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Eggheads helps curious people in agriculture understand how the egg industry really works and where it might be headed.
Greg Schonefeld:
This morning for breakfast, I had deli ham with Swiss cheese and two fried eggs, fried in butter. How likely is it that there was a Kemin product somewhere involved in the production of at least one piece of that meal?
Dr. Chris Nelson:
Every one of your courses likely had a Kemin product inside of it. So both the ham, the butter, as well as the eggs.
Greg Schonefeld:
I'm Greg Schonefeld, and this is Eggheads. We've talked a lot on the show about the importance of choosing the right feed as a producer. Well, today we're going to talk to someone who built a company that plays a role in the production of most of the staple foods we eat, and they've done that by understanding all the different components of animal feed on a molecular level.
Dr. Chris Nelson:
My name is Chris Nelson. I'm CEO and president of Kemin Industries here in Des Moines, Iowa.
Greg Schonefeld:
Kemin is a global ingredients manufacturer that has a stated goal of getting at least one of their products in every ton of animal feed that's produced.
Dr. Chris Nelson:
Right now, we're about 35 to 40% of the way there, so still a ways to go overall to be able to reach that goal.
Greg Schonefeld:
And reaching that goal means convincing nutritionists at feed mills that Kemin products are the best choice to suit the needs of their animals. And to do that, Kemin makes a pretty bold pitch.
Dr. Chris Nelson:
We make an absolute guarantee to the customer that if they spend $1 with us, they will see a minimum of $2 in productivity gain with their animals. And if they don't, we refund the money.
Greg Schonefeld:
So how does a company make a guarantee like that? Today, we're going inside the science behind Kemin and some of the discoveries that have taken them from solving mold problems in animal feed nearly 70 years ago to quietly touching much of the food we eat today.
Dr. Chris Nelson:
The company was started in 1961 by my father and mother at that time and was really focused, I would say, more on animal nutrition, particularly in the preservation of feed from molds. At that time, aflatoxin had just been discovered in the UK. Nobody had ever heard of this mycotoxin before. And my father had an idea for preventing molds in animal feed using products based on propionic acid, and he introduced a product to do that. And also we were heavily involved in swine feeds and poultry feeds really right from the beginning. So today, about 50% of our business is in animal feed. The other half is in a blend of pet food, aqua feeds, human food, and then human nutraceuticals. Interestingly though, the active ingredients that are used almost in all of those products come back to something that's utilized in animal feed. And so animal feed really remains the core of Kemin's business overall.
Greg Schonefeld:
I thought it was interesting to think back to that period when the mold inhibitors came on, and I understand feed was a different world back then. Could you paint a little picture of that?
Dr. Chris Nelson:
Yeah, I would say feed was a very different world. Animal feed was made literally by thousands and thousands of different companies throughout the United States, sometimes just very locally. And so literally to be able to introduce a new technology like mold inhibitors, one had to go out and visit countless numbers of feed mills, talk to large numbers of people to be able to persuade them that this was a good idea and would also help the overall productivity of the animals that they were feeding by preventing molds. In addition, at that time, grain was harvested at a lot higher moisture out of the fields and then usually dried, sometimes dried correctly, sometimes not. And so again, there was certainly a much bigger threat of molds when we started, that's for certain.
Greg Schonefeld:
But what was the actual impact? I mean, I understand birds were dying during that period and it was traced to this mold issue.
Dr. Chris Nelson:
Yeah. The problem at first sort of surfaced in Britain, in the UK, and it was called Turkey X disease. It was killing large numbers of turkeys and nobody could figure out the reason why. It didn't seem like the turkeys had any sort of virus. There seemed to be no bacterial infection that the turkeys had. The veterinarians were examining the birds, nothing they could figure out. And it was really somewhat intuitive that somebody said, "Well, maybe it's in the feed," and then, "Well, nothing in the feed than normal ingredients. There should be no issue there." But it was noticed that some of the feed was actually molding and there was clumps of feed that were being actually fed to the turkeys. And somebody wondered, "Is there something being made by the mold that is actually harmful to the turkeys?"
