Grub’s up: The case for edible insects

Eating insects as a replacement for meat should be no big deal for anyone. After all, research suggests the average individual already eats 140,000 insect pieces each and every year.

| 6 min read

Of course, these insect pieces are trace containments in other foodstuffs, such as flour, fruit, or nuts. However, more than two billion people worldwide enjoy insects as part of their daily diet. Most commonly eaten in Africa, Asia and South America, it is of no surprise that the hunt for protein alternatives to meat has led to rising interest in the insect world.

The plant-based meat market has been booming for the last couple of years as vegan diets rise in popularity. Beyond Meat, which produces burgers from soy protein and is regarded as this transformative industry leader, has a market valuation of around $9.5bn after floating in 2019 – with the shares currently not far off the all-time highs seen in the trading frenzy immediately after its flotation. This has led to many traditional food companies getting involved in the industry including Nestle, Tyson Foods and even Kellogg and PepsiCo moving into this market segment.

Next Gen, which will launch its plant-based 'chicken’ brand TiNDLE in Singaporean restaurants next month, secured another small round of funding this week. The company raised $10m in seed funding from investors including Singapore sovereign wealth fund Temasek. Laboratory grown meat is also starting to move towards commercialisation. Last week, Israeli group Aleph Farms said it had cultivated the world’s first slaughter-free rib-eye steak. It is made using live cells to 3-D print the ‘meat’.

Healthier eating and the environment

The reasons driving the move to alternative protein are health and environmental concerns. Many, including Microsoft founder and alternative meat investor Bill Gates, believe that reducing emissions from sectors such as agriculture and food will be essential to meet global warming targets. Plant-based meat alternatives can help cut meat consumption but, although not vegan, protein from insects is arguably a better alternative than highly processed plant material masquerading as meat. Insects too are rich in protein, healthy fats, iron, and calcium, and low in carbohydrates.

Farming insects produces significantly less greenhouse gas emissions than raising cows, pigs, or chickens. Indeed, the United Nations Food and Agriculture Organisation estimates that 14.5pc of greenhouse gas emissions come from farming livestock.

Meat production also uses a lot of land – around 70% of the world’s farms – but insect production takes relatively little space as it can occur vertically. As well as thriving in congested habitats such as cities, bugs also require a fraction of the water and feed that larger animals need until they are ready for slaughter. Food security is also moving up the agenda after the Covid-19 pandemic demonstrated the problems associated with trade disruptions in a globalised supply chain.

The sustainability aspects of the industry are also important, as environmental, social, and governance (ESG) criteria rise up the agenda of most investors. The process is also arguably less cruel.

The big issue – as is seen with laboratory-grown meat – is consumer resistance. A survey undertaken last year by the European Consumer Organisation found that just 10.3pc of people would be willing to replace meat with insects, with 76.8pc of respondent saying they would never eat bugs at all – the remainder were unsure.

So, the industry is likely to initially be focused on pet food and animal feed – the latter potentially being of major significance for the world’s agricultural farmers. The estimated volume of insect protein produced in Europe amounts to a few thousand tonnes, and the Brussels-based International Platform of Insects for Feed and Food expects this to reach 1.2m tonnes by 2025.

Rabobank said this week that it believed the market could produce half a million tonnes of food by 2030. “The insect industry is on a path to increase scale, backed by investments and partnerships,” analysts at the Dutch bank noted. “Efficiency gains due to increasing technology, automation, improvements in genetics and legislative changes will also enable costs to decrease.”

AI developments

Evidence of investor interests in the automation of insect production was seen this week after Better Origin, a Cambridge-based biotech start-up, closed a funding round of around €2.5m. The company manufactures insect mini-farms that converts food waste into high-quality animal feed in the form of insect larvae. Its systems rely on automation and machine learning technology.

One country where this technology is likely to be of major interest, is China, the world’s largest importer of animal feed. At the end of January, China booked its biggest purchase of US corn ever, according to the US Agriculture Department. It bought more at once than any country except the Soviet Union 30 years ago, as it tries to meet a surge in demand for animal feed. The move drove up the price of corn, potentially increasing the cost of food produced for human consumption.

US corn and soybean farmers should not be too concerned yet, however. The industry is still at its fledgling stage and investment in the sector is mainly in private funding rounds as seen with Better Origin. But the market for insect animal feed is likely to grow significantly and become a major investment theme during this decade.

The insects for human consumption market is also likely to grow at pace – with celebrity endorsements adding to its popularity. As Hollywood actress Angelia Jolie famously claimed while she and her children tucked into insects in Cambodia: "Crickets, you start with crickets. Crickets and a beer – and then you kind of move up to tarantulas.”

A version of this article appeared in the Daily Telegraph.

Nothing on this website should be construed as personal advice based on your circumstances. No news or research item is a personal recommendation to deal.

Grub’s up: The case for edible insects

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