by Lombard Odier

Insect protein’s big push

To serve a global population that is expected to reach almost 10bn by 2050, food production needs to increase by about 70 per cent, according to UN forecasts, with demand for animal protein in particular increasing the strain on the environment. Analysts at Barclays, the UK bank, estimate the insect protein market could be worth about $8bn by 2030, up from less than $1bn today. 

Given that growth, it’s no surprise we’re seeing an increasing number of companies specialising in the manufacture of insect protein. 

One of these is NextProtein, founded in 2015. The company has its offices and a research lab on the outskirts of Paris, and a production facility in Tunisia. Its goal is to create more sustainable industrial farming practices, using the life cycle of the black soldier fly, fed largely on organic waste. By doing that, as well as creating protein, the company aims to reduce food waste. 

As NextProtein’s head of strategy and business development, Etienne Raynaud explains, 70 per cent of what the flies are fed is fruit and vegetables that were going to end up in landfill. 

“We’re taking waste, taking something that's unused, to make it something valuable for the industry, and something that's highly nutritious and sustainable”

The black soldier fly is a popular creature among insect protein producers. 

“The larvae have very high protein and oil. 40 per cent protein, 30 per cent oil. And it's able to increase its size by 10,000 times in just three weeks. So, its growth rate is incredible,” says NextProtein’s senior researcher Heather Fallquist.

The flies are also extremely resilient and adaptable to different environments, and the company is constantly testing and refining its production process, says Fallquist, which includes finding the best form of nourishment for the flies.   

“The ultimate goal is to have a high protein meal, with very low fat and low fibre as well. And testing helps us know which feeding substrates are best that lead to the highest protein.”

Earlier this year, NextProtein closed $11.2m in Series A funding to scale up production in Tunisia, and funding for the industry is increasing. 

Several hundreds of millions of dollars have also been invested in other insect technology companies, including Enterra in Canada, AgriProtein in South Africa, and Protix in the Netherlands, which breed black soldier flies on a mass scale to produce protein powder and oil.

“We have barely scratched the surface of insect potential,” says Raynaud. “Essentially, we started with the black soldier fly but there's so much more that we don't know. And there are so many other insects that can have equal potential to address other important challenges that humanity faces.”

One company that sees the potential in the black soldier fly itself is recently launched Fly Genetics, a joint venture between France’s Groupe Grimaud and Bulgarian start-up Nasekomo. The goal is to supply the insect-based bioconversion industry with improved black soldier flies.

“It's traditional animal genetic selection. We breed the insect and then we select by measurement, the more efficient insect for the industry” says company board member Etienne Duthoit. 

Duthoit says the company’s creation is another sign that Europe will be a key player in the industry.

“For instance, our first breeding programme is in Bulgaria, so we believe that there will be an important role for Europe to develop the insect industry.”

One of the most promising uses of insect protein is to replace fishmeal, ground down from the billions of wild fish that are hauled from the sea each year and used in fish farms. 

Premium protein in feed, especially for fish, traditionally has come from grains and fish caught in the wild — principally off the coast of South America — at a time when fish stocks have been falling. One tonne of insect protein, however, could mean five tonnes of fish in the ocean are protected. 

Soyabeans and corn are also important feed ingredients, but large-scale farming of them has been blamed for soil degradation. Meanwhile, overuse of chemical fertilisers has caused dead zones in coastal waters, threatening fish stocks. 

France and the Netherlands already have big insect-producing facilities, manufacturing bugs for pet and fish food. 

The fishmeal market is a key one for French company Ynsect, based in Dole, in the east of France. Founded in 2011, it transforms mealworm beetles into animal and plant nutrition.

Ynsect has been operating a vertical farm since 2016, which minimises the amount of space needed. 

“We know we need to increase agricultural production by 70 per cent by 2050. There is only five per cent of arable land available. So, we do more with less available land,” says Antoine Hubert, Ynsect’s CEO. 

The automated system moves the trays of mealworms around the factory at various stages of the production process. The company has some 40 technology patents, and it’s raised over $400m, making it the most highly funded upstream agritech start-up outside the US. 

At present, due to health concerns related to BSE, or mad cow disease, EU legislation effectively limits the type of animals that can be fed with insect-based protein. Approval for insects for feeding other animals such as poultry had been due in the EU this year but has been held up by the pandemic. 

As they wait for that EU approval to expand the potential market for feed, production is already running high at Ynsect. 

“We were at five days a week. Now we go to six days a week and we will reach seven days a week here at maximum,” says Hubert. 

Ynsect is currently building a second factory in Poulainville, Ynfarm, which will be the world's largest insect farm, with an aim to produce more than 100,000 tonnes of product per year.  

There are challenges ahead for the industry. It has taken many years for plant operators to perfect the economics of the industry given the difficulties of scaling production, changing government regulations, and the fact that producers must find a reliable source of food waste at a time when many retailers and consumer groups are making strenuous efforts to reduce it.

Also, researchers at Sweden’s University of Agricultural Sciences have argued that insect farming has yet to prove its sustainability credentials, highlighting what they said was a lack of research into areas such as waste management and the potential for accidental release of insects.

But those in the industry are bullish about its prospects.  

“We're creating something new. It has been a long way to get to where we are, but right now, we're getting the traction that we want and that we need to move to the next stage,” says Raynaud. 

Meanwhile, Ynsect’s Hubert has no doubt that in the future, insect protein will have to play a role in the global food chain. 

“We're here to improve the system. We will still eat meat. We will see eat fish. We will still eat plants, but we need to be more efficient due to global demand and the overall constraints we have with this physical world.”

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