And sure enough, the first mycotoxin, aflatoxin that was made by a mold called aspergillus in the past, I should say, the thought farmers didn't think very much, "Well, the feed gets a little clumped up a little bit. Well, let's just break the clumps up. Don't worry about it." Well, now all of a sudden people are realizing, "Maybe there is something wrong with that." That's when mold inhibitors really came on the scene from Kemin to really be able to stop that from happening.
Greg Schonefeld:
Interesting. So what was Kemin's response like? Was it something you read about or somehow learned about it and said, "Hey, I want to find a solution to this."?
Dr. Chris Nelson:
Yeah, it was really an observation made by my father. At that time, he was working for another company. They were selling, interestingly, flavors that go into pig feed.
Greg Schonefeld:
How nice.
Dr. Chris Nelson:
He was hearing about problems and clumping of feed and said... He had a biology degree, and I think he had an idea of how it could be solved, and that's where it really started.
Greg Schonefeld:
And these mold inhibitors then, when are those applied?
Dr. Chris Nelson:
Generally, the mold inhibitors can be applied two times. That is when the grain is first harvested and is going into the bin, it can be applied there, or as the grain is received by a feed mill, it can be applied there. The largest application though I would say is in the feed mixer. When all of the ingredients are being put together, mold inhibitor is usually added there. These days, for feed manufacturers, at the same time, we manufacture a number of our mold inhibitors with surfactants.
Greg Schonefeld:
Sorry, what's a surfactant?
Dr. Chris Nelson:
A surfactant is the chemical name for, say, all of the dishwashing detergents that you have. And basically what a surfactant does is it helps molecules of water to be able to get to things that basically hate water, which we call hydrophobic. So if you take oil and vinegar and try to mix that into a salad dressing, as you know, you shake it up and you can get the oil to mix with the vinegar for a second or two, and then of course they start to separate. If you put a surfactant in, an edible surfactant, what'll happen is when you mix them up, the oil and water will stay together and it helps the mold inhibitor actually to get spread through the corn better. But in the feed manufacturer, what it helps is that as the feed is pressed through a pellet press, there's quite a bit of energy required to do that.
And if you have a surfactant, it basically acts as sort of greasing the feed so it goes through at a lower pressure and thus saves energy for the feed mill.
Greg Schonefeld:
Okay. Interesting. Yeah. Mold inhibitor was kind of intuitive to me.
Dr. Chris Nelson:
Surfactant a little less, a little less.
Greg Schonefeld:
Yeah. One thing that touches on, you guys have a philosophy of one plus one equals three, and this idea that you can take more than one active ingredient and put them together and really create something sort of multi-beneficial.
Dr. Chris Nelson:
Exactly. Mold inhibitors is actually a great example of that is there's a variety of chemicals that we're familiar with that act as mold inhibitors. Acetic acid, which is the acid that's in vinegar, is a moderately good inhibitor, but only of a very particular kinds of molds, for instance. Propionic acid, which you'll find, for instance, naturally in Swiss cheese, Swiss cheese is about 1% propionic acid, that has another set of molds that it's very effective against. And benzoic acid, if you look at your can of soda pop, it's in lots of those products. Again, another set of particular molds or microorganisms it's effective against. What we do is we put, say, all three of these together, and then we have a very broad spectrum overall of effect as a mold inhibitor. And it's been one of the secrets Kemin has had for many years is knowing exactly which ratios get the highest efficacy for the lowest possible cost.
Greg Schonefeld:
Kemin's industry is nutrition, but at the end of the day, they're really in the business of problem solving. Farmers come to them with issues they might be experiencing with their animals, and then Kemin goes about trying to formulate solutions using nutrition. But there's also a good amount of inherent risk there because you could end up sinking millions of dollars of R&D into a product that ultimately might just not work. But Kemin seems to be willing to take on those risks, and that's resulted in some innovations that continue to make a difference in the ag world, including one issue that's been a huge one for eggs specifically.
