Dear Shareholders,
Benson Hill was founded over a decade ago to modernize our food system in the face of environmental and nutritional challenges. While our technology is sophisticated and highly advanced, our premise is quite simple: Better food starts with better ingredients. Better ingredients start with better seeds.
Given the remarkable power of AI-driven advancements across a wide breadth of industry sectors and the fundamental importance of food, it’s quite amazing that agriculture still relies primarily on a one-size-fits-all commodity system to meet our global food and feed needs—especially given the demands of health- and ecoconscious Gen Z consumers and our changing climate. But that is the modernization currently underway.
Benson Hill is a technology company. Today, we believe we have the most advanced plant breeding platform in the ag tech industry that is actually focused on targeted advantages for specific food and feed end markets. Our AI-driven CropOS® technology platform is based on proven science—genomic innovation has improved food production for thousands of years. What differentiates Benson Hill is our focus on the end customer and the magnitude of food science, ingredient formulation, and consumer sensory data layers that guide our product development.
As Chairman of the Board, I’ve witnessed the creativity and agility of our entire team as we’ve introduced our disruptive technology to the market. Those efforts really blossomed in 2022 and the first part of 2023, as we established a fully functional closed-loop supply chain to translate our seed technology into ingredient products and demonstrate the power of our technology platform. We also established commercial relationships for our Ultra-High Protein and High Oleic Oil soy ingredients with differentiating value propositions of traceability, sustainability, accessibility, domestic sourcing, and higher nutrient densities for the human food and aquaculture markets. And we established a significant licensing partnership with market leader ADM designed to scale our reach in the North American food market and usher in a new frontier of ingredient innovation.
In 2022, proprietary ingredient revenue increased nearly 100 percent year-over-year to $73 million. Consolidated gross profit was approximately $8.5 million, excluding the impact of open mark-to-market timing differences, compared to a slight profit in 2021. In 2023, we are leveraging CropOS, the Crop Accelerator, and our relationships with our grower network to deliver an ingredient proprietary portfolio mix focused on product profitability in the face of global inflation, higher logistics costs, and challenging commodity price market conditions.
Looking forward, we anticipate those same capabilities will deliver increasingly robust advancements to our proprietary data set and product pipeline every year. Let me be specific here:
- On-Farm Performance: We plan to more than double the soy varieties serving our
current ingredient portfolio. We expect soy plants with higher yields and more
diverse planting geographies will reduce our COGS and help expand our farmer
base. - Enhanced Value Proposition: We plan to launch non-GMO and CRISPR-enabled
soy varieties with even higher protein, flavor, and anti-nutrient traits that will
enhance our presence and margin opportunity in the human food and aquaculture
markets. - Access New Markets: We plan to complete the introgression of the Enlist®
herbicide tolerance trait across our high protein soy portfolio with the potential to
open new market opportunities in the vast animal feed markets. We also plan to
launch our first Ultra-High Protein yellow pea ingredients targeting the pet food
market. - Future Opportunities: We plan to bring more innovation to market in the years to
come through a Dual Premium Plus Soybean with the benefit of Ultra-High
Protein, improved carbohydrates and high oleic attributes in one bean.
Our long-term goal remains to be a leader in the evolution of food beyond the current commodity system. We are focused on execution as we scale our current product portfolio and introduce innovative new products to a food system that is, in effect, hungry for change.
I speak for the entire Board of Directors of Benson Hill when I say we are grateful for the dedication of our team and the support of stakeholders who believe in what we are doing to set the pace of innovation in food.
Best,
Dan
Cautionary Note Regarding Forward-Looking Statements
Certain statements in the enclosed letter from the Chairman of the Board of Directors of the Company (the “Chairman Letter”) may be considered “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements generally relate to future events or the Company’s future financial or operating performance and may be identified by words such as “may,” “should,” “expect,” “intend,” “will,” “estimate,” “anticipate,” “believe,” “predict,” “plan,” or similar words. These forward-looking statements are based upon assumptions made by the Company as of the date hereof and are subject to risks, uncertainties, and other factors that could cause actual results to differ materially from those expressed or implied by such forward-looking statements. These forward-looking statements include, among other things: statements regarding leveraging CropOS, the Crop Accelerator, and our relationships with our grower network to deliver an ingredient proprietary portfolio mix focused on product profitability; evolving market conditions and our ability to navigate them; the opportunity of our R&D and product pipelines; advancements to our data set and pipeline; and the scaling of and developments in our ingredient portfolio, including the number of soy varieties and the launch of non-GMO and CRISPR-enabled soy varieties, the introgression of the Enlist® herbicide tolerance trait across our portfolio, and the introduction of dual premium plus soybean to our portfolio; the Company’s expectations regarding its financial and operating performance; the Company’s expectations regarding the future of food production and the industries and markets in which the Company competes; the Company’s outlook and financial and other guidance; and any statements regarding management’s strategy and plans for growth. Factors that may cause actual results to differ materially from current expectations include, but are not limited to: the risk that the Company will be unable to improve its capital structure and liquidity position, whether through the Company’s Liquidity Improvement Plan or otherwise, or otherwise fail to lower the cost of capital, increase return on capital and reduce costs; the risk that the Company will be unable to renegotiate or retire any of its existing debt by entering into an amended or new facility in a timely manner, on favorable terms, or at all; risks relating to global inflation, higher logistics costs, and challenging commodity price market conditions, litigation, complaints, product liability claims and/or adverse publicity; the impact of changes in consumer spending patterns, consumer preferences, local, regional and national economic conditions, crime, weather, demographic trends and employee availability; privacy and data protection laws, privacy or data breaches, or the loss of data; risks associated with the Company’s execution of its executive leadership transition, including, among others, risks relating to maintaining key employee, customer, partner and supplier relationships; and other risks and uncertainties set forth in the sections entitled “Risk Factors” and “Cautionary Note Regarding Forward-Looking Statements” in the Annual Report enclosed herein and in the Company’s filings with the Securities and Exchange Commission (“SEC”), which are available on the SEC’s website at www.sec.gov. The forward-looking statements included in the Chairman Letter are not intended to serve as, and must not be relied on as, a guarantee, an assurance, a prediction, or a definitive statement of fact or probability. Nothing in the Chairman Letter should be regarded as a representation by any person that the forward-looking statements set forth herein will be achieved or that any of the contemplated results of such forward-looking statements will be achieved. There may be additional risks about which the Company is presently unaware or that the Company currently believes are immaterial that could also cause actual results to differ from those contained in the forward-looking statements. The reader should not place undue reliance on forward-looking statements, which speak only as of the date they are made. The Company anticipates that subsequent events and developments will cause its assessments to change. However, while the Company may elect to update these forward-looking statements at some point in the future, it expressly disclaims any duty to update these forward-looking statements, except as otherwise required by law.
