Why insects are gaining popularity as feed and food

Investments contribute to the development of the insect breeding industry. At this stage, market researchers are more likely to see the potential of insects as food rather than as food. However, the situation may change in the long run.

Increasing investor interest spurs insect growth

Investments in the sector ensure rapid production growth. In 2018 alone, 40% more funds were invested in the industry than in the previous four years.

Some of the largest financial investments last year were received by black lion growing companies – British AgriProtein, Dutch Protix and French company InnovaFeed.

A large influx of capital was also received by the French company Ynsect, which produces a flour worm. These companies stand out with their modern business models. They are based on establishing partnerships with various participants in the production process, expanding the range of products, and increasing geographical distribution. Partnerships range from joint ventures with engineering companies for the processing of raw materials to cooperation with leading supermarkets selling animal protein products.

The estimated volume of insect protein produced in Europe is several thousand tons, and by 2025 it will reach 1.2 million tons. The increase in production will occur due to the emergence of a number of new large production enterprises, as well as the geographical expansion of existing ones.

Great potential as an ingredient for fish feed

Now many insect companies have turned their attention to the aquaculture market. In this area, there is a need for a high-quality protein alternative to fishmeal – a unique ingredient in fish feed. Despite the fact that the cost of protein from insects is higher than that of fishmeal and its analogues, its higher functionality can justify it.

It is important that insect protein reduces the dependence of fish on marine ingredients, and also has a greater nutritional value. Reducing production costs and obtaining protein with a high yield will allow insects to take a prominent place in the aquaculture market.

The near future: higher potential in feed quality than in food

At the same time, for the further growth of the insect market as food products, manufacturers have only to gain the trust of consumers. Edible insects are very nutritious and beneficial. But the current level in the world of perception of insects as a food product is still very low, and their market share is insignificant.

Trends in society towards the use of environmentally friendly and natural food will contribute to the development of the sphere. But at the moment, taste and price are still a decisive factor. Therefore, the long-term prospects for the edible insect market depend only on the growing recognition of consumers.

Changes in law may open up more opportunities.

Access to capital is necessary to support the growth of the insect market. The problem is in regulatory barriers in legislation. So, in the EU there is a separate regulation for the production and sale of insects as food or feed. Feed material for breeding insects also belongs to another regulatory category.

Legislation is still confusing, but there are also positive developments. As of July 2017, EU regulations allow the inclusion of proteins from insects in fish feed. The industry expects that by mid-2019 they will also be allowed to use insect proteins in feed for pigs and poultry.

Other industry expectations for the next two years are that the volume of permitted feed substrates will expand. It is difficult to assess when exactly these reforms will be adopted by law, but when this happens, there is no doubt that insect production will begin to grow at an even faster pace.

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