Thanks to their low carbon footprint, insects are becoming increasingly popular as a cheap and alternative form of protein. With the insect-farming business forecast to be worth more than $4.1 billion a year by 2025, according to researcher Arcluster, impact investors have caught the bug.
Earlier this year, the European Food Safety Authority (EFSA) gave its safety approval for human consumption of dried yellow mealworm, paving the way for edible insects across the EU.
Up to now, leading insect breeders and producers of insect-based foods were held back in their product development and market growth because their products were only allowed in some EU countries.
In the UK, the Netherlands, Belgium, Denmark and Finland producers were allowed to sell their products.
But without the EU food watchdog’s official approval they faced a ban there too after a new EU law in 2018 had stipulated that insect-based foods needed novel food authorisation from the EU.
Pending that decision, the companies in those countries were allowed to continue to operate, but they were frustrated by the lack of EU regulatory approval.
Mealworms are beetle larvae rather than worms and are already used in Europe as a pet food ingredient. But soon the grounded insects could be used as flour to make biscuits, pasta and bread or used whole and dried in hamburgers or curries.
The UN’s Food and Agricultural Organization (FAO) estimates that European food production emits more carbon dioxide than Europe’s entire car fleet (704 million tonnes, versus 656 million).
It is estimated that 15 to 20% of global warming relates to food production. Consumers are responding.
Already in 2019, the Eat-Lancet report was noting a global shift in our eating patterns to reduce emissions’ and a major shift from meat to increasing plant sources of protein.
The beef industry in Europe and the US is a particular emissions culprit. Giving up beef may be one of the most important climate actions individuals can make. The Covid-19 pandemic has amplified consumers’ concerns.
By the summer of last year, plant-based food sales were up 243%. “2020 was the year everyone discovered plant-based eating,” wrote New Food, a trade journal for the food industry. It is estimated that 20% of Europeans are now at least flexitarians.
In four years, alternative proteins are expected to capture 5 to 10% of the $2.96 trillion market for animal products according to AgFunder, a leading US foodtech venture capitalist that launched a $20 million ‘Alt Protein’ fund in 2019.
The ‘yuck factor’
Many companies, supported by impact investors, are responding to the demand for alternatives for dairy and meat, whether it’s plant, cell or insect-based.
But alternative proteins certainly do have their opponents. Giovanni Sogari of Parma University says that it will take time for consumers to overcome the ‘yuck factor’ of mealworms.
French agricultural Minister Julien Denormandie made it clear that France would never agree to cell-based protein.
The French consumer watchdog the Confederation Locale du Cadre de Vie (CLCV) recently issued a worrying report on plant-based products.
It pointed out that many of them may appear healthy, but are in fact ultra-processed with numerous additives, and misleading labelling.
An alternative solution to the ‘protein switch’ approach is suggested by a recent study from Belfast University.
This looked at pig farming -pork is the world’s number one meat- and found that switching the sourcing of animal feed could bring massive reductions in emissions. What we feed our livestock accounts for between 75 and 80% of carbon footprint.
This is why some impact investors are concentrating less on mealworms for humans, and more on feeding them to animals.
AVF, a French fund managed by Seventure Partners, has been focusing on livestock feed for the last three years, in partnership with the feed company Adisseo.