With the pandemic changing centuries-old consumer habits, there could be another taboo threatened with extinction: edible insects. After decades of squeamishness, we might finally be ready to allow creepy crawly animals into our food supply chain.
Bugs seem to have a moment. Last week (just a day before a fly went global during the Vice Presidential Debate), French insect breeding startup Ÿnsect announced it had raised $ 372 million, a huge boost to the niche industry and accelerating the company's plans for large-scale production USA The investments even had a touch of Hollywood fame: Robert Downey Jr.'s environmentally-minded FootPrint Coalition invested $ 224 million in debt and equity in the startup.
"I'm digging it," Downey said on the fund's website, announcing his investment in the company with the inevitable insect pun. "The Ÿnsect process does not produce any waste and is in line with the United States' sustainability goals."
Indeed, the dire pressures on land and oceans of the world make a strong case for insect breeding. According to the Food and Agriculture Organization of the United Nations (FAO), about 26% of the world's farmland is used for grazing animals, and at least a third of all crops grown are used for animal feed, $ 500 billion-an annual Industry that relies on staples like soybeans and corn, which are much less protein than simple insects, and which are far more expensive to grow. The oceans are no better: According to FAO statistics, around 22 million tons of fish caught in the wild were ground for fishmeal in 2018 and not served to humans.
Nevertheless it took years for Ÿnsect to convince the industry. “Three years ago we pushed our technology forward and endorsed it,” says CEO and co-founder Antoine Hubert, who founded the company in 2011. The shift appeared to have started with the pandemic as months of lockdown weakened the world and worldwide supply sent chains in disarray. “In the last few months, more and more companies have come to us,” says Hubert. "Agricultural companies want to aggregate their waste."
Rich in protein
The contrast to Big Ag could hardly be stronger. Ÿnsect breeds the larvae of the Tenebrio Molitor beetle inside A vertical factory that Hubert opened in 2016 in a modest industrial building in Dole, a town in eastern France near the Swiss border. When Fortune visited the factory in 2018, we observed conveyor belts with trays containing millions of writhing mealworms, all fed with agricultural waste collected from the area's farms. From this, Ÿnsect produces protein-rich animal feed and cattle feed – all without using a single hectare of land or pulling fish from the sea. Ÿnsect believes that it will take some time before we humans (at least in Western countries) feel comfortable eating insects ourselves. But by the time we do that, beetles are likely to become a growing, vital part of the meat, chicken, and fish we eat.
Antoine Hubert, co-founder and CEO of Ynsect, in 2018 with a handful of mealworm beetle larvae, fresh off the assembly line. Photo by Veronique de Viguerie
According to Hubert, Ÿnsect has signed contracts with feed and fertilizer companies valued at around 105 million US dollars. He claims The company has raised approximately $ 425 million in total investments, more than funding all of its start-up insect breeding competitors combined, including Canadian Enterra. But established players also invest a lot of money. In January, NYSE-listed Darling Ingredients acquired a 100% stake in Ohio-based EnviroFlight. They all have a large market in mind for protein-rich insect-based feed and ultimately food products.
In this last round, Asatnor Ventures in Belgium was the main investor in Ÿnsect. There were also investments from French banks, the deep-tech fund Supernova in France, the Armat Group in Luxembourg and Hong Kong's Happiness Capital.
For the agricultural scientist Hubert, success has been a long time coming. He spent years researching insects as a source of protein. In the late 2000s, he began teaching school children how to grow crate worm farms by feeding them organic waste like banana peel. Realizing he could do the same on a large scale, he found a farmer who raised insects for fish bait and recruited him to help start Ÿnsect.
Hubert is now building a much larger factory that is due to open in a year's time in the hometown of Amiens of French President Emmanuel Macron. The company is also looking for a location to open a US facility, possibly as early as 2022. Hubert says it is likely a joint venture with a Big Ag company, some of which are already in private talks with Ÿnsect. "It will be easier for us to rely on them to issue permits, subcontract construction contracts, and so on," says Hubert.
Hubert plans to start selling insect-based pet foods in the U.S. before next summer after completing trials with the Food and Drug Administration and the U.S. Department of Agriculture.
Indeed, insect farming is facing complex regulatory hurdles in both the European Union and the US. In Europe, farmed insects are subject to the same regulations as other farm animals, and it took years for Hubert to be approved for the sale of his fishmeal products. Next are poultry and cattle, and finally humans; he expects E.U. Release for human consumption sometime next year. In the US, too, he worked for almost two years to get permission to sell pet food, which he thinks seems natural.
"Just the beginning"
That's just the beginning. As shareholders urge farming companies to cut their carbon emissions, several have started thinking about how to recycle the huge amounts of by-products and waste that are created in mass production. "Investors are much more aware of the earth's problems," says San Francisco-based food entrepreneur Nicolas Bernadi, who sits on the board of Ÿnsect. "I am convinced this is just the beginning"
Bernadi says he anticipates tremendous growth in the US, where the market is wide open. If the agribusiness focuses on insects there will likely be a lot of competitors, but Ÿnsect's lead gives it a distinct advantage. "The learning curve is long," says Bernadi. "You are talking about agricultural species that nobody really knows." In addition, Ÿnsect could become more attractive if companies focus more on sustainability. "Investors will want to put their money where it has a good effect on the planet," he says.
According to the data, this good effect seems undeniable.
Right now the world can feed itself. To keep up with population growth, agriculture needs to change drastically and quickly, especially as floods and forest fires are more likely to destroy crops. The FAO forecast is bleak. "There is enough arable land to feed 9 billion in 2050 if the 40% of all plants produced for animal feed today were used directly for human consumption," it says. "This is crucial in the context of climate change."
With the available land squeezed, soon there may not be a better way to feed all of the world's farm animals than by breeding insects in large numbers – all indoors. Movie stars can dig that.
April 7, 2020: This article has been updated to include the names of Ÿnsect's non-US investors.
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