The journey of scaling up both at company level as well as at sector level requires building up a lot of know-how and capital. It is inevitable that this results in a higher ‘death rate’ during the start-up phase and many companies that initially joined the sector have already disappeared. Nevertheless, the insect sector has passed a critical threshold and is now building momentum.
Lars-Henrik Lau Heckmann
Head of Business Development
Better Insect Solutions
Within the last few years, the insect sector has created a lot of critical mass. The main markets for insect protein meal and oil are pet food, aquaculture, animal feed for poultry and pig as well as food for human consumption. Producing insects for food or feed overall follow the same production principles, but from a commercial perspective, the pet food and feed-based markets constitute the main potential for the insect sector to scale production over the coming decade(s). Recently, insect farmers, particularly in the EU, were challenged by legislative barriers that was inhibiting them from selling their products as feed for aquaculture, poultry, and pigs. This challenge is now in the past, and the next step to be taken within the legislative space is to widen the application of more feeding substrates that are currently limited or prohibited in use (e.g. former foodstuffs containing meat and fish). The regulatory landscape has clearly become far more manoeuvrable for insect farmers internationally. However, there is another major challenge that clearly stands out, and which undoubtedly is the main challenge of the insect sector at present. This challenge is scaling up production to meet the need of the market.
Since the insect sector emerged at international level about a decade ago, the insect farmers have had focus on scaling their production volume. They have gone through the process of domestication and initially many had high hopes to moving fast forward, but insects are not per se simple to domesticate. Just like with other livestock farming, it is key to know the biology of the farmed animal to create an understanding of how to manage it. In the ‘early days’ some insect farmers already had decades of know-how, such as Kreca from the Netherlands who produce the mealworm Alphitobius diaperinus; however, they had run their business since the late 1970’s based on selling small volumes to a high profit market, namely exotic pets. Today Kreca (also formerly known as Proti-Farm) have become Ynsect NL Nutrition & Health B.V. (part of Ynsect) and they have scaled their production and business. Yet, like other insect farmers in operation 10 years ago, they had no experience with operating a large-scale production with volumes in the 1,000’s of tons of insect larvae per annum.
Scale-up project (Q1-2022 to Q3-2023) of black soldier flies (BSF) at Enorm in Denmark. The pilot production (buildings to the upper right) of approx. 500-ton fresh BSF larvae per year is equipped with solutions for climate, feeding, breeding, air cleaning and heat recovery by Better Insect Solutions. The scale-up is ongoing with pupa and fly (breeding) sections under construction in the area left to the pilot. During 2022/23 the construction of nursery and grow-out sections as well as on-site processing will be initiated. When running at full capacity during 2023, the site is dimensioned to produce 36,000-ton fresh BSF larvae per year (Photo by chfoto.dk).
Starting from a small-scale/low-intensity production to becoming a large-scale operation is not a linear process. The approach to producing insects at large-scale is fundamentally different to small-size farms. At large-scale it is critical that at least three major systems are running in a functional and concerted manner. These systems cover: 1) a logistics and automation system for handling the production crates housing the insect larvae; 2) a climate system ensuring uniform and robust climate at all times; and 3) a feed kitchen for mixing and precise delivery of high daily volumes of feed. Apart from the logistics and automation system this is not different from running a successful large farm with other livestock. Like other animal farming, important parameters like feed supply, maintaining production within environmental thresholds and cost-savings through heat recovery also apply. In addition, onsite processing of the larvae into protein meal and oil may also be relevant requiring technology and skills in-house that are very different to conditions within conventional animal farming.
Furthermore, as mentioned briefly above, the biological knowledge with regards to insect farming is also critical and was not widely known or even available initially. Here the engagement of academic stakeholders was key during the early days of the insect sector ensuring that know-how became available at sectorial level. Academia supported, and are continuing to do so, the scale-up process with generation of new knowledge to ensure animal performance such as, nutritional requirements of the various insect species, disease mitigation and description of physiologically optimal environmental conditions. Since the early 2010’s, many academic and applied research institutes have become involved across the major regions globally. Some of the pioneering institutes were e.g., Wageningen University (NL), University of Copenhagen (DK), Danish Technological Institute (DK), EAWAG (CH) and Texas A&M University (US). At present there are a large number of research institutes globally that have become engaged in supporting the insect value chain ensuring future innovation for the sector.
Within the last few years an ecosystem of technology providers has grown internationally that cover all aspects of the insect value chain from pre-treatment of feeding substrates to processing of insect biomass into protein meal and oil. This foundation is pivotal to ensure a robust and rapid scale-up of the insect farming sector. At Better Insect Solutions, a new brand powered by Big Dutchman, Inno+ and SKOV, we contribute to securing this foundation by applying proven technology from pig and poultry farming delivered in re-designed systems for insect farming combined with new product development. Our presence, as well as that of competing technology providers, de-risks the embarking on a major insect farming project. This has, amongst other things, made the investor interest increase significantly in the last few years.
Today, there are several producers globally operating at >1,000 tons of insect biomass per annum. In the coming years there will be a many-fold increase in the number of insect farms passing that level and becoming large-scale operations already by the end of this decade. This forecast is backed by various market analyses that have been conducted over recent years. Furthermore, this is supported by scale-up plans of ongoing operations as well as the many projects that are currently underway to being executed across the regions within the next one to three years. Some of the publicly-known companies that are presently active in scaling up include e.g., InnovaFeed (FR+US), Protix (NL), Ynsect (FR), Agronutris (FR), Enorm (DK), Pronofa (NO), Nutrition Technologies (MY), Entobel (VN) and FreezeM (IL).
The journey of scaling up both at company level as well as at sector level requires building up a lot of know-how and capital. It is inevitable that this results in a higher ‘death rate’ during the start-up phase and many companies that initially joined the sector have already disappeared. Nevertheless, the insect sector has passed a critical threshold and is now building momentum. During the next few years, we will see a massive increase in output that will continue to increase for decades to come. In the third and final article ‘Insect farming goes commercial: Future perspectives’, to be published in the next issue of Feed Planet Magazine, you will get the opportunity to read more about what lies ahead and how the insect sector is likely to be shaped in the future.
ABOUT THE AUTHOR
Lars-Henrik Lau Heckmann is Head of Business Development at Better Insect Solutions, an international leading technology provider of total solutions for insect farming. He has a background in biology and insect farming with extensive experience in R&D and business development. During 2014-2020, he was developing and leading the business area “insect farming for feed and food” at the Danish Technological Institute. In parallel, he was active in task force groups at IPIFF during 2016-2020 as well as a member of the executive committee of IPIFF from 2018-2020.