Dr. Chris Nelson:
In the egg laying industry, control of salmonella in animal feeds is really important because we know that if we get salmonella in the feed, it is possible it's transmitted onto the eggs, and by all regulations, we need to have salmonella free eggs. So one of the products that has been utilized in this area for many years is formaldehyde. Formaldehyde as an ingredient is extremely effective. The problem with it is it's also toxic and it is a known carcinogen in humans. And so to try to put formaldehyde in a feed mill, well, it's possible with a lot of great care, but you have to be extremely careful. So we had a challenge to some of our customers saying, "Gee, I'd like to get rid of formaldehyde. I still have to get rid of the salmonella. Kemin, is there a way that you can make a product that had the efficacy to be able to kill the salmonella, but without the toxicity?"
Now, there had been a number of products also on the market for many years that are low toxicity, but unfortunately they didn't have this great of efficacy as the formaldehyde did. So this was a project given to our chemists. It took about three years, but we have now introduced a product called PROSIDIUM that is now on the market to be able to actually deal with the salmonella, but at a zero toxic level. We're still not quite at the efficacy of formaldehyde. When you're looking for chemicals that kill things, in general, the better they are at killing, the more toxic they are, and so that you can just sort of count on that. So it's not quite to the efficacy, but it's much better than the efficacy that we had before.
Greg Schonefeld:
And formaldehyde, where was that being applied?
Dr. Chris Nelson:
It's added in the feed. In the feed.
Greg Schonefeld:
Oh, it is added in the feed. Okay.
Dr. Chris Nelson:
Yeah.
Greg Schonefeld:
Wow.
Finding an effective and non-toxic way to eradicate salmonella is obviously a huge deal to egg producers, but Kemin's contributions to the poultry industry go beyond disease control to enhancing the quality of the product itself. One example that's had a notable impact on poultry and eggs is the development of lutein. Many in the egg industry might know this molecule is the one that enhances yolk color, but interestingly, Kemin's journey with lutein actually began decades ago in the broiler world.
Dr. Chris Nelson:
It was really in the mid-1970s and really pioneered by Frank Perdue of Perdue Chickens with the idea that a healthy broiler bird is yellow. And the idea behind that was that if the chickens were out wandering in a field, they would be eating a lot of grass. And it so happens that the molecules that make egg yolks yellow are contained in every living green plant. And the primary molecule that does this is called lutein. And so in the late 1970s, early 1980s, we went into utilizing marigold flowers as the source of lutein. In other words, we can't afford to be able to feed chickens large amounts of grass because it doesn't work in their feed and it's not very nutritional for them. But if we wanted to feed them something that would make their skin yellow, marigolds was the thing to do. And so we pioneered a product where we extracted the yellow color out of marigold flowers and it went in the chicken feeds, broiler feeds primarily.
And then at that time, people started saying, "Gee, it'd be good also to do this in layer feeds and to be able to make the layer yolk more yellow." It was then during the 1990s that we discovered that humans needed the same molecule. Lutein actually deposits in a part of our eye called the macula. That's the part of our eyes that's responsible for our ability to read. If you get a disease, you come down with something called macular degeneration. It's the leading cause of blindness in people over 40 years old. And the reason for that is that basically is sunlight contains particular wavelengths that damage the macula. They also damage all plants. And so mother nature came up with this molecule lutein to protect all plants and humans from the damage of the sun.
Years ago, it was mostly people in their 40s, 50s, and 60s that had this macular degeneration. Interestingly, we have seen this start to actually the first signs of it appearing in people in their 20s. And the reason for that is flat screens, whether you're looking at a computer screen or your phone, actually gives off large amounts of the same kind of light that the sun does that is so damaging. So as long as you have lutein in your diet, no problem. The estimates now are that you need about 12 milligrams a day. If you eat an egg that is enriched in lutein, you can actually get one or two milligrams there. So you might have to eat six to a dozen eggs a day to be able to get all of your lutein that way.
