This article was updated on Oct 6, 2014.
Few companies bring out a stronger opinion than Monsanto (NYSE:MON). While the company calls itself a sustainable agriculture company, its foes call it pure evil. That begs the question, is this company simply misunderstood? Let's take a quick look at five facts that few people probably know about the seed giant.
No. 1: Monsanto had sweet beginnings
In 1901 John Queeny had an idea. He wanted to start a simple business to manufacture the artificial sweetener saccharine here in America. The goal was to supply his customers with a sweetener that would do the same job as sugar but at a lower cost. It was that initial motivation to help customers do more with less that has endured at the company he founded and named after his wife.
No. 2: The one customer that changed everything
Monsanto didn't find success right away. In fact, if it wasn't for the one customer that bought its entire production run in 1903 and 1905, the company might not have survived. That big customer was Coca-Cola (NYSE:KO)which at the time was experimenting with saccharine to sweeten its beverage product.
No. 3: The molecule that changed farming forever
In 1970 a young Monsanto chemist named John Franz made a discovery that changed farming. He discovered a molecule called glyphosate, which is now the active ingredient in Roundup herbicides. It allowed farmers to kill almost every weed that had plagued them for as long as people have been farming. The find landed Franz in the National Inventors Hall of Fame and enabled Monsanto to continue helping customers do more with less.
No. 4: The problem of population
The world's population is growing, and with it there are more mouths to feed with less arable land on which to grow crops. In fact, the world's farmers must produce more food in the next 50 years than their forebears produced in the past 10,000 years. Toward this goal, Monsanto's goal is to double its core crop yields by the year 2030. That is no small task. It's one Monsanto will only accomplish through a combination of breeding, biotechnology, and improving farm-management practices.
No. 5: Corn's transformation
While most can get behind improved breeding and farm management, it's the biotechnology aspect that worries us. Giving plants beneficial characteristics beyond what can be done with traditional breeding sounds like science fiction, with fears of Frankenstein lurking behind the process. While only time will tell if that proves to be true, Monsanto primarily uses biotechnology to speed up the breeding process. For example, it took 10,000 years for teosinte to become what we now know as corn, while scientists needed just 15 years to develop an insect-resistant corn. That's why Monsanto views biotechnological advances as a critical part of its goal in helping farmers. It's an expensive process, which is why the company makes so many headlines to defend the intellectual property it has developed.
Monsanto has grown from its sweet humble beginnings to one that is not always known for doing sweet things. That being said, the company has still done a lot more good that it often gets credit for. Maybe someday we'll look back and see all of the improvements to farming that were only made possible due to the hard work and dedication of Monsanto throughout the years.
Matt DiLallo has the following options: long January 2015 $35 calls on Coca-Cola, long January 2016 $100 calls on Monsanto, short January 2016 $100 puts on Monsanto, and short January 2016 $130 calls on Monsanto. The Motley Fool recommends Coca-Cola. The Motley Fool has the following options: long January 2016 $37 calls on Coca-Cola and short January 2016 $37 puts on Coca-Cola. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.