(Bloomberg) — For their first attempt at making food from insects, Sean Warner and Patrick Pittaluga started with a bug burger.
Their patty, which combines black beans and black soldier fly larvae, was cooked in their Georgia Tech apartment shortly after the United Nations published an influential report in 2013 touting insects as the future of food, a natural resources that will contribute to rising meat costs and climate concerns as the global population grows.
But bug burgers didn’t taste good, and soon the entrepreneurs pivoted their Grubbly Farms brand to focus on insect-based food for dogs and chickens.
The pivot from feeding people to furry creatures is a practical adaptation of what many startups and established brands have seen in their attempts to build a market for these substances: Whatever goodness in environment, people are not ready to eat bugs. But they are quite happy to feed the critters to their pets.
Animal feed is fueling demand for insect protein, which could jump 4,900% from 2021 to half a million metric tons by the end of the decade, according to a Rabobank report.
Those prospects for growth attracted venture capitalists to the new industry. Investors plowed $76.77 million into insect-based food companies in 2022 and another $14.92 million last year, according to PitchBook data. Mark Cuban and Robert Downey Jr. are among the investors who have put money into insect protein companies.
Startups face a tricky balancing act as they try to create demand for their products – one that has led them far from catering to people.
“Being too early is just as dangerous as being too late,” says Phil Poirier, co-founder of Montreal-based Wilder Harrier, whose products include cricket dog snacks and black soldier