Using biotechnology to transform agricultural wastes into healthy products.
Pitch us on your solution
We created a sustainable, natural and patented process to transform agricultural wastes into the only sugar substitute that looks and tastes identically to sugar, is ideal for diabetics, low in calories and protects teeth against cavities.
Every year, millions of tons of agricultural wastes are incinerated by farmers, contributing with massive amounts of CO2. Moreover, farmers are unfairly paid and in some countries like Mexico, most of them live in extreme poverty conditions. Finally, diabetes and obesity are drastically growing as there are non-attractive options to stop using sugar. Through our solution, we enhance the economy of poor farmer families by buying their wastes, we avoid pollution and we aid to solve health issues like diabetes and obesity.
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What is the problem you are solving?
Unfortunately, in Mexico we have environmental, economic and health issues that need immediate action. Recycling agricultural wastes is very needed in the region. Every year, over 64 million tons of agricultural wastes are incinerated in Mexico. According to the Commission of Environmental Cooperation (CEC), burning such wastes is a common practice that contributes with 40% of CO2. As this wastes are not valuable for animal feed or compost, farmers have no choice rather than volume reduction through incineration.
Using agricultural wastes as a raw material will avoid pollution and create a new market to tackle economic inequality. Farmers in Mexico are unfairly paid and 60% of them live in extreme poverty conditions.
Finally, sicknesses like diabetes and obesity are drastically growing due to the lack of attractive and healthy options to encourage sugar disuse. Mexico occupies the first place in adult and child obesity with 20% of its population being diabetic.
Although these 3 problems might look like isolated, they can be simultaneously solved through projects that combine science, technology and circular economy principles.
Who are you serving?
We currently work with poor agricultural communities from Puebla, Mexico. In the last 2 years we have paid them over 1,000 USD for their agricultural wastes (corn cob), which means we have tripled their income by buying their residues.
To understand their needs and to collaborate better, we have made a member of their community part of our co-founder team. Since then, we have become close to the community and they have constantly shared different stories of how the money has been used for their children education or for improving their houses. Also, they have constantly mentioned how their health has improved since they don’t incinerate the residues and avoid inhaling all the pollutants.
Also, we have a direct communication with our 3,000 clients; 40% most of them, individual users with diabetes. Although our product is not a medicine for diabetics, the fact that it tastes identically to sugar, encourages our clients to stop cheating on their diet. As a result, their glucose levels are controlled and some of them have stopped using insulin. We are currently working with health organizations to get accurate numbers on the impact of our product in end users.
What is your solution?
We solve environmental, economic and health issues through our technology, business model and product.
Environmental Issues: We employ agricultural wastes as a raw material to produce xylitol, a natural sugar substitute that tastes identically to sugar and benefits human health. We recycle the wastes and avoid that farmers incinerate them, a common practice that generates 40% of the CO2 of the region. Hence, for every ton of product that we make, we recycle 7 tons of agricultural wastes and avoid the generation of 6 tons of CO2.
To process the agricultural wastes we created a patented biotechnological process, with the core step being a fermentation. Our fermentative process is done by a non-GMO yeast at ambient temperature and pressure with low energetic costs. The yeast, our main byproduct, is safe for human and animal consumption and commercialized as animal feed.
Economic issues: We pay poor farmer communities Puebla, Mexico for their agricultural wastes, directly contributing to enhance their economy. For every ton of xylitol that we produce, we pay farmers 500 USD, which means triplicating their income.
Thanks to this income we can share moving testimonies like Ines’, a 6 year girl that change her attitude towards school after being able to buy her first notebook for her 1st grade.
Health issues: Our product, xylitol, is a natural sugar substitute that: is low in calories, ideal for diabetics and protects teeth against cavities. We are the only company capable of doing 100% natural xylitol and the cheapest available, which allows us to take on the sugar market and impact the health of people. For every ton of product that we sell, we benefit the health of at least 3,000 people.
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Where is your solution team headquartered?Mexico City, CDMX, México
Our solution's stage of development:
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Describe what makes your solution innovative.
Our innovation resides on both: our production method and our business model. Xylitol, a natural and beneficial sweetener, is usually obtained through a costly chemical process that is done at high pressures and temperatures. Furthermore, it also promotes deforestation as the most common raw material is birch wood.
After 4 years of lab-work, we created a cheaper and sustainable process for producing xylitol from agricultural wastes. Instead of a chemical method, we created a natural and fermentative process (like making wine or beer) done by a non-genetically modified and unique strain of yeast. The process is done at ambient temperature and pressure, drastically reducing energy costs. In fact, the process is so innovative that it was recognized by the MIT Technology Review LATAM as one of the top 35 innovations of 2017. Our technology has been patented and we currently are the only company that produces xylitol though such biotechnological method.
Moreover, we also innovate in our business model, designed for benefiting our suppliers and clients. We collaborate with poor farmer communities in Mexico for buying their agricultural wastes and in consequence, enhance their economy. Also, we are taking the sugar market by making a version of xylitol as cheap as sugar to benefit the health of millions.
