A fundamental shift is underway in how food, flavor, cosmetic and fragrance ingredients are being produced for global markets. The new game in town is biosynthesis – the artificial production of key compounds by synthetically engineered organisms. While consumers, farmers and the natural world have already had to grapple with the impacts of the last synthetic revolution (synthetic chemistry), which has created many toxic, harmful or noxious substances and polluted systems, this next synthetic revolution (synthetic biology) is set to have equally disruptive effects. These impacts range from safety and environmental concerns to very profound social and economic upturning of livelihoods and landscapes.
At the sharpest end of this disruption are the farmers, growers, pickers and harvesters, particularly in the tropics, who provide the natural products that make up the ingredients in our foods, cosmetics, soaps, textiles and more. Consumers and workers will also be affected.
In this report ETC Group presents a series of case studies outlining ways that specific products are being bio-synthetically created, and how current livelihoods from traditional agricultural production may be adversely affected as these synthetic biology-based substitutes for high value commodities enter the market. Several of these synthetic substitutes are already in commercial use; some taking major market share already; and many more are rapidly headed towards commercialization, potentially displacing the work of already marginalized peoples in their wake.
What is Synthetic Biology?
Synthetic biology, dubbed “genetic engineering on steroids,” broadly refers to the use of computer-assisted, biological engineering to design and construct absolutely novel synthetic biological segments, devices and systems that do not and never have existed in nature; it also refers to the redesign of existing biological organisms using these techniques. Synthetic biology attempts to bring a predictive engineering approach to biological genetic engineering using genetic “parts” that are thought to be well characterized and whose behavior can in theory be rationally predicted.
“The overall aim of synthetic biology is to simplify biological engineering by applying engineering principles and designs—which emanate from electronic and computer engineering—to biology.” 
The Switch to Ingredient Markets
Over the past decade, before world oil prices plunged, fledgling syn bio start-ups (with the financial backing of fossil fuel corporations) made grandiose claims about using designer microbes to produce plentiful, low-cost biofuels in giant fermentation tanks. Manufacturing petrochemical substitutes at commercial scales proved elusive, however. Now with energy markets sputtering, most syn bio companies are giving up on biofuels and turning to high-cost, low volume flavor and fragrance molecules that can be economically produced in smaller batches. 
Biodiversity – especially exotic plants and animals – has been the source of natural flavors and fragrances for millennia. Plants, animals and microorganisms are prolific generators of bioactive flavor/fragrance compounds, known as secondary metabolites, that, once extracted, are widely used in food, feed, cosmetics, chemicals and pharmaceuticals. The world’s largest flavor and fragrance corporations are eager to partner with synthetic biology companies because of increasing production uncertainties caused by climate change, as well as the alluring potential of securing cheaper, uniform and more accessible sources of economically desirable natural ingredients.
The world’s largest flavor and fragrance corporations are eager to partner with synthetic biology companies because of increasing production uncertainties caused by climate change, as well as the alluring potential of securing cheaper, uniform and more accessible sources of economically desirable natural ingredients.
With synthetic biology, the goal is to produce high-value flavors and fragrances by using engineered microbes instead of relying on expensive botanical imports or conventional chemical synthesis. The biosynthetic manufacturing platform involves engineering genetic pathways in microorganisms. Scientists and software engineers are tweaking the DNA of existing microorganisms as well as designing new ones from scratch. In the words of one industry analyst: “There is potential for biosynthetic routes to completely replace any natural sources.” – Kalib Kersh, Lux Research, quoted in Chemical & Engineering News. 
Metabolic Pathways to Everything
Even though plant product metabolism is extremely complex, with advances in molecular biology and engineering, researchers are attempting to pinpoint the precise biochemical instructions in the cells of a living organism that result in the production of bioactive molecular compounds. In one well-studied plant, Arabidopsis thaliana (a.k.a. mouse-ear cress or thale cress), at least 20% of the genes are thought to play a role in the biosynthesis of secondary metabolites.  The complex interaction of genes and enzymes in their natural context all play a role in the plant’s “metabolic pathway” – the means by which it produces a useful chemical compound.
Using “metabolic pathway engineering,” synthetic biologists are turning microbial cells into “living chemical factories” that can be induced to manufacture substances they could never produce naturally. To date, synthetic biology firms are honing in on the best-known metabolic pathways such as terpenoids, polyketides, alkaloids – these pathways are the keys to producing tens of thousands of natural product families at the molecular level.
