Landec goes bananas over polymers

30 January 2007 15:50  [Source: ICB Americas]

Company’s proprietary technology allows produce to stay fresher for longer

SPECIALTY POLYMER maker Landec doesn’t make better bananas, but it has figured out a way to make them last longer.
The Menlo Park, Calif.-based company uses temperature-sensitive, gas-permeable polymer membranes to extend the shelf lives of bananas and vegetables.
Formed in 1986, Landec designs, develops, manufactures and sells temperature-activated and other specialty polymer products for a variety of food, agricultural and licensed partner applications.
The company’s temperature-activated polymer products are based on its patented Intelimer polymers, which differ from other polymers in that they can be customized to abruptly change their physical characteristics when heated or cooled through a preset temperature switch.
Landec has annual sales of around $200m. The company has 130 employees.
In its fiscal second quarter (ended November 26), the company posted a 3% gain in sales to $55.2m while profits improved to $108,000, compared with a net loss of $1m a year earlier.
The company reported in December it had reached a profitable licensing technology deal with Monsanto and also sold its direct-sale seed business to Monsanto for $50m.
“The latest earnings report exceeded expectations,” says Landec president and CEO Gary Steele. “Until recently we weren’t anticipating these two deals with Monsanto. Now we can focus on our food packaging business [Apio] and licensing technology business.”
Steele said the company plans to increase revenues by 10–15%/year. The company will probably wind up with $60m in cash at the end of fiscal 2007, Steele says.
“A couple of years ago we had no cash and were $20m in debt,” Steele notes. “We will look to invest more in R&D.”

EXTEND SHELF LIFE

Landec has a deal with Chiquita to provide packaging for bananas to double their shelf life by up to 12 days.
By extending the freshness of bananas, they can be sold in more remote convenience stores, coffee chains, quick-serve restaurants and drug stores, Steele.
“We delay onset of brown spots by up to seven days,” Steele claims. “These are markets where you really couldn’t get bananas through the distribution chain before.”
The BreatheWay polymer allows oxygen to get into the packages and carbon dioxide to escape to extend the freshness of the bananas. The permeability can vary with the temperature, allowing the packages to breathe more as they get warmer.
Chiquita has been commercializing the packaging for about a year, Steele notes. Chiquita’s goal was to supply more than 7,500 convenience stores bananas using Landec’s proprietary packaging by the end of 2006, according to Landec.
“We are now doing trials with Chiquita in grocery store sites,” Steele says. “Until customers open the package they are still working – the bananas are still happy. You can buy two sets – one for immediate consumption and one for storage.”

FROM BANANAS TO SEEDS

Much of Landec’s business is based on side-chain molecule polymers. “The side chains of one molecule overlap with side chains of another molecule,” says Steele. “The more they overlap, the higher the melting point. Because it is crystalline, they have a very sharp melting point of only one degree or so [versus the broad melt points of other polymers].”
On Dec. 1, 2006, Landec entered into a five-year co-exclusive technology license and polymer supply agreement with Monsanto for the use of Landec’s Intellicoat temperature-activated polymer seed coating technology.
David Taft, Landec’s chief operating officer and head of its technology licensing business, says the seed coatings are used to control germination. The polymer seals the seeds against moisture until they reach a certain temperature.
Landec took seven years to develop the Intellicoat technology.
“Probably less than a thousand farmers use it at this point,” Steele says. “This deal with Monsanto puts us on the map and gives us more worldwide clout.”

Under the licensing agreement, Monsanto will pay Landec a minimum of $3.4m/year for five years.
If Monsanto elects to purchase the technology, Landec will receive an additional $4m in license fees, and the companies would enter into a new long-term supply agreement where Landec would continue to be the exclusive supplier of Intellicoat polymers to Monsanto.
Monsanto will provide R&D funding over the term of the agreement.
Landec has applied its Intellicoat technology to corn and soybeans. Landec and Monsanto will target a wide range of seed applications including inbred corn, hybrid corn, soybeans, cotton and vegetable seeds.
Beyond bananas and seeds, the company began a partnership with Air Products in March 2006 to explore the use of temperature-activated materials in water and oil emulsions for personal care items.
Landec is also exploring temperature-activated materials for activities such as retrofitting sewer pipes, and as a possible replacement for collagen injections.

For the latest chemical news, data and analysis that directly impacts your business sign up for a free trial to ICIS news - the breaking online news service for the global chemical industry.

Get the facts and analysis behind the headlines from our market leading weekly magazine: sign up to a free trial to ICIS Chemical Business.

Printer Friendly