Unleashing the potential of the European insect production sector: market and regulatory perspectives

05 April 20199 min reading

Christophe Derrien Secretary General ‘International Platform of Insects for Food and Feed’ (IPIFF)

EXECUTIVE SUMMARY With the world population expected to top 10 billion by 2050, food production needs to increase by 70% and the demand for animal products is expected to double. In the view of those forthcoming challenges, insects provide a solution to the demand for sustainable and high-quality protein to feed both this growing population and livestock.

EU Policies and Legislations can further boost the development of this young and innovative sector: Today, insects can be used in fish feed and pet food within the European Union. The next step will be to authorise their use for poultry feed and other livestock before widening the range of allowed insects’ substrates.

Today the ‘International Platform of Insects for Food and Feed’ (IPIFF) plays (and will continue to play) a pivotal in unlocking these EU legislative opportunities while supporting producers in the implementation of EU standards.

However, the role of the IPIFF association is not confined to ‘representative’ functions – i.e. playing interface between insect producers and the EU institutions – or advocacy activities (in a strict sense) to influence decisions originating from the EU institutions. IPIFF is also a ‘driving force’ towards the establishment of EU regulatory standards for insects as food and feed. More generally, IPIFF gears efforts towards building and/or consolidating the credit or reputation of the sector, not only vis à vis EU public authorities but also towards EU food and feed chain partners and the wider public.

Estimated volumes of production of insect protein until 2025 in Europe (In thousands of Tons)

INSECTS, A PREMIUM COMPLEMENTARY SOURCE OF PROTEINS FOR ANIMAL FEED Insects represent, among animal protein sources available, a very promising and reliable solution to European livestock producers: While Insects are a natural component of diets of animals such as carnivorous fish, poultry and pigs protein, their quality is found to be well suited to the needs of those animals, owing to the concentration levels of protein or their amino acid profiles.

- Insects are high in protein – from 50% to 82 % (as a dry product) and can be added to animal feed – with up to 40% insect content for fish feed and 30% for chicken feed; - Insects also contain high levels of key amino acids (e.g. Lysine leucine, arginine) contributing to explain promising results in terms of animal growth performance.

Insects also have a suitable fatty acid profile and contain bioactive component like antimicrobial peptides and chitin which have immune-boosting properties .

Most trials conducted so far - i.e. trials aiming at incorporating insects into feed formula of feed and livestock animals - showed very promising results. Over last months, several commercial trials have been made on farmed fish, notably in the wake of the EU authorization of insect proteins - from seven insect species EU – in aqua feed since 1st July 2017.

Substrates used by IPIFF Members to feed their insects (Source: IPIFF survey March 2018)

This showcase of solid market acceptance, notably from European fish farmers and aqua feed producers, who are keen on incorporating these new materials into their feed formula: today, roughly 1,000 tons of insect proteins have been commercialized by European insect producers since the above authorization is effective. If the aqua feed market consumes approximately 50% of European animal feed made from insects, according to IPIFF figures , this is expected to rise by 75% by 2030.

We do believe insect producers should now continue to work proactively with feed manufacturers towards fully understanding the complexities of insect protein as an ingredient, notably to explore possible synergies with currently used/mainstream materials with ‘new’ proteins sources yeast, algae, notably to reduce nutrient deficiencies in animal feed formula.

However, some of the key challenges facing the insect industry to successfully enter the aquaculture market remain the small volume availabilities and of the currently unfavourable market economics of replacing a high protein ingredient such as fish meal with a more expensive insect protein. European insect producers can offset these ‘weaknesses’ by offering premium quality products.

This is notably already the case of the pet food market, which remains a mainstream market for European insect producers – i.e. authorized market segment at EU level: e.g. several companies incorporate insects in their feed formula notably as means to diversify their products’ range (e.g. in hypoallergenic products).

Although insect proteins (unlike live insects) are today not allowed for use in poultry feed, EU insect producers see this market as a promising opportunity .

THE INSECT SECTOR HAS NOT YET ACHIEVED ITS FULL POTENTIAL Yet, the insect sector is still in its infancy, and it will take time before it can deliver sufficient amounts to farmers and the feed industry and thereby contribute effectively to solve the protein deficit problem as identified in the recently published EU Protein report. The contribution of the sector to global challenges is therefore very limited especially in a context where global demand for animal products and fish products is growing steadily.