To scale up the production of a desired compound, the novel biosynthetic pathway (constructed with synthetic DNA) is inserted into a microbial host (yeast, bacteria, fungi or algae strains, for example) that feed on plant sugars in giant (e.g., 200,000-litre) fermentation tanks. In the words of synthetic biologist Jay Keasling: “We ought to be able to make any compound produced by a plant inside a microbe.” 
The engineering of microbes for industrial purposes is nothing new, but synthetic biology start-ups are accelerating the process with computer engineering principles and highly automated, robotic systems. In a mostly random process, software-directed robotic systems design, build, test and analyze DNA sequences and active compounds to identify promising candidates and optimize biomolecular pathways in microbes. Despite the staggering complexity of biological systems, synthetic biologists compare themselves to industrial product designers: “This design strategy can be likened to building millions of variants of a chemical factory, selecting or screening for control system variants that yield the most product and discarding all but one or two of the most productive designs.”  One synthetic biology company refers to its employees as “organism designers” who work in a “foundry,” not at a lab bench. 
In the words of one venture capitalist, Bryan Johnson, founder of the OS Fund, the ultimate goal of syn bio is
to control biology and make it predictable: “We aren’t there yet with biology… I can’t just sit down and program
biological code to create a particular outcome on a more complex scale. What’s standing between us making good
use of that is our ability to make it predictable.” 
Despite the techno-rhetoric, the design and control of synthetic organisms is far from routine, simple or inexpensive. Biosynthetic pathway engineering is highly complex. Just two examples:
- Researchers at Amyris, Inc. (California) successfully engineered the metabolic pathway of yeast to produce artemisinic acid, a precursor of artemisinin, an effective drug to treat malaria, which is typically sourced from
the Chinese wormwood plant.  The biological engineering involved at least 12 new synthetic genetic parts  (and more than $53 million in research grants ).
- Evolva (Switzerland) commercialized a proprietary yeast biosynthesis platform for the production of vanillin – a key flavour compound in natural vanilla. In 2009 researchers disclosed that construction of the denovo pathway in yeast incorporates bacterial, mold, plant and human genes. 
Both products are now commercially available and intended for human ingestion.
Industry’s Synbio Advantage
For the industrial flavor / fragrance industry, the synthetic biology platform could offer two major
- The potential to secure more uniform, uninterrupted supplies of high-value raw materials in factory-based fermentation tanks. In other words, companies would be unencumbered by climate, weather, crop failure, price and political volatility or the logistical complexity of sourcing raw materials from farmers and other suppliers in remote locations.
- The ability, under current regulations in the USA and Europe, to market biosynthesized flavors and aroma compounds as “natural” products.  In other words, biosynthetic products manufactured via microbial fermentation are deemed “natural” or “substantially equivalent” to a botanically-derived product. In contrast, chemically synthesized flavors/fragrances derived from petroleum cannot be labeled “natural.”  Research shows that consumers have a strong preference for the “natural” label – despite the murkiness that surrounds it. One survey indicates that almost 60% of consumers in the United States look for the word “natural” when they shop for food products.  Because regulations governing “natural” products specifically permit “fermentation” and “microbiological” processes, the biosynthesis of flavor/fragrances in engineered microbes is not only positioned to compete with natural, botanically derived counterparts – they will also have an advantage over synthetically derived flavors/fragrances.  The bottom line: consumers will have no way of knowing if a “natural” flavoring or scent is derived from industrial, genetically engineered microbes or from a traditional botanical source.
Answering the Hard Questions on Synthetic Biology
Do synthetic biology-derived ingredients pose a threat to human health or the environment?
Synthetic biology techniques are more powerful than previous genetic engineering techniques, but threats will depend on each specific application. There is little or no data on long-term impacts (including health risks) from various applications of these techniques, as well as no regulations. Synthetic biology organisms may produce novel contaminants and could have significant implications for ecosystems if they are released or escape into an ecosystem and continue to multiply. There are also overall impacts on farmers, land use and concerns about the consolidation of corporate power over so many commodities.
If the production is contained in vats, are there safety risks? There is insufficient understanding about synthetic biology techniques or about how to contain the engineered organisms. Although some production of synthetic biology organisms (algae and yeast) is done in factory fermentation vats, organisms and viruses even from high containment laboratories routinely escape through human error. Commercial synthetic biology facilities are not necessarily containment facilities, and synthetic biology facilities have already experienced spills and escapes of synthetic biology organisms. These organisms are alive and can evolve, recombine, or change.
Is synthetic biology more “sustainable” because it’s “natural” and “bio-based”?
