The Buzz About Insect Protein
Eating insects is not new, but large-scale insect farming for both human consumption and animal feed has been reported as the next “hot” agricultural commodity allied to a promise to support sustainably meeting future demands for protein worldwide.
The race is on to create commercial large-scale production and deliver a reliable supply of bug protein to the marketplace. Major feed companies and suppliers are watching and stand ready to scoop up successful startups that can demonstrate consistent and predictable production output. Ag sector giants like Cargill Inc., Wilbur Ellis, Bühler Group , and food giant McDonald’s are either in the game or testing the waters.
Statista forecasts that the market for edible insects will grow from $406 million in 2018 to $1.2 billion by 2023.
EATING BUGS
Although 2 billion people worldwide already eat insects, North Americans and European, don’t have a history of eating bugs, and find the idea harder to swallow. This is slowly changing since the Food and Agriculture Organization of the United Nations issued a report in 2013 on the viability of edible insects to help curb world hunger. Since then, Google Scholar lists more than 15,000 published research papers, in the last five years, exploring the idea of utilizing insects for protein. And, as the world’s appetite for meat grows, finding sustainable protein for food and feed is driving the market development.
Insects are high in protein, contain a healthy amount of fats, minerals, and vitamins and require less farmland, less water and emit a lower carbon footprint than conventional meat products. It is also possible to envisage blends of insect species to perfectly match the protein profile of chicken, pork or even beef.
Crickets, grasshoppers, mealworms (the larvae of beetles), and black soldier flies are leading the pack of favored protein alternatives for large-scale commercialization. There are more than 30 companies in the U.S. farming insects and over 400 entomophagy-related businesses worldwide.
Culinary chefs, celebrities, and bug ambassadors like Brooklyn Bugs, have surfaced to educate consumers about the benefits of eating bugs and startups are popping up to give food innovators what they need to create a new line of insect-based specialty foods and protein bars.
Aspire Food Group, is the largest producer of cricket protein in the United States. It is utilizing robotics, precision ag and artificial intelligence (AI) to monitor insect behavior for optimal development throughout the growth cycle. Crickets are then dry-roasted whole for snacks or milled into a powder. Aspire’s mission is to make edible crickets a mainstream snack. It acquired Exo (an already successful innovator of cricket-based protein bars and powders) in 2018; and now is testing the products in supermarket chain, H.E.B., in Texas.
Inside Aspire Food Group's automated insect facility
In addition to crickets, Aspire’s founders were awarded the Hult prize in 2013, a $1 million grant in that it used to start a commercial operation in Ghana farming palm weevil larvae.
Entomo Farms (Canada) is North America’s largest human-grade edible insect farm. It supplies over 50 companies in 8 countries cricket and mealworm ingredients that are added to insect-based protein bars, smoothies, chips, crackers, pasta and pasta sauce, baking mixes, hot dogs and pet treats. Micronutris (France) founded in 2015, is the first company in France raising its own crickets and meal worms for its own line of insect-based foods for humans.
Thailand has the largest number of domestic cricket farms in the world, going back two decades. More than 20,000 villagers farm crickets in concrete pens in their backyards. Cricket farming requires little capital investment and as the demand for the edible insects has risen, so have the profits for farmers. Cricket Lab Farms is utilizing its warmer climate and cheaper labor costs to produce more economical, commercial-grade bug proteins for global markets. Its own manufacturing company, SENS (UK), makes cricket-based protein/energy bars. Bugsolutely, another Thailand-based company, is manufacturing pasta made from crickets and is producing the first bug-based snack food for Chinese consumers made from silkworms.
Hargol FoodTech, (Israel) is working to become the world’s first food-grade grasshopper facility (one of the first start-up winners of Alltech’s Pearse Lyons Accelerator program) and it continues to secure investments and interest from food-industry giants that want the product, as it is one of the few that can deliver the goods.
Bugs are regularly consumed by 2 billion people in 130 countries. A vendor cart in Bangkok, Thailand, features deep-fried insects – locusts, crickets, grubs, beetles.
(Credit: Onny Carr)
INSECTS-FOR PETS, FISH & ANIMAL FEED
As the edible bug market slowly gains traction with consumers in the West, the biggest opportunities for insect farmers exist as a protein replacement for animal feed, which was valued at $442 billion in 2018.
The black soldier fly and mealworms (larvae from beetles) are particularly favored for large-scale production for use in pet food, livestock feed, and fish feed for aquaculture.