Yet, one may sketch more ‘optimistic scenarios’ if relying on economic production forecast developed by IPIFF. By February 2019, European insect producers had raised more than 500 million Euro through investment (and were expected to raise much more in the next few years (public investment, private equity funds or, or venture capital through Banks, assurance & Industry). These funds will serve to increase the scale of production of insect farms and therefore increase the price competitiveness and stability of their products compared to other sources. While insect protein is not expected to replace current protein sources, it can ‘steal’ substantial share of it, notably in combination with other new protein sources.

Besides, the real potential of the sector should be looked at, owing to the ‘circularity potential’ of insects, who can grow using underexploited - and therefore affordable - resources, thanks to their ability to convert low-value biomass into high-quality animal proteins and reintroduce them in the food chain. In spite of EU legal restrictions applying to the insects’ substrates, the European insect sector offers today an outlet and a sustainable alternative to many resources, which would otherwise be wasted. It does therefore not compete with and is complementary to the feed industry: for example, insect producers use co-products from fruit and vegetable supply chains or from the cereal agri-food industry or products from local food processors (e.g. pastry and biscuits) or supermarkets which are unsold for technical or logistical reasons: the so-called ‘former foodstuffs’.

IPIFF roadmap on the use of insects in animal feed

Of course, further expansion of the sector will command that further research on the use of innovative substrates can be conducted so that the respective EU legal barriers can be unlocked in the near future.

But of course, those continued efforts should not compromise of feed safety objectives: notably, further research will have to be made to determine whether those materials classified as high risk (due to high presence of contaminants) can bio accumulate in insects and therefore present adverse effects on animals.

UNLOCKING EU LEGISLATIVE OPPORTUNITIES: IPIFF MISSIONS AND ACTIVITIES In order to exploit its full potential, the insect production sector therefore relies on a clear and solid legislative framework, supported by appropriate scientific evidence and risk assessment procedures. Along that line, IPIFF has developed a three-step plan to have insect protein authorised for animal feed and subsequently to allow new substrates to be used for feeding insects.

Besides, guidance and appropriate controls instruments are needed for insect producers and competent authorities to enforce those rules: e.g.

- IPIFF has been active in the testing of official analytical methods to detect precisely the presence of insect proteins in animal feed, while fine tuning those instruments to differentiate the insect authorised species from the others. - Furthermore, our association unveiled a guidance document on the best practices in quality and hygienic insect production. Pending discussion and enforcement by the European Commission and national competent authorities, this document constitutes a useful tool for insect producers to develop a robust food and feed safety management system. - Finally, IPIFF is actively involved in the preparation and development of EU hygiene ‘rules’ for the production and processing of insects for human consumption.

Authorising new outlets in the food chain (food and feed) and supporting operators in the implementation of those respective regulations constitute (and should remain) the core missions of association. As representative organisation for the insect sector in general, we also strive to look at the bigger picture, by trying to connect the sector with wider scope initiatives:

- Notably, we strive to ‘build bridges’ with other regulatory opportunities on other areas such as insect organic production or the EU fertilisers legislation - We also strive to highlight the coherence of insects as feed with other EU policy subjects such as the EU protein plan or the EU Circular Economy Package.

The next 3 to five 5 years will be a turning point for the development of the sector and these developments are strictly interconnected with the EU policy and regulatory agenda (e.g. implementation of EU legislation and ‘concretization’ of new opportunities). Despite of many breakthroughs experienced by our association (e.g. aqua feed authorization or publication of the Guide on Good Hygiene Practices), propelling IPIFF to the rank of a leading and unavoidable European professional association (51 members from the active insect sector majorly dominated from the EU) and we are still far from having achieved all the sphere of possibilities.

Despite positive (nutritional, sustainability, etc.) credentials associated with insects and the overall favorable EU policy context for the sector, one must, however, acknowledge that these objectives are not an easy reach:

- On one hand, the EU political and regulatory arena remains complex –owing to decision-making processes and the variety of actors decisions involved – the most difficult part is about convincing policy makers to reform the current ‘legislative frames’ to make those more suited to insects’ animals and insect production realities.

- A lot has to do with building consensus among sometimes very diverse interests and/or positions at IPIFF level but also building and/or consolidating alliances with other actors from the food and feed chain (e.g. farmers and feed industry) for whom the subject of insects is not necessarily on the top of their political agenda.

These efforts may yet be worth it.

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