Paul Goldberg, CEO of Carbon Neutral Ag Sciences, chats with Energy.Media about how his company’s revolutionary hydrogel product plans to change the face of agriculture. By reducing the amount of water and fertilizer needed by farmers, Paul believes that this product will be transformational for global agriculture as the world faces increasing droughts and concerns over food security.
With a background in mergers and acquisitions, Paul tells how he came to acquire Carbon Neutral Ag Sciences, what stood out to him about the technology, and where he sees the company going in the future:
- Unlike other hydrogels used in extractive industries, the company’s flagship product Bounty Gel is specifically designed with the needs of agriculture in mind. The product is engineered for strength, allowing the gel to anchor near crop roots and slowly release needed moisture. By using Bounty Gel, farmers not only save on water and fertilizer, but also are finding that their crops see reduced levels of illness and stress, leading to greater harvests.
- Bounty Gel is not a replacement for other products – rather it augments the efficiency of other chemicals like fertilizer, allowing farmers to use less. Reduced chemical use not only saves farmers cash, but also has cascading environmental benefits, including lessening toxic runoff to nearby bodies of water.
- Currently working with independent farmers, Paul credits the company’s success to its tailored approach to product sales. Staff agronomists work individually with customers to understand their specific farming environments, creating a custom-made plan for using Bounty Gel most efficiently.
- Paul discusses how he is proud of the company’s growth, up from just 1-2 customers at the time of acquisition to well over 90 clients within 18 months. He hopes to continue growing the company organically as the product gains momentum.
Peter Perri 0:00
I’m with Paul Goldberg today. And Paul is the CEO of carbon-neutral Ag Sciences, they make a hydrogel that reduces the need for water and fertilizer that’s really a big deal these days, especially with rising commodity prices. And this product has been around for 10 years. But Paul was able to acquire the company, because he has a specialist. He’s a specialist in m&a and acquiring distressed assets. So we’re excited to have Paul on the podcast today. Paul, welcome to the podcast.
Paul Goldberg 0:33
Thank you very much, Pierre. Appreciate your opportunity here.
Peter Perri 0:36
So tell us about your company. We’re excited to learn more. This is a big area, Ag Science, is a big focus for us in agricultural technology, so love to hear more about it.
Paul Goldberg 0:50
Well, my background in business is buying distressed assets. So I buy businesses that are needed to be turned around that may have for whatever reason, rather, it may have had an excellent product, but for other reasons, they came into financial trouble. So I had two longtime customers of mine, who were investors in the previous company, who came to me and said, there’s a cash call for more money. What do I think? Can I do due diligence and come back with an answer? So after about, I don’t know, about three weeks of studying it, I decided that the product was transformational. But in the hands of the current management, I didn’t see how they were going to get out of their current debt. So I made a suggestion that we buy the company and my previous background, I was 100%. Transactional, I would buy it and sell it. But I felt that this product was so unique. And it was the right product at the right time that for the first time in my 40-year business career. I chose to run an acquisition. This is the first time I haven’t just flipped out of it.
Peter Perri 1:57
Very cool. So what about it really caught your attention that made you feel this was the one that you wanted to put your time into? Well,
Paul Goldberg 2:07
you can’t help but read about drought conditions about the concerns about the food supply for the world. There are philanthropic groups all over trying to remedy this problem. And I saw this as a product that was a possible solution. And it felt good at this stage of my career, I’m 64 years old, to get behind something that could have an impact could have something positive. So rather than just try to squeeze a few more dollars out, I decided, let’s take it for a ride and see where
Peter Perri 2:40
we can take it now very cool. So what’s your plan of action for the next say, year and three years, and five years to grow the business?
