking back on your career, who or what has contributed to your success?

KUEHNLE: Our early Small Business Innovation Research (SBIR) awards were hugely beneficial to the company in terms of exposure to FAR/DFAR accounting and assistance in business planning. Having the opportunity to work with a couple of Department of Defense prime contractors—General Atomics and SAIC—was also a terrific experience for the team and built valuable, long-term relationships. Exposure to the Defense Advanced Research Projects Agency early on and working towards algae-based biofuels notably under Doug Kirkpatrick, who truly embodied Heilmeier's Catechism, greatly benefitted our project management and organizational mindset. In that time period, we worked with some wonderful individuals dedicated to agritech and industrial biotechnology, such as our former Chairman, Paul Zorner (Finistere Ventures, Locus Agricultural Solutions), and also our collaborator and advisor Amit Vasavada (now with Marrone BioInnovations). More recently, the Hawaii High Technology Development Corporation-Innovate Hawaii Program under the National Institute of Standards and Technology is contributing to our success in high-quality ingredient production in concert with assistance from our valued customers, who inspire innovation and motivate the KAS team every day.

Personally, my PhD advisor at Cornell University's Plant Breeding Department, Elizabeth Earle, was a terrific role model for professional development, she being grounded in the liberal arts, a committed scientist, and a mom. In addition, I am grateful for the opportunity to have worked for more than 20 years in tropical agriculture while a professor at the University of Hawaii, which exposed me to quite diverse and vibrant communities of farmers as well as industrial biotechnologists here and abroad. It is important to continue to support their success for our own benefit. Ultimately, it is through their contributions—be it by creating sustainable energy, supplying accessible protein to feed the hungry, or even providing aesthetic pleasures such as new fragrances—that we can hope to achieve the global common cause of “sustainable harmony”, encompassing political, economic and societal stability.