Several synthetic biology companies are misleadingly marketing their ingredients as “sustainable,” “natural” and “bio-based.” For example, although the synthetic biology-engineered organisms carry out fermentation, a natural process, the organisms themselves are highly unnatural and synthetically constructed.
The term “bio-based” refers to the sugars – including cellulose – that synthetic organisms consume. However, bio-based does not always mean “sustainable” or ecologically responsible. Debates over biofuels and bioenergy have shown that the chemical and water-intensive agriculture used to grow the plant sugars (such as sugar cane or GMO corn) are not sustainable. In addition to their significant ecological impacts from chemical contamination, these feedstock industries are associated with destructive forestry operations, land grabs and land clearances.
Some synthetic biology companies claim that the ingredient synthesized replaces one that would have been unsustainably extracted from the wild – e.g. palm oil. However, these claims are questionable and do not consider existing alternatives; they need to be carefully scrutinized.
Consumer demand shapes industry – (cc) Hazel Isles
If the synthetic biology-derived ingredient is “nature-identical” to the botanical version, what are the concerns?
Most of the synthetic biology-derived ingredients currently being produced are for single flavor, fragrance and cosmetic compounds such as vanillin (vanilla flavor), nootkatone (grapefruit flavor) or squalane (moisturizing oil). Natural products will usually have a much more complex array of compounds and so the quality is quite different. Synthetic biology companies argue that the final compound produced is “nature-identical” (chemically similar) to the naturally-derived version and therefore does not need any additional assessment. However, the synthetic biology processes themselves may create unexpected contaminants, toxins or allergens that may be hard to control for. In addition, the process of replacing natural commodities with unnatural ones raises significant environmental dangers, and concerns about the impacts on small farmers’ livelihoods, cultures, and national economies, as shown in these case studies.
Putting Synthetic Biology Developments in Historic Perspective: Technology, Livelihoods and Commodity Trade In
History shows that the introduction of new technologies can have profound and devastating impacts on the livelihoods of farmers, agricultural workers and national economies. In the colonial era, for example, European expansion accelerated the flow of food plants and livestock from their colonies, and Europeans began to largely control the flow of crops and to monopolize production and processing technologies important to commercialization (e.g., cotton, rubber, coffee, tea and spices). These technology transfers created patterns of long-lasting economic dependence and poverty in the colonized countries.
Developments in chemistry toward the end of the 19th century – particularly in Germany, France and the United Kingdom – propelled a new technology wave that reduced and/or eliminated the demand for a wide array of raw materials once sourced in the global South. Chemically-synthesized dyes from Germany, for example, quickly replaced natural dyes such as the madder root. By 1900 Turkey’s natural dye market disappeared, due to a chemically synthesized substitute. When blue synthetic dyes went into large-scale production in Germany in 1897, Indian farmers were cultivating 574,000 hectares of indigo from a variety of plants. In the 1930s, the plastics ‘revolution’ destroyed many other natural industries as well as creating vast pollution. Then, following World War II, similar market disruptions followed the introduction of synthetic petroleum based fibers.
The first beneficiaries of sudden technology shifts have historically been those who develop and/or control the new technology. The “losers” are the producers of primary commodities who were unaware of the imminent changes or who could not make rapid adjustments in the face of new demands and technologies.
In order to assuage concerns that synthetic biology could result in the same win/lose scenario, some advocates have argued that the transfer of field production to vat production could benefit local ecosystems and local food security. Amyris, Inc. in Berkeley, CA has suggested that the elimination of the field production of the Chinese wormwood shrub for a pharmaceutical compound (artemisinin) could allow farmers to grow more potatoes.
In fact, this is not economically or ecologically plausible; many of these plants grow in difficult environments not suited for other crops. Farmers not only benefit substantially from wormwood shrub production, but also the antimalarial tea they brew at home is directly beneficial to their families and communities. Potatoes, on
the other hand, are notoriously destructive to soils, and farmers are often obliged to make extensive use of crop chemicals with all the attendant economic, health and environmental damages.
In another case, undercutting natural vanilla production in Madagascar (and its replacement with vat production in Switzerland) would immediately damage the livelihoods of family producers and oblige them to cut back the wonderfully diverse and valuable forests that they need to create the conditions necessary for their vanilla plants.
Theoretically speaking, however, synthetic biology could stimulate demand for more of a given natural product. The development of synthetic rubber in the USA during World War II and after led, within a couple of decades, to synthetic rubber occupying more than 60% of the global market.
