Benson Hill, a unicorn no more, is under market pressure

David Nicklaus St. Louis Post-Dispatch

The stock market hasn’t been kind to St. Louis’s first ag-tech unicorn.

Benson Hill, which went public two years ago at a valuation of more than $1 billion, is now worth just $61 million in the eyes of investors. Officials have said they are considering options that could include becoming a private company or selling to a larger company.

The fall from grace of the crop technology innovator can be mainly attributed to bad timing. Just before Wall Street became disillusioned with such deals, it went public by merging with a shell company, called a special purpose acquisition company. Rising interest rates have also made investors less attractive to companies that have been years away from profitability.

Benson Hill bet heavily on the meat-replacement market, which seemed smart when companies like Impossible Foods were market darlings. However, sales of meat alternatives are now declining. Meatpacking giant JBS canceled its plant-based venture, and one analyst has described veggie-burger pioneer Beyond Meat as being in “survival mode.”

The Donald Danforth Plant Science Center’s Plant Growth Facility greenhouses are seen Monday, Aug. 30, 2021, in St. Louis.

Photo after dispatch

This means a year of tremendous change for Benson Hill. Co-founder Matt Crisp resigned as chief executive in June and was replaced by Deanie Elsner, a former Kellogg and Kraft Foods executive and four-year board member.

Elsner, who was named permanent CEO last month, has shifted to an “asset-light” business model, meaning the company will no longer have facilities that process its own crops. It sold a plant in Indiana, and has other plants on the block in Iowa and North Dakota.

Benson Hill purchased the processing plants as part of a “closed loop” model, to provide food producers with assurance that it could provide them with the ingredients they needed.

Currently only 4% of the US soybean crop is used for human consumption. The industry expected this number to increase rapidly, but it did not happen.

For Benson Hill, the answer is to accelerate its entry into the much larger livestock feed market. The company hopes to begin commercial planting in 2025 of a new variety of soybean that provides more protein and is easier for animals to digest.

Benson Hill’s headquarters, 1001 North Warren Road in St. Louis, is seen Monday, Aug. 30, 2021.

Photo after dispatch

For the livestock market, Elsner explained in a phone interview, it makes sense to partner with larger processing firms and abandon the ‘do-it-yourself’ model. “The goal of the closed loop model was always food,” he said. “Our path forward was always that we would move toward an asset-light model as we moved into these larger categories.”

Selling the processing plants will help Benson Hill eliminate debt and meet its liquidity needs that have been due for more than a year. That puts it in a strong position, Elsner said, as it studies options that could include a sale or joint venture. “Today we are a public company and our focus is on becoming a public company,” he said.

It’s a high-profile public company for St. Louis, where Benson Hill employs 161 people and is the crown jewel of the region’s efforts to foster agricultural startups.

“The growth and emergence of Benson Hill was a showpiece for the collaborative ecosystem that has been built in St. Louis to support innovation generally and ag technology in particular,” said Don Rubin, chief executive of industry group BioSTL. ” “They represent the talent, intellectual capital and financial capital that came here and we look forward to seeing them thrive, even if they look a little different than in the past.”

After a CEO change, layoffs and asset sales, expectations for Benson Hill are a little more dim than the unicorn days. However, Elsner remains optimistic.

“It was not my intention to return to a full-time operating role, but I am confident in what we are doing,” he said. “We have an opportunity to create something disruptive and unique in the industry.”

David Nicklaus is a retired Post-Dispatch columnist who continues to follow the St. Louis business landscape.

Rivers, an aquaculture company that raises trout for their meat, like the one in Idaho, uses soy to help flavor its fish. Reverence has struck a deal to purchase specialty soy ingredients from St. Louis “food tech” company Benson Hill. Video by Bryce Gray, Post-Dispatch.

Video by Bryce Gray, Post-Dispatch.