Obviously it's contained in all the green leafy vegetables that we have too. So it comes down to a total diet to be able to give it up to the 12 milligrams. Or what we do is we take the same marigolds that we're feeding to chickens, we purify the lutein to an absolute pure level, and then we sell it to nutraceutical manufacturers, so vitamin manufacturers can buy lutein and put into their vitamins.
Greg Schonefeld:
Interesting.
Dr. Chris Nelson:
If you take a Centrum vitamin, for instance, it is in Centrum as a multivitamin ingredient.
Greg Schonefeld:
Interesting.
Dr. Chris Nelson:
Essential for humans, essential for laying hens, probably essential for broilers also.
Greg Schonefeld:
Why marigolds? Just you were able to look across the spectrum of where you find it and this seemed like the best place to grab it from?
Dr. Chris Nelson:
Yeah, it's in actually large numbers of flowers, but it is in much, much higher concentration in marigold flowers. In a ton of corn, you might have three to five grams of lutein and one pound, one pound of dried marigold flowers, you'll have 10 grams. So you can see the concentration difference is dramatic.
Greg Schonefeld:
Unbelievable. Wow. And so Kemin was working with carotenoids then before this lutein discovery, before this health discovery, but then once this health discovery was made in the '90s, I guess, did you see this as something, "Okay, we've really ought to," I don't know, "ramp this up or invest in this."?
Dr. Chris Nelson:
Absolutely. Really, we discovered how to make pure lutein. So the lutein that we have today is plus 95% pure lutein. And by discovering how to make it, then we could offer it into the human vitamin supplement world because now we had it extremely concentrated. If a person only needs 10 milligrams per day, that's a very, very small amount. And so it could be incorporated in any multivitamin or a standalone vitamin. So if you go into almost any drug store today, they will have lutein there and you can just say, "Well, that's the same molecule that makes my egg yolks yellow." And you're exactly right.
Greg Schonefeld:
Yeah. When did you start processing it for human use?
Dr. Chris Nelson:
That was really, we introduced it in 1997.
Greg Schonefeld:
Okay.
Dr. Chris Nelson:
So we're coming on a full 30 years of it.
Greg Schonefeld:
Wow. And almost, I guess about 20 years from when you first started putting it in animal feed.
Dr. Chris Nelson:
Yeah. When we started putting it in chicken feed. Exactly. Exactly.
Greg Schonefeld:
Wow. I understand it's this sort of example where it's something that works well for animals, but then you find the product and then you find that there's other uses for it.
Dr. Chris Nelson:
Exactly right. That's exactly how it occurs. And sometimes it goes the other way. We're finding something that works in humans real well and we ask the question, "How would this work in animals?" And so it goes both ways. So all of these different businesses, we say share molecules and what we like to be expert on is the molecules themselves, how they're made, what the toxicity is, if any, and then how to get them to market overall.
When you deal in biological systems like animals, like humans, not everything is predictable. And so if you understand how a particular product works, and especially at the molecular level, you have a much better chance of being able to get that product to work in the first place. And then, goodness, if for some reason it's not working, you have a much better chance of troubleshooting it. And that's again, one of the secrets of Kemin is really knowing these molecules at a molecular level.
Greg Schonefeld:
Is it possible to have success in this space not knowing things at a molecular level?
Dr. Chris Nelson:
There's a variety of companies that do that. I would say it's mostly by copying somebody that does know it at the molecular level. And so if you copy, yeah, you can probably do that. But your customers then are probably buying strictly on price. And then when they have a problem, they can't go back to that supplier and have that supplier help them with the problem. That's where Kemin comes in and we help with the problem.
Greg Schonefeld:
And it sounds like another interesting product that's related to broilers and layers is chromium.
Dr. Chris Nelson:
Yeah.
Greg Schonefeld:
Can you walk us through a little bit what that does?
