Why Microbial Prices Can Vary Widely… And How to Choose the Right Product

Adapted from the article ‘Why Can Bacteria Culture Prices Vary Widely?’ — posted on MicroSynergies.com

Anyone who has searched for pricing on bacterial cultures knows that price can vary widely from company to company. Why is that? Do some companies simply try to squeeze out more margin than others?

Perhaps there's something else going on that's a little more benign.

Based on over 75 years of experience as a team sourcing and connecting buyers and manufacturers of bacterial cultures, I can tell you that there are several reasons (20 to be exact: see MicroSynergies.com/post/why-can-bacteriaprices-vary-widely for the original article including all 20 reasons) for intra-species pricing discrepancies and these break-out into 3 main categories or themes: quality differences, business model differences, or regulatory differences.

Growth Media

The growth media (or broth) that a microbe grows in is a very particular, strain-specific mix of high-quality nutrients.

Between the initial culturing of the strain, the possible seed fermentation, and the final fermentation at-scale, an organism may finish its growth curve somewhere between 12 to 72 hours. This means that an apples-to-apples comparison of one organism taking 12 hours in a fermenter vs. another at 72 hours results in 6 times the amount of fermentation availability... hence the 72-hour fermentation organism may be 6 times as expensive, all-else-equal.

Yet, this isn't quite the whole picture. What also matters is the yield and concentration of the fermentation.

The yield is the amount of bacteria that can be harvested from the fermentation (usually measured in liters or kilograms). On the low end, a fermentation will yield 2% biomass (e.g. this is

20 liters in a 1,000L fermenter) and will improve from there all the way up to a 6–8% yield. Of course, the more biomass that's produced, the lower the price can theoretically be.

Finally, the concentration of the culture effects the price too. Most commercially viable cultures are standardized at 1E+11 (100 billion CFU/g). To be standardized means that the actual concentration of the fermentation bio-mass needs to be at least at a higher concentration than 1E+11 (e.g. some cultures, such as Enterococcus faecium, Lactobacillus plantarum, or Pediococcus acidilactici can grow to concentrations as high as 6E+11). If you can grow something to a concentration of 6E+11 vs. 2E+11, that means that you can get 3 times as much end-use product out of the same biomass, creating the ability to price the bulk culture lower.

Strain Selection

Microbiologists might select a particular strain based on a metabolite attribute (e.g. what it utilizes or the metabolites it produces) rather than its attributes to be able to simply grow fast, yield well, and concentrate heavily (see above). Or... perhaps an unstable strain was misselected and the resulting fermentations are not where they could potentially be.

Downstream Processing

All-things equal, a manufacturer could have different capabilities when it comes to processing the cultures, including centrifugation, freezedrying or spray-drying (in-house or outsourced), and in grinding and blending, potentially killingoff some of the colonies and finding their counts much lower in the QA/QC process.

CROSS-CONTAMINATION

While rarer-and-rarer these days, there's the possibility that cell counts may be incorrectly elevated because of a cross-contamination of a highly-concentratable organism (e.g. Enterococcus

Brad Glocke President MicroSynergies

Chris Muellenbach Vice President of Marketing and Business Development MicroSynergies

faecium) with an organism that generally yields much lower counts — like a Lactobacillus acidophilus, incorrectly boosting counts and affecting pricing. Of course, quality manufacturers have rigorous standards, QA/QC checks, audits, and related certifications to ensure that this doesn’t happen.

CO-FERMENTATION

This applies only to blends of several different bacteria. In most cases, say if you wanted an equal blend of 3 different bacteria species, the manufacturer would pull these individual cultures from their respective production runs, blend them together, and re-verify the correct ratio of each within the blend. This is the right way to do this: using homofermentation (the process of growing one species at a time) and then incorporating it into a blend with others in a similar fashion.

In some cases, however, companies may opt to save resources by growing all of the organisms in a blend in the same fermentation (cofermentation). In almost all cases, this results in the dominant organism (or the organism that is best adapted to grow within the chosen media) to "take over" the fermentation. Rarely will you ever get the same total concentration or ratios you're looking for with a cofermentation— and yet, growing 3 organisms in a single fermentation is a lot less expensive than going through 3 separate fermentations.

Unclear Or Long Supply Chain

Sometimes appear to have their own fermentation facilities, producing cultures themselves, when in reality, they're simply purchasing the cultures direct from a manufacturer and then reselling them. There will obviously be a mark-up in this situation.

Similarly, there may be a manufacturer of a novel strain (e.g. Nitrosomonas) that sells this organism to another basic manufacturer who adds this to their portfolio of available organisms, who in turn works with a regional distributor of their organisms, who in-turn hires a local agent to market the strain. This example is obviously dramatic, but it serves the point that the more exchanges that occur within a supply chain, the higher the price will be for the final buyer within the chain.

