Plant-based products have yet to successfully materialize, however, Origin Materials claims they've cracked the technology and economics code for wood cellulose as a raw material. Needless to say, this is a game-changer.
By Dana Donovick | Co-Founder Disrupting & ChargeTalk
Image provided by Origin Materials
Origin Materials was founded in 2008 by chemical engineering students from University of California, Davis. The company went public via SPAC merger this past June, with Charles Drucker's Artius Acquisition, a deal that put $925M cash in the bank, and included investments from Origin's rolodex of prominent customers Danone, Nestlé and Pepsi Co.
Since announcing the SPAC deal in February 2021, the company has epitomized hyper-growth, expanding its order book from $1.5B to $3.5B and committed to include industrial and apparel textiles, automotive parts, insulating foams and other applications. New customers have also lined up in that time, including Ford, Mitsubishi Gas Chemical, AECI, Solvay, Palantir, and PrimaLoft, which supplies major brands such as Lululemon, Adidas and Nike.
Simple, everything starts at the very top with Origin's Co-CEO's, John Bissell and Rich Riley, one from the tech world and the other from the engineering world. In a recent Forbes article, Bissell said
“I’ve spent the last ten years building the right approach. For one, you can’t have too-tight feedstock economics. If you look at the spread of forest product feedstock versus the plastics market, there’s plenty of room. And we’re a fan of new materials, but the development cycles are too long. So we’re plugging straight into an existing material, PET [polyethylene terephthalate, one of the packaging industry’s most widely-used plastic materials]. That’s a strategic decision we made early on–it’s much easier to introduce existing materials made a different way. Finally, we convert using chemical processes versus fermentation or gasification.”
Origin Material's other CEO, Rich Riley has an impressive resume, which includes the invention of the browser toolbar in the late 90's which was eventually sold to Yahoo. Riley joined the company in 2020.
“I joined last year, when customer demand and the technology were where the needed to be. Now we have $3.5 billion in orders and are aggressively pursuing a $1 trillion TAM. This is a once-in-planet transition, and John is the Elon Musk of chemistry. Every minute he spends not on the chemistry is wasted, which is why I’m here. Our North Star is to compete with existing materials, with no subsidies. That’s driven what kind of process we use and what kind of materials we make. It doesn’t matter if we can get from this to that if it’s not cost-effective.”
Everything starts with wood biomass. What is wood biomass? Harvested wood, agricultural waste, and even cardboard. Origin hold 19 patents for it's proprietary process of converting C-6 cellulose, an organic compound consisting of oxygen, carbon and hydrogen that’s extracted from the wood into hydrothermal carbon (HTC) and chloromethyl furfural (CMF), which, when combined are able to produce plant-based zero-carbon high-functioning materials. These materials include 100% recyclable PET, activated carbon for water filters, and other materials with broad applications. Origin's end product is chemically identical to PET made from fossil fuels, however their's is derived from wood, using chemistry, not biology. In other words, the Origin Materials platform replaces oil as the foundational feedstock for the material economy. So in a sense, everything begins with air, not petroleum. Because Origin's process sequesters carbon, they're making materials that aren't just sustainable—but restorative.
“Our commitment is to help companies get to net zero and meet their emissions goals. They all have goals for the 2030s and 2040s, and our plan is an incredible market fit. It provides them with a carbon-negative version of their existing materials, with no changes needed to their tooling or production processes. Other alternative materials require changes to all of that. We’re definitely feeling enormous support.”
“Our current customers are companies like Pepsi, Nestlé and Danone. Look at Danone– they use water bottles. If we can make those, we can make lots of things–they’re made of clear food-grade PET. Between those three companies, they buy about five million tons of PET a year, which translates into the potential for $8 billion in revenue and $4 billion in profit. But then look at Primaloft–they’re currently serving about 900 brands. And we see a lot of other companies moving into PET from other plastics because it’s recyclable. We see possibilities in cars, building materials, toys, toner and lots of others.”
For all the obvious reasons, Origin Materials is one of our favorite disruptive companies.