Dr. Chris Nelson:
Yeah. This was a discovery that we made a number of years ago was when you look at minerals, the microminerals, chromium has been recognized for many years as being one of those, but not widely recognized. We worked very much through the National Academy of Sciences and worked through to get chromium recognized as a micromineral that is really necessary for all animals in growth. And one of the things that it seems to do is it allows our cells to absorb glucose better. And that of course leads to all sorts of positive things, whether that is in growth, productivity and laying eggs, or the ability to undergo stress. And I think this is in the poultry industry where people have seen a large benefit is that by putting chromium into the diet, their chickens are able to undergo stress much more easily and not suffer as much.
A good example of a stress is heat. Obviously another hot summer and the summer's only getting hotter and hotter throughout the country. What we're recognizing is that chromium in the diet allows an animal to deal with the heat much, much better. And where you may see some productivity loss, you do not see it to the same dramatic stage that you'll see it when no chromium is in the diet. There's a variety of chromiums out there. What we've done is made a discovery of how to make it what is called an organic chromium so that it is absorbed much more easily by whether it's a chicken, pig, cow, or human, much more easily absorbed into the bloodstream.
And so it's been a real product that we've seen has broad acceptance, and especially we're seeing it used by poultry producers worldwide, especially during the hot seasons of the year. And in climates, as you can imagine, Southern United States, Mexico, Africa, India or Asia being used on a constant basis there because it's always warm.
Greg Schonefeld:
You mentioned earlier, okay, I asked you, "Well, if you don't have a science approach, can you have success?" And your answer was, "Well, yeah. Most companies that do, it's because they're copying." Well, I guess one mode of protection can be a patent, but this is one you've had around forever or for quite a while where there's maybe not a lot of life left on the patent or no life, but yet you continue to invest in it.
Dr. Chris Nelson:
Yeah. The chromium's a good example. We did patent that. Patent came off in 2017. And so as a result, there's a number of other suppliers on the market without a question. I think what Kemin continues to do is that we truly understand the molecule, the molecular level. So in this particular case, it's a lot about the quality control. Interesting with chromium is that if you don't do this reaction that I talked about correctly, you actually come up with a toxic form of chromium.
And so you have to be able to A, know what you're doing and doing it, but B, have the analytical abilities to be able to differentiate, do I have the chromium that's safe or do I not have the chromium that's safe? And that's one of the advantages of Kemin. We know these molecules, we've developed the analytical techniques, and that makes all the difference. And being able to give to our customers something that every night they can go to bed and at least they don't have to worry about any of the ingredients coming from us.
Greg Schonefeld:
So patents aside, Chris feels that Kemin's guaranteed quality gives them a leg up on their competitors in the marketplace, but Chris isn't content to rest on his laurels and hope that value proposition resonates. He and Kemin continue to push forward and look for new ways to create value for customers.
Dr. Chris Nelson:
We see still lots and lots of opportunities to raise the overall productivity of animals. Today, as we know, protein, protein, protein, that's all you hear talked about in the main press, how everyone needs protein, which of course we agree with strongly. It's about being able to make protein, whether that's meat, milk, or eggs, make protein at the lowest possible cost. And that really comes into the overall productivity of the animal. And when I think about what's the future, right now, one of the focuses of Kemin is really about the health of the animal and understanding that we have to have animals that have very good health to be able to have maximum productivity. As a result, about 10 years ago, we've started into the vaccine business. We feel that that's a natural adjunct to everything that we do in animal feed. And we see a lot of progression in animal vaccines in the next few years, especially as we see more emerging diseases on the animal side.
In addition, I think that we're realizing, especially in other parts of the world, it's going to be very difficult to continue to feed a corn soybean diet. We'll be able to do that in the United States because of the huge amounts of corn and soybeans that we have. But this simply is not true in other parts of the world, so we're going to have to be learning how to use other ingredients. A big part of that is the addition of enzymes into these feeds, which by the way, can even help corn and soybeans. But as we start to add other ingredients into the feed other than corn and soybeans, the necessity of an enzyme in the feed is really required. We've been selling enzymes actively now for 30 or 40 years, but we're seeing a real emphasis and further interest by feed manufacturers to do it now just to be able to make their feed more overall efficacious for the animals that are feeding.