At the same time, post-World War II affluence and the demand for tires also increased the demand for natural rubber and the producer countries in Southeast Asia have benefited. Likewise, the discovery of a bacterium in Thailand in the 1950s, that led to the introduction of high fructose corn syrup (HFCS), could have been expected to wipe out demand for sugar cane and sugar beet. In reality, the explosion in consumer demand for sweeteners – and cars for ethanol – meant that the demand for both corn and sugarcane boomed, for better or worse. Many scenarios have to be considered in each case. Might this be so for natural flavors and fragrances? 95% of the market has already been lost to chemical synthetics. The remaining 5% still sustains tens of millions of farm families around the world. These natural flavors and fragrances are typically richer and more complex than factory-made versions, and in the past few years major food processors and even fast food companies (including Pizza Hut and Taco Bell) are going back to natural flavors in the face of widespread consumer disaffection. This is a battle that can be won. Schumpeter’s dictum on “creative destruction” still dominates, however. Not just change – but also the threat of change – can be highly destructive, even if it may turn out to be beneficial in the long run. Simply the possibility that a crop could be grown in a vat can disrupt supply chains and damage producer prices, causing farmers to abandon their best opportunities for fear that there will be no one to sell to at harvest time, something which already impacted the supply of artemisium, a valuable medicine. If the competition is frightened into retreat, synthetic biology doesn’t have to be technologically successful to be commercially successful. The bottom line is that industrial “creative destruction” is always devastating to marginalized peoples. These long-term changes shouldn’t be considered before those affected are able to be full participants in the political and economic negotiations involved in any technological change.
The Global Flavor & Fragrance Industry
In 2013 the global flavor and fragrance market was valued at $23.9 billion  and is expected to grow to over $35 billion by 2019.  This figure reflects the value of ingredients for processed foods and fragrances only, and does not include the value of crops like coffee and cacao beans, which are also commonly used to flavor processed foods. The industry is increasingly concentrated in the hands of four multinational firms  which controlled 58% of the market in 2013 – Givaudan, Firmenich, IFF and Symrise.  The top 10 companies collectively accounted for an estimated 80% of total industry sales.  At least six of these companies have R&D agreements with synthetic biology firms.  F&F giants are pursuing every feasible route to secure cheaper and more accessible raw ingredients – both natural (sourced from their natural environment) and synthetic (chemicals synthesized from petroleum). Although the flavor and aroma industry likes to emphasize the use of “natural” ingredients, the vast majority of flavors and fragrances are the product of chemical synthesis: an estimated 95% of the compounds used in fragrances are synthesized from petroleum – not sourced from plants, animals or microorganisms.  Even so, the main F&F firms still buy thousands of plant and animal-derived ingredients from dozens of countries.
Flavors and fragrances are essential ingredients in the manufacture of household cleaning products, perfumes, cosmetics, pharmaceuticals, food & beverages, aromatherapy and more. For example, the soft drink industry is the major consumer of natural flavors/fragrances, especially essential oils of citrus origin.  In fact, “cola” soft drinks cannot be produced without essential oils like lemon or lime.  The F&F industry currently sources 200 to 250 different botanical crops grown on an estimated 250,000 hectares worldwide. Around 95% of these crops are grown by small-scale farmers and agricultural works, mostly in the global South. 
An estimated 20 million small-scale farmers and agricultural workers depend on botanical crops grown for natural flavors and fragrances.  (This is a low estimate.) Flavor & fragrance industry trade groups do acknowledge that these botanicals are “highly important in terms of their socio-economic impact on rural populations and may also have important environmental benefits within agricultural systems.” 
From ETC Group’s research it is clear that the very largest players in the Flavor and Fragrance industry are now investing significant sums in synthetic biology production of key compounds. These are players who routinely source thousands of raw materials from tens of millions of farmers and pickers to transform their products into tens of thousands of consumer ingredients. Those enthusiastically embracing synthetic biosynthesis include DSM, BASF, Givaudian, Firmenich, International Flavors and Fragrances and Robertet. The syn bio ingredients they are switching to range from fragrances such as patchouli, rose oil and ambergris to cosmetic compounds such as squalane and shea butter to food ingredients such as vanillin, stevia and saffron.
Sourcing raw materials from a high tech vat rather than from millions of diverse farmers offers them simpler supply chains and increases corporate control over the production process. This current ongoing switch to syn bio derived-ingredients, which does little to benefit the consumer or the farmer, makes sense only in light of the economic interests of these large and powerful ingredients brokers.
