Whatever happened to…beneficial birch bark extracts?

This guest blog is from the Natural Resources Research Institute (NRRI), a follow-up to a post written in 2017 by June Breneman, NRRI Manager of Marketing and Communications. NRRI is a supporting member of the Bioeconomy Coalition of Minnesota.

Following the main story is a related story about the history behind today’s birch extractives markets.

Early NRRI research and development went on a ‘rollercoaster ride’ leading to an international effort starring Minnesota’s giving tree, the paper birch.

Ancient medicine and modern science have both confirmed the healing powers of the natural chemicals in birch bark. Peer-reviewed research on birch extracts, which has grown exponentially in the past five years, shows they are effective for preventing and treating cancer, chronic inflammation, HIV/AIDS, type 2 diabetes, and more.

Developing a process to extract the beneficial chemicals in birch bark for its economic potential was an important endeavor for the NRRI, starting in the late 1990s into the mid-2000s.

University of Minnesota–Duluth Chemistry Professor Robert Carlson identified the potential in wood products waste stream bark and got industry support to move forward.

Birch extractives history →

NRRI built a large bench-to-pilot-scale lab specifically for the international research team working on the project. NRRI’s patented process extracts these beneficial chemicals—including betulin, betulinic aldehyde, betulinic acid, and lupeol—from birch bark for use in a variety of applications.

Building markets

Developing that process led to the startup of a small manufacturing plant in 2012 in Two Harbors, MN, called The Actives Factory. CEO Brian Garhofer made the investment because he believed in the power of these chemical extracts and began sourcing birch bark from the waste stream of Wisconsin lumber mills. He produced the first run of extractives in 2014 and started knocking on doors at pharmaceutical, cosmetic, and supplement manufacturing companies.

“And then we went on a long learning curve,” said Garhofer. “For example, pharmaceutical companies don’t start with a chemical and work up; they develop their own ideas and seek out ingredients. Early on, the knowledge of these chemicals just wasn’t widespread.”

The process was also expensive, so he did an extensive search and found a manufacturing partner in India to make it affordable.

So, while the market for birch bark chemicals was nascent when he started, the research is accelerating today. Garhofer figured out how to ship internationally, and having a partner overseas is paying off. Most of the medicinal and cosmeceutical requests for betulin come from places like Israel, India, Indonesia, and Germany.

Applications

And even though he’s been working at this for 12 years, Garhofer can still be surprised by his customers’ applications. A woman in Alaska is developing a supplement to treat horses with melanoma. Another group is pursuing supplements to treat diabetes in dogs. A company in Canada developed an immune formula using birch extracts and chaga mushrooms. A startup in Sweden is developing a biobased rubber using the byproduct of bark extractives, suberinic acid (a birch tar polymer).

“It’s been exciting, a bit of a roller coaster ride, but it could explode any time, and I’m ready,” said Garhofer. “I’m an ingredient supplier, and my customers are doing their own research and finding me on Google or Amazon.”

Selling locally

Meanwhile, his wife Donna started her own birch-infused soaps and lotions shop, Birch and Body, in 2013, both online and in a brick-and-mortar store in St. Bonifacius, MN. Over the years, she’s found that reaching customers requires education about birch extracts. You’ll find her and her products at local artisan craft shows and events.

“Business is growing steadily,” she said. “We especially like events at the University of Minnesota [Landscape] Arboretum and talking about our connection to the U through NRRI. It really resonates with that demographic.”

When they started down this path, the couple thought they’d give their efforts five years. Twelve years later, it hasn’t made them rich, but they are pleased with the impact they are making—and the potential ahead—to improve lives.

“We would not still be doing this if we didn’t have the passion for it,” Garhofer added. “Maybe we were ahead of the curve, but the inquiries are growing, and we’re one of the few outlets selling 100 percent pure birch bark. NRRI’s technology is making this possible.”

NRRI Research Group Leader for Materials and Bioeconomy Eric Singsaas acknowledges that, as an early adoption technology, NRRI’s birch bark extractives journey was long and bumpy, but the learning curve was important.

“For lab innovations to succeed, researchers must learn from those outside of the lab—the business people and public—what they really need,” Singsaas explained. “We try to keep this in mind as we are in the early stages of exploring other platform chemicals from plants like lignin, cellulose nanocrystals, and biocarbon that offer unique opportunities to create new opportunities from our biomass resources.”

To learn more about NRRI, visit their website: www.nrri.umn.edu

What Led to Today’s Birch Extractives Markets?

Back in the late 1990s, University of Minnesota–Duluth Chemistry Professor Robert Carlson was asked by Potlatch paper company in Cloquet to help its research and development division find a marketable solution for waste bark. It’s useless in the paper-making process and was being incinerated as fuel for the plant’s operations.

Carlson came up with a couple of ideas, but the one that got Potlatch’s attention was developing a way to extract the bark’s highly valuable chemicals. NRRI Director Michael Lalich was approached to house the lab and hire the Ukrainian organic chemists Carlson identified as having the right expertise to do this research.

A major early discovery was made in University of Minnesota–Duluth Professor Raj Karim’s herpes virus laboratory, where they observed considerable positive activity in treating this virus with betulin, one of the birch bark extractives. Research revealed that the chemical created a barrier to keep the virus from entering the cell.

“This exciting observation brought in considerable local industrial backing to pursue this,” said Carlson. “Potlatch’s David Peterson was identified as director of the new business entity, NaturTek, later renamed NaturNorth.”

NaturTek rolled out in February 2000 as a joint venture of the University of Minnesota–Duluth/NRRI, Potlatch Corporation, and Minnesota Power’s Synertec Division.

The effort started strong with experienced consultants brought on board in business development and natural product extraction techniques. Carlson led the team in identifying and engaging entities with broad biological testing capabilities and scaled-up extraction processes of pelletized birch bark.

Even with the extensive library of betulin derivatives showing broad and beneficial biological activity—and the university holding the growing patent portfolio—the company failed to attract major new business partners. That’s when Brian Garhofer stepped in to lead The Actives Factory in Two Harbors, MN.