Greg Schonefeld:
So you're saying that enzymes, I mean, as you're adding nutritional supplements to it, the enzymes actually help them to stick better? Is that-
Dr. Chris Nelson:
Enzymes, of course, are normally secreted by the animal and they digest the feed as they consume it. Now, the animal does not necessarily make all of the enzymes that it needs to be able to fully digest the feed. So if you add an enzyme into the feed, now when it gets inside the animal, it'll digest those parts that the animal normally can't digest. Okay. What that does is, again, lowers the amount of manure, but more importantly, lowers the amount of ingredients, I should say nutrition that's in the manure that should be going into the animal.
Greg Schonefeld:
Ah, okay.
Dr. Chris Nelson:
Let me give you an example. As you know, ethanol has become a huge part of the Midwest. We ferment corn, but not all the corn will ferment, and we end up with something that is called DDGs. And that product, very high in protein, but the animals simply cannot access the protein very well, can't digest it very well. When you decide that you're going to use DDGs in your diet, because it is a low cost protein, lower cost than soybean meal, you can add an enzyme and get almost the same digestibility that you could with, say, soybean meal. So you save the money and make a lower cost material. You utilize a byproduct that is being produced by large numbers of ethanol plants around the Midwest, and it just works in your diet overall.
Greg Schonefeld:
And how much can nutrition... I guess nutrition can move the needle quite a bit on protein. I mean, I guess genetics plays a role and I mean, all sorts of things play a role, but nutrition is a major part.
Dr. Chris Nelson:
Yeah. Normally in animal feeds, we absolutely minimize the amount of protein that we put in. It's the most expensive ingredient that we put into an animal feed. So we try to ask the question, "What's the least amount of protein that I can put into this diet and still get the animals to grow the best?" And so what that means is that you want every molecule of protein digested fully by the animal so it utilizes it. And that's exactly what a lot of the ingredients that Kemin are focused on today is making certain that that protein can be digested well.
Greg Schonefeld:
As I learn more about Kemin, two things really strike me. First of all, the way science has developed over the years. When Kemin started, farmers were barely starting to understand the impacts of mold in feed. Contrast that with Chris today, talking almost matter-of-factly about understanding their products at a molecular Particular level. It really gives you a sense of how much science has taken hold of this part of agriculture. And the other thing that strikes me is the range of impact feed content can have. And not just obvious things like vitamins or protein intake, but things like lowering salmonella risk and helping animals respond to heat stress. I also found it interesting the connection between animal health and human health. When I first looked at Kemin's website, I was surprised by the range of products from eggs to swine to dairy, even to humans.
After talking with Chris, it was clear why. Lutein was a perfect example of a molecule that impacts broilers, eggs, and can provide a direct benefit as a supplement to human diets. And when you consider all of the impacts nutrition can have on both animal and human health, it's no wonder that Kemin products are in use so widely across agriculture and beyond. And now, having covered everything from chromium to lutein and PROSIDIUM, it was time to get Chris's opinion on how best to enjoy some of the fruits of Kemin's labor.
How do you prefer your eggs?
Dr. Chris Nelson:
For me, hard-boiled.
Greg Schonefeld:
Ooh, very simple answer.
Dr. Chris Nelson:
And that's the reason, is the morning when I'm running out the door, I can grab a hard-boiled egg that's been made and I've got my egg for the day or two eggs for the day, and I haven't spent any time at the stove.
Greg Schonefeld:
If you enjoyed this episode, please share it with a colleague or friend. Word of mouth really helps us to grow the show. And to make sure you don't miss an episode, follow us on Spotify or Apple Podcasts. Until next time, I'm Greg Schonefeld and we'll talk to you soon.