Paul Goldberg 2:52
Well, we’ve cured most of the problems that cause it to become distressed. We’ve put manufacturing in place. We’ve got agronomist and staff, we’ve got logistics sorted out. So we’re now in and we’ve created new products around it. So by doing that, we were able to now meet customer demand, which was the first step in generating cash. So we’d have to worry about cash flow. And that allowed us to attract strategic partners. Now we’re finding that our product bounty gel can be used as a standalone product, it can be used in combination with fertilizer, with seed. And with other products like there’s a product that’s a microbe that takes nitrogen out of the air and takes the phosphorus in the ground and turns into ammonia. Well, they all need moisture in order to thrive and bounty gel is found to be a suitable, viable, and a very successful component of their products, which is augmenting the values of their products as well. So we find there are a lot of diverse uses for the product. And where it goes that route. It creates different modalities of revenue. And that’s what drives a startup, get the cash in
Peter Perri 4:07
no doubt. And what is the sales channel look like? Who are the customers that you’re trying to reach in order to be able to sell this product?
Paul Goldberg 4:16
Well, we’re starting with large farming, large farmers, large growers. So we’re working with growers that have over 1000 acres, we’re working, we don’t want to work with distributors because this product needs education. We’re finding that for the first time customers, we want our agronomist to talk to the customer, learn their irrigation schedule, learn what crop they’re growing, try to learn what kind of equipment they have, and create a protocol that best suits their irrigation schedule, their type of soil and how they would apply. And so we want we don’t want to go through distributors because it’s not done right the first time you don’t get a second chance. So I’d rather start slowly and let the rollout go where we have success rather than just a large quantity of sales that don’t repeat.
Peter Perri 5:03
Now that makes sense and the in the companies you’re targeting, are they mostly independent? Or are they owned by, say some of the big conglomerates, like the ATMs of the world, or is it a little bit of both?
Paul Goldberg 5:14
We’re starting off with independence, it’s a lot easier as an independent company to talk to an independent decision-maker. When you get into the ATMs and the Cardinals, we’re just not ready for that yet. There’s going to become a time. And when I say we’re not ready, what I mean is we want to get enough momentum on the ground, where we get a little word of mouth going with some success. Recently, a customer posted something on LinkedIn about us, which drew some of those big-name companies towards us. I’d rather happen organically than for us to force ourselves onto some of the big companies at this time.
Peter Perri 5:50
Yeah, that makes total sense. Is your is your growth and financing plan consist of raising more capital? Or do you want to grow purely organically?
Paul Goldberg 5:59
Well, so far, we’ve been self-financed. Fortunately, myself and my partners have had liquidating events in our careers, we’ve had some success, we’ve been able to be self-financed. But I do realize we’re reaching a point where we’re going to have to reach out to the marketplace, it’s just a matter of when not if
Peter Perri 6:18
that makes sense. And do you ultimately see selling the business to a large private company? Or do you want to, you want to maybe tap the public markets in the future,
Paul Goldberg 6:29
there’s going to be an exit plan, there has to be because, at some point, this product, and the associated products and the other skews that will come from this product are way bigger than anything I alone can create. I’m this, this product at some point needs to be in the hands of a very large company, who can meet all the customer demands, I can get to a certain point. But a business person has to know their limitations. I certainly know mine, my wife reminds me of them every day. So I know how far I’m gonna go with this.
Peter Perri 7:03
Now that makes that makes total sense. Could you maybe transition and talk a little more about the product maybe get into just the flagship product? What products does it replace? Does it replace other products? Or is it is it an additive product? And what’s the big reason that companies are buying what do you find is the number one reason they buy it from you guys.