Insects offer a cheaper alternative to conventionally sourced protein. They are easy to grow and high in protein and digestible fat in small operations but challenges exist with scaling . Insects have different nutritional profiles, so some are better suited to provide the essential amino acids needed by swine and poultry and several varieties look to be capable of replacing soy and corn, the primary ingredient used in most livestock diets.
Several by-products are generated from the harvested insects. Insect larvae are roasted— dried and bagged whole, milled into powders, or pressed to extract oils (replacing less sustainable palm and coconut oil) for feed. Some manufacturers also produce Chitin, a bio-polymer used in medicines, cosmetics, and as a food additive. Nothing is wasted as even the insect’s (poop); frass is proven to be a good organic fertilizer, and unlike animal manures, it does not emit methane.
Bugs also feed on organic waste (rotting fruits and vegetables, coffee bean pulp, distiller's grain, etc.), without the need for sorting or separating of other materials such as plastics for example, which offer a promising solution toward addressing some of our food waste problems. Insects can recover nutrients from food waste and bring them back into the food-value chain, thereby contributing to a circular economy.
Entocycle’s Circular Economy (Credit: Entocycle)
Aquaculture is a big market for commercial insect producers. Fishmeal is typically made from wild-caught fish and fish by-products. Over 25% of all the fish caught globally goes into producing fishmeal for aquaculture, feed for livestock and pets—fish that could otherwise be used for human consumption. At the same time, fish stocks are becoming increasingly unreliable due to warming oceans, overfishing, and catch restrictions.
A few companies are beginning to test insect protein in pet food. In the U.S. alone, Americans spent $69.5 billion on their pets in 2018. Pets consume enough food to feed 63 Million Americans, or 20% of the US population y and are estimated to be responsible for a quarter of the environmental impact of meat production in the United States. Nestlé Purina is experimenting with a new line of dog food that contains cricket protein and YORA (UK) recently launched a dog food using black soldier flies reared by Protix. Wilder & Harrier (Canada) has a line of dog food and treats made from black soldier flies, crickets, and mealworms in pet stores and veterinarian clinics across Canada.
The inside scoop (or poop) on why investors aren’t excited about Insects
They question if there is enough waste food or feedstocks to fuel the insect market (unless we use poop from other animals which is problematic from a regulatory perspective)
When insect meal is included in animal diets above certain levels performance of the animals suffers
Insect production isn’t easy to scale and seems to suffer in large scale models.
REGULATION OF A NEW INDUSTRY
European companies are the front runners in research and development of insect-based proteins for both food and feed. Currently, insects are defined in the EU as a novel food and most countries are authorizing imports and sales of insect-based products. Each country is self-regulating its own market on a case-by-case basis. Insects are not yet authorized for poultry and pig feed, neither can insects be fed foodstuff containing meat, fish, or food losses originating from restaurants or catering establishments. This is seen as a factor limiting growth.
The U.S., Canada, New Zealand, and Australia have also adopted the novel food approach, while Asian cultures are working toward formalizing an industry that has existed for centuries.
Black soldier fly larvae are approved for use as feed for broiler production and salmonid fish in the U.S. and Canada, and this is opening new doors for the feed industry.
SWARMING TOWARDS THE FUTURE
Globally, market opportunities are exceedingly robust for any farming company that can reliably produce large quantities of quality protein at a reasonable price point. Sensing, robotics, and IoT are going to be a big part of it to ensure the growth environments remain consistent.
The price of insect-based products needs to become more affordable. In the U.S. for example, a cricket flour currently costs consumers between $35-$45 USD per pound ($77-100 per Kg). Prices are still too high to encourage much experimentation, in a culture that is largely negative about eating insects.
Utilizing insects as feed for animals and fish has hurdles. More capital investments are needed to help successful startups expand operations. Transparency and traceability are essential in this uncharted territory to minimize any unseen complications and fully protect human-and animal-health. We may find in solving one problem we create others.
Regardless of the challenges early adopters are moving full steam ahead and before long insect-based proteins will become mainstream.
Thanks to Kathryn White for her research and writing, and to Ross Hunt and Cainthus.com for the edits and suggestions.
Identifying the players: Who’s Who in the Insect Zoo?
The International Platform of Insects for Food and Feed, reports that 50 insect farming groups have collectively raised $480 million, to-date, to launch the insect-protein industry. The EU-based association does not account for companies that are not members, so it only provides a partial picture. The following companies have garnered at least $1 million in investment capital.