Culture Grade

In almost all cases, a culture going into a human industry (e.g. probiotic supplements, yogurt, cheese, or functional foods) will demand a higher per-kilogram price than the same exact culture going into the agriculture industry, for example, where farmers price-out their costs per acre or animal in pennies-per-day, sometimes out to the fourth decimal place. While non-human industries are still profitable for most manufacturers, they tend to have better profitability in human-related industries.

For this reason, companies may maintain separate price books depending on grade needed by the customer. In addition, there are whole manufacturers that are "agricultural grade" them-selves. Knowing which type of company you're dealing with is important to understanding differences in pricing.

CUSTOM VS. PRODUCTION FERMENTATION

When ordering bulk cultures or concentrates at larger volumes (enough to purchase the total resulting biomass from a fermentation, say, 50 kilograms of concentrated culture from a 1,000L fermenter), a manufacturer can choose from pulling the quantities from their regular, in-production runs or to run a custom fermentation on the customer's behalf.

In most cases, the custom fermentation is at the request of the customer (e.g. to grow a particular strain). In these cases, the laboratory will want to test the strain against certain media components in a benchtop fermenter situation, possibly for multiple iterations in order to optimize the nutrient formula.

In these scenarios, the R&D needed is much greater than in a standard in-production fermentation of an in-house strain with known characteristics and nutrient requirements. This increased R&D resource-demand creates an elevated pricing structure.

Local Regulations

Local regulations, such as safety requirements and growth media mandates may change the pricing of bacterial cultures.

For example, some safety requirements may suggest extra steps in the process, hence increasing overall costs.

Similarly, changes in industry standards in growth media (e.g. moving from animal-based media to plant-based media) may, and has, affected the individual strain's response to the new media (both in a favorable and unfavorable directions based generally on species).

PRICED-IN RESEARCH OR RELATED ITEMS

If a particular strain has been heavily researched by a company, is certified Non-GMO, or has been pre-approved by a particular regulatory body (e.g. OMRI in the U.S. or EFSA in the EU), the resulting costs of business will almost always be priced into the culture's commercial value.

How to Choose the Right Partner

KNOW WHAT YOU NEED… OR KNOW WHAT YOU NEED TO KNOW

Companies of all sizes have needs for microbial products and this means that some of these companies will have hundreds of technical experts on staff who know exactly what type of biological they’re looking for, while others may not even know where to start with the process.

If you fall into the former category, you’ll want to work with a microbial partner that (A) has extensive experience with the organism(s) you’re looking for, (B) can grow them to economical and stable levels, (C) has competitive pricing, (D) can support your project and operations (e.g. customer service, international market access, industry certifications), and (E) has backup plans for your needs in the event that they’re unable to deliver on their original promise (e.g. concentrations or lead time).

If you’re a younger or smaller company, you of course still want to keep these items in mind but you’ll likely benefit from a partner who has (A) an in-depth knowledge of your industry, (B) a wealth of knowledge over a broad range of microbes, metabolic processes, and approved commercial and regulatory applications, and (C) who has the knowledge and capacity to assist with formulation and market approaches.

In either scenario, don’t be afraid to ask “dumb” questions and press a potential partner to explain their science in Lehman’s terms.

Your Best Interests Are In Mind

Of course, all companies are incentivized to present their set of solutions as the right choice— and in fact they may be well-meaning and actually have a great solution for your project. However, it’s good to keep in mind that we all have a tendency to “see every problem as a ‘nail’ when all we have is a ‘hammer.’”

The more diverse a potential partner’s portfolio of solutions in any given area, the more they will be free to truly suggest the most appropriate solution to your project.

In addition, finding a partner who is the right size and has the bandwidth to actually get to know your business is more crucial than it may initially seem... Finding a partner who fits this role will enable you to save lots of time and money both initially and in the long run by (A) listening to what it is you want to create and by recommending the right solution right away - and (B) by being more intimately involved in your business and product vision and keeping on top of possible savings, new customers for you, and new product innovations that are easy to pivot to.

On Top Of The Microbial Pulse

Finally, you should choose to partner with someone who is always staying informed about the cross-section of your particular industry and the microbial industry niches.

This will allow you to make progress further and faster as technology advances, prices and regulations change, and competitive products re- arrange themselves within the landscape of your business’s competitive view.

Key Ideas

Capabilities of the right partner:

Assets

They have the microbes, can get them into the right markets, and know how to help you market products.

Risk

They have a backup plan for your microbe supply.

Dedication

They know your project, market, and have your best interests in mind.

Learning

They live-andbreathe microbes and stay on top of the industry so you can too.