Paul Goldberg 7:30
So our product is called bounty gel bounty gel is a hydrogel. The difference between our hydrogels and the ones that have been traditionally in the market is our objective was a hydrogel for AG. It wasn’t a hydrogel that’s used in oil and gas or mining or in diapers. But it was a hydrogel that was designed for AG. That means we went for instead of that flashy, high, high top number where it holds four times its water, we wanted mechanical strength, mechanical strength is the ability to stay in the root zone and to anchor the other chemicals. So we went that’s what we had gone for was specifically the mechanical strategy. It doesn’t replace other products, it does help and augment the efficacy of the other products. So for example, fertilizer, you use a lot less fertilizer, about 30% less fertilizer when you use bounty gel. Bounty gel is like a magnet is to steal about the gel is attracted to a source of moisture. That’s what it does, it just sucks up the moisture. Once it attaches to the fertilizer, it anchors it in the root zone. It allows it to slowly be released. Our customers are reported to us, they come for the water, but they stay for the benefits. So they come because it saves water. That’s the main that’s the headline. But when they see that they’re having less stress on their crops, so they don’t have disease and issues that would affect the crop. Because the water is released all day long. You don’t have stress, the survival rate of trees have gone from 85 80% to well over 98%. We’re finding also that the fertilizer use has gone down. So when you reduce fertilizer, you reduce illnesses and you reduce stress, you get a more bountiful harvest. And then you have survival rates. The benefits are multiple. It’s not just one thing. We’re not replacing anything that’s currently being used, it’s adding to it. But when you look at return on investment, if a farmer wants to spend $1,500 an acre, let’s say in citrus, which is a fairly common number, if you can reduce the fertilizer and the water and all the other benefits, forget the fact you’re gonna get a better crop and a higher yield. Just that alone, you’ll still be under the 15 100,000 acre while bringing in the bounty gel. So although it’s not replacing anything, it’s certainly reducing the other chemicals
Peter Perri 9:59
Got it makes, it makes a ton of sense that the as fertilizer prices rise, does that mean that your product is more useful, or more valuable?
Paul Goldberg 10:11
I was when I, when I bought the company, I thought I did my due diligence. I saw don’t think it was all about water, I spoke to a customer who spends a significant amount of money with us every year, well over a half a million dollars on our product. And I asked him, Are they saving enough in water that justifies it, and he just laughed, he goes, we’re saving enough on fertilizer that justifies it. So just on that information alone, we’re learning that there are so many other benefits that we didn’t even calculate in when we looked at the product. And I don’t think we’ve completely learned all the benefits.
Peter Perri 10:46
Very good. Do you mind disclosing how many customers you have today? I’m
Paul Goldberg 10:52
between trials and active, I would say where we got the company with one or two customers. And in 18 months, we probably are over 90. The only thing is that we had some problems with COVID. And getting a product of getting chemicals and so forth. We got smashed by COVID. If it wasn’t for our loyal customers’ repeat orders, it would have been very difficult. We couldn’t travel to the farms to show them. So I’m very proud of what we’ve achieved under the circumstances. And COVID has been through a whole new curveball at me that I never was ready for as the rest of the world as well.
Peter Perri 11:35
No doubt. That’s incredible. Is there anything else you’d like to get across to the audience before we before we end the call?
Paul Goldberg 11:43
Well, I think that if everyone has an open mind that there are new challenges today in the ag industry if your fathers didn’t have to worry about drought conditions, they didn’t have to worry about it and unstable fertilizer situations or the environmental impact of the runoff, or keeping the the the carbon footprint down. The world has changed. And bounty gel is a product for the future. It’s going to it’s going to be the harbinger of what the new form is going to look like and environmentally conscious, less dependent on water, less dependent on the fertilizer industry. And I think bounty gel is going to be the first of a family of products that’s going to address those needs.
Peter Perri 12:28
No, that’s great. Paul, it’s great to hear that type of a story of an entrepreneur that came in like yourself was able to see a diamond in the rough and is now taking the company to the next level. Paul Goldberg from carbon-neutral Ag Sciences, they make a hydrogel that reduces the needs for water reduces the needs for fertilizer to things that are in high demand these days. It has a great impact in terms of the environment. And, you know, we look forward to following this company going forward and seeing how it continues to succeed. Paul, thanks for the time today. Look forward to staying in touch
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