Headquartered in the UK, AgriProtein is the world’s largest insect-protein production firm. Its main facility is located in Cape Town, South Africa. AgriProtein will soon rebrand as Insect Technology Group (ITG) the holding company for its sister operations that include: Circular Organics, MultiCycle Technologies, BioCycle, ITG Biopolymers, and recently acquired, Millibeter.
Partnering with engineering company, Christof Industries, ITG has developed an ambitious strategy to roll out as many as 25 turn-key fish farms, per year. It plans to build a pipeline of 100 global insect farms by 2024, and 200 by 2027—aiming to locate some of the first new facilities in Africa, U.S., Canada, U.K., Asia, and the Middle East.
Protix (Netherlands) was founded in 2009 and opened its first commercial black soldier fly plant in the Netherlands in 2017 after raising $45 million. It has a second facility opening in 2019. Using high-tech systems, artificial intelligence, genetic research, and robotics, Protix has been able to produce high-quality protein consistently. A recent acquisition of Fair Insects, is giving it the ability to expand product offerings into markets for mealworm, crickets, and locusts. A newly formed, exclusive-partner agreement with Bühler Group will enable them to replicate the technology on a global scale and ramp-up production as demand increases. They are in the process of rebranding its new partnership as Bühler Insect Technology Solutions (BITS).
The French government is investing up to € 1 billion in future proteins which include insects and microalgae. It appears that France wants to lead the insect market in a way the UK has done in genomics. This receptivity for insect-protein development is generating momentum for a number of French companies:
Ÿnsect (France) is farming mealworms for aquaculture, pets, and fertilizer. Its latest funding round secured it $125 million, the single-largest investment in the insect-protein industry to date. Ÿnsect plans to use the capital to build an automated facility that will produce about 20,000 tons of insect-protein annually for use in fertilizers, animal feed, and aquaculture. It has 25 patents and looking to expand into North America.
InnovaFeed (France) is producing black soldier fly into feed for farmed raised fish. It plans to have five plants operational by 2022. A new round of financing is enabling InnovaFeed to deploy a second production facility, which is 10 times larger than the first, to accelerate production. It has collaborated with feed manufacturer-Skretting and fish farmer Truite Service to launch a new source for insect-raised trout for the French grocer chain, Auchan. The trout are currently available in 52 stores, with plans to expand throughout the entire food chain by year’s end.
Enterra Feed(Canada) is another emerging insect farm that processes flies into protein-rich feeds for fish, poultry, and pets. Enterra is set to expand its production next year by establishing its second $30-million-facility in British Columbia, Canada, with the aim of increasing the company’s production of black soldier fly 90 times. It claims to be valued at over $100 million .
Beta Hatch (USA) is producing a mealworm-based fish meal for farm-raised salmon. It recently received $2.1 million in investments from Wilbur Ellis to expand its production capabilities. Beta Hatch is also interested in working with other insect producers in the U.S. to standardized production methods across the industry.
EnviroFlight (U.S.) formed in 2009, is a joint venture of Intrexon and Darling Ingredients. It opened its first commercial-scale facility in Kentucky producing the black-soldier-fly protein in January 2019. The automated plant is scalable with the goal of eventually generating 3200m tons annually. The company is already permitted to manufacture feed for use in salmonids and poultry. It manufactures dried larvae, oil, and powder for use in livestock feed, aquaculture, pet food, and fertilizer.
ENORM (Denmark) has received a $2.5m grant by the Danish government to establish the country’s first industrial black-soldier-fly production site, beginning in early 2019. Its goal is to produce 100 tons per day by 2023.
Entocycle (London) is utilizing automation and AI to farm black soldier flies for aquaculture and poultry feed. It collects organic food waste from farmers, food processors, and wholesalers. Entocycle was an Alltech One 2018 Ideas winner.
Entobel (Vietnam) produces animal feed for aquaculture from black soldier fly and is looking for investments to expand into South East Asia countries and South America.
Hexafly (Ireland) is producing black soldier fly protein for fish feed, fertilizer, and Chitin.
Globally, start-ups are navigating the early ventures on every continent as they seek to stake a claim in the new industry. There is plenty of room for competition at every level. Other players include AgroLoop (Hungary), Ento (Netherlands), Entofood (Malaysia), Entomo Farm (France), NextAlim (France), Next Protein (France), Proti-farm (Netherlands), Protenga (Singapore), Tiny Farms (USA), and Unique Biotechnology (China).