 Chris Paddon and Jay Keasling, “Semi-synthetic artemisinin: a model for the use of synthetic biology in pharmaceutical development,” Nature Reviews Microbiology, Vol. 12, May 2014, p. 356.
 David Ferry, “The Promises and Perils of Synthetic Biology,” Newsweek, March 11, 2015: www.newsweek.com/2015/03/20/promises-and-perils-synthetic-biology-312849.html
 Melody Bomgardner, “The Sweet Smell of Microbes,” Chemical & Engineering News, July 16, 2012, p. 26.
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 Jay Keasling, quoted in Michael Specter, “A Life of its own: Where will Synthetic Biology lead us?,” The New Yorker, 28 September 2009, p59.
 Chris Paddon and Jay Keasling, “Semi-synthetic artemisinin: a model for the use of synthetic biology in pharmaceutical development,” Nature reviews. Microbiology. Vol. 12, May 2014, p. 356.
 Stephanie Lee, “This Startup Is Designing Yeast To Make Brand-New Scents, Flavors,” BuzzFeed, 18 March 2015: www.buzzfeed.com Brian Gormley, “Ginkgo Bioworks Raises $9M to ‘Engineer’ Food Flavors, Fragrances,” Wall Street Journal, 18 March 2015: http://blogs.wsj.com/venturecapital/2015/03/18/
 Stephanie Lee, “This Startup Is Designing Yeast To Make Brand-New Scents, Flavors,” BuzzFeed, 18 March 2015: www.buzzfeed.com
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 Hansen et al. 2009. De novo biosynthesis of Vanillin in Fission yeast (Schizosaccharomyces pombe) and Baker’s yeast (Saccharomyces cerevisiae). Applied and Environmental Microbiology 75: 2765-2774.
 Andy Pollack, “What’s That Smell? Exotic Scents Made From Re-engineered Yeast,” New York Times, 20 October 2013. In the United States, there is no requirement that a product derived from a genetically modified yeast be labeled as “GMO.” That’s because the engineered yeast is considered a processing technique, rather than the source of the flavoring/fragrance product.
 Products containing chemically synthesized flavor compounds and the introduction of flavors not occurring in nature are labeled as ‘‘nature identical’’ and ‘‘artificial’’ (EC Flavor Directive 88/388/EEC); (US Code of Federal Regulation 21 CFR 101.22). This has reduced the market value of flavors produced by chemical synthesis. Nethaji J. Gallage and Birger Lindberg Møller, “Vanillin–Bioconversion and Bioengineering of the Most Popular Plant Flavor and Its De Novo Biosynthesis in the Vanilla Orchid,” Molecular Plant 8, 40–57, January 2015. www.cell.com/molecular-plant/pdf/S1674-2052(14)00009-4.pdf
 “Say no to ‘natural’ on food labels: Why Consumer Reports is launching a campaign to ban the ubiquitous term,” Consumer Reports, June 16, 2014. www.consumerreports.org/ cro/news/2014/06/say-no-to-natural-on-foodlabels/index.htm
 Sabisch, M., and Smith, D. (2014). The Complex Regulatory Landscape for Natural Flavor Ingredients. Sigma Aldrich. www.sigmaaldrich.com, 01 August, 2014. www.cell.com/molecular-plant/pdf/S1674-2052(14)00009-4.pdf
 Perfumer & Flavorist, 2014 Flavor and Fragrance Leaderboard, June 2014.
 Market Insider, Flavors and Fragrances market projected to grow to US$35 billion by 2020, 27 Jan. 2015. www.intracen.org/itc/blogs/market-insider/Flavors-and-Fragrances-market-projected-to-grow-to-US-35-billionby-2020-/
 Tully and Holland. Flavors & Fragrances Industry Update, August 2014. www.tullyandholland.com/tl_files/documents/F&F%20Industry_Note_FINAL.pdf
 These include: Givaudan, Firmenich, IFF, Symrise, Robertet, Takasago.
 Charu Gupta, Dhan Prakash and Sneli Gupta. A Biotechnological Approach to Microbial Based Perfumes
and Flavors, Journal of Microbiology and Experimentation, Vol. 2, Issue 1, 2015.
 IFEAT Socio-Economic Impact Study, “Naturals – small but vital ingredients in a range of products,” IFEAT World, May 2014, p. 4. www.ifeat.org/wp-content/uploads/2014/05/IFEAT_World_May-2014-.pdf
 ETC Group’s conservative estimate is based on the fact that over 15 million farmers produce cornmint (source of menthol) in India alone.