Finally, as we transform wastes into a high value chemical rather than commodities (biofuels or bioplastics), we are creating a new market in Mexico in which such wastes are valorized as raw materials.
Describe the core technology that your solution utilizes.
We created a patented biorefinery process for obtaining xylitol from agricultural wastes. Such process involves 3 main steps:
1) A pretreatment step in which we extract xylose, a 5 carbon sugar, from agricultural wastes. First, we grind the wastes and then we mixed them with water vapor. As a result we end up with a liquor rich in xylose, and a cellulosic fiber which is then used for fueling our furnace.
2) A biotechnological process for transforming xylose into xylitol. We isolated, selected and trademarked a unique natural yeast that makes such bioconversion at high yields. We also optimized the ingredients of the fermentation media for limiting yeast growth and enhancing its productivity which also decreased the time needed for the process. And most importantly, the conditions of the fermentation were designed and optimized for sufficing the metabolic needs of the yeast. In this case, a profile of micro-aeriation was created to promote the metabolic path of bioconversion of xylose to xylitol.
3) A downstream process for purifying and crystallizing xylitol contained on the fermentation broth. The process involves clarifying the fermentation broth by removing the biomass (yeast) through centrifugation, getting rid of the beer-like color through activated carbon columns, concentrating and crystallizing the broth. At the end, we produce a granular, sugar-like xylitol.
To create this process we spent 4 years doing lab-work and required a mixed team of chemical engineers and biotechnologists.
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Why do you expect your solution to address the problem?
Through our technology and business model, we solve 3 different problems:
1) Pollution: In North America, open air incineration of agricultural wastes is still a common practice. According to the Commission of Environmental Cooperation (CEC) this practice generates 40% of the CO2. We employ agricultural wastes as raw materials, and collect those that are usually incinerated and cannot be used as animal feed (for example, corn cob). For every ton of corn cob that we transform though our process, we avoid the formation 900 kg of CO2.
2) Economic inequality: In Mexico, 60% of farmers live in extreme poverty conditions. By buying their wastes at a price of 70 USD per ton, we are already doubling their monthly income. The 13 families of farmers to whom we have paid, have used the money for home improvements or for their children education.
3) Health issues: Mexico occupies the first place in obesity with diabetes being the first cause of death. These sicknesses are rising because, in part, there isn’t an attractive and healthy option to encourage sugar disuse. We are the only company that has created a process for making xylitol as cheap as sugar, which means we can take the sugar market and mitigate diseases linked to excessive sugar intake.
Select the key characteristics of the population your solution serves.
In which countries do you currently operate?
In which countries will you be operating within the next year?
How many people are you currently serving with your solution? How many will you be serving in one year? How about in five years?
Our beneficiaries are the families of farmers to whom we buy their agricultural wastes, and the clients to whom we benefit their health. So far, we have enhanced the economy of 13 families of farmers, improving the living conditions of a total of 52 people. Not only we have doubled their income but also aid to avoid the incineration their residues and the consequent contact with carcinogenic pollutants generated during this practice. Furthermore, we have benefited the health of 3,000 clients that use our product on a daily basis. We are still developing a study to have definite figures on the health impact of our product. However, on the most conservative scenario, assuming that our clients use a daily doses equivalent to a table spoon, at least we will be helping on protecting their teeth against cavities. We have achieves this impact by producing and selling 1 ton of xylitol in the last year.
Our projection for the following year is to produce sell 3 tons of xylitol. This translates in improving the living conditions of 106 farmers living in poverty and benefiting the health of 9,000 people.
Finally, in five years we expect to have fully scale-up and built our first industrial facility, allowing us to produce and commercialize 300 tons of xylitol per year. This implies benefiting the health of over 900,000 people and enhancing the living conditions of over 10,000 Mexican farmers.
What are your goals within the next year and within the next five years?
Currently, our main goal is to scale-up our technological process, moving from laboratory to an industrial scale. This task involves experimental work as well as new research while doing trials on a pilot plant. Today, we can produce 1 ton of xylitol per year and the goal is to gradually increase our production as we do trials on installations with bigger capacities. For the following year, we expect to triplicate our annual capacity. Also, we are working on marketing and sales strategies for having the capacity to sell bigger amounts of product. Moreover, we are also generating new agreements with farmer communities in Mexico to fulfil our demand of raw materials.
In five years, our goal is to have already installed our first industrial facility and start focusing on reaching new markets and replicating the project in other countries by generating partnerships. Our goal is to be already exporting product to other countries in America, Europe and Asia.
What are the barriers that currently exist for you to accomplish your goals for the next year and for the next five years?
The biggest barrier and risk is the technological scale-up. Things always work beautifully on a lab or pilot plant scale (our current status) and it is possible that diverse issues appear as we scale-up, such as: economic feasibility of the project, equipment adaptations or designs are not available on the market and process operations cannot be improved.
All other usual risks have been diminished as we currently have a waiting list of 3,000 clients, have fulfilled all regulations and FDA approvals, and have secured enough funds for this stage of our project.
How are you planning to overcome these barriers?
We have conformed a team with the expertise necessary to overcome any issue that may appear while scaling-up. Moreover, we have built a strong network with mentors from industry and academia that have helped us to create a strategy for the technological scale-up and to identify all possible negative situations.
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How many people work on your solution team?
Today we are a team of 12 people, with operations in Mexico City and Puebla, Mexico. We have the expertise necessary to scale-up the technology and solve all production and operations issues. We are 3 full time cofounders, 6 full time scientists, 1 full time marketing director, 1 part time community manager and 1 part time IT engineer. We also outsource all design related tasks to a publicity agency.
For how many years have you been working on your solution?
2 years as Xilinat (4 years of R&D prior to conforming the startup)
Why are you and your team best-placed to deliver this solution?
Two of the cofounders, Lorena Pedraza and I, invented the biorefinery process for obtaining xylitol from agricultural wastes. Lorena is an academic with over 25 years of experience in scaling-up fermentative processes. We hired and selected a team of 6 scientists (50% PhD´s, 50% MSc) that have combined experience in designing equipment and leading R&D projects in the pharma and food industries. Lorena supervises the advancements of this team.
The third cofounder, Isabella Fernández takes care of all regulations and permits needed for selling our product as a food ingredient. She also directs all supply chain needs: recollection of wastes and their transportation to Mexico City, ordering and storage of materials and distribution of final product. She also supervises the work of our community manager and the IT engineer (for our web and e-commerce platform). Isabella had experience in doing this same tasks at Sabormex, a big ingredient company in Mexico.
I take care of the finance of the company, public relations, human resources, general administration and funding. Often, I also supervise new technological projects, for example, better ways for recovering our xylitol after the fermentation process. Having a technological background with some experience at directing and administrating R&D projects, I am constantly learning how to improve my abilities in finance and general administration.
With what organizations are you currently partnering, if any? How are you working with them?
We are currently partnered with:
-Tecnológico de Monterrey, a top private University in Mexico for the R&D and scale-up.
-We are currently working with 3 companies in the food industry for providing xylitol as an ingredient in their new formulations; however, we can’t disclose any further information without their authorization.
What is your business model?
We are the only company that can produce cheap and sustainable xylitol, making us the most attractive option for a sweetener as our product tastes identically to sugar, benefits human health and has a lower cost that sucralose or stevia.
Our main income is the money generated by selling xylitol to food and oral care producers (B2B) and individual users (B2C). Our current production cost (lab scale), including raw materials, labor, services and selling expenses is 2.4 USD/kg. The selling prices, based on what's available on the market, are: 3.5 USD/kg if sold as raw material (B2B) and 12 USD/kg if sold on retail (B2C, sachets presentation).
Currently, as we have a limited production capacity and a waiting list of 3,000 clients, we sell through our e-commerce platform. As we grow on capacity, we will start shifting to a B2B model as we are certain that we can achieve a greater impact on health if our product is employed in massive amounts by making it a regular ingredient in the food industry.
What is your path to financial sustainability?
Currently, we have enough funds for covering all expenses for bringing our lab work to an industrial scale. For this purpose, we are investing over 300 kUSD in the experimental work and research needed on rented pilot plant facilities. This stage will last almost 2 years (until late 2020).
Once we are certain that our technology is ready for an industrial scale, we will open a series A round through equity to get the funds needed to install our first plant. We expect that the plant will have an annual capacity of 300 tons and that we will need an investment of 5 MUSD. It is also expected that the return of such investment will be achieved in under 4 years.
After we have installed our first plant we will continue to invest our revenues on reaching new markets and replicating our technology in other countries.
Why are you applying to Solve?
Our greatest risk is the technological scale-up, through the MIT & SOLVE network, we can find the right partners and mentors from industry and academia with whom work together. For example, companies in the US (there are none in Mexico) that have extra capacity in industrial bioreactors and that are willing to rent them for us to do some trials of our process.
Moreover, we can find a right match of VC fund that share the human-centered values of the SOLVE community and that will be very necessary for the following steps of out project.
Most importantly, the mentorship given during the 12-month program, will be needed to properly jump to the industrial scale. We are a team of novice entrepreneurs that will use some guidance in how to build an international company while warrantying the integrity of our social impact.
What types of connections and partnerships would be most catalytic for your solution?
With what organizations would you like to partner, and how would you like to partner with them?
We are interested in partnering with:
-Zuchem: they have experience in producing sweeteners in an industrial scale.
-Mondeléz International: One of the biggest consumer of xylitol.
-Coca Cola: Could be great if they can use our product in their formulations.
If you would like to apply for the GM Prize on Circular Economy, describe how you and your team will utilize the prize to advance your solution.
The 50 kUSD price will be used to cover R&D expenses on how to use better our byproducts under a biorefinery scheme. This will allow us to improve our environmental impact and to enhance the economy of our process, allowing us to pay more to our partners (farmers and academia).
- Javier Larragoiti Co-Founder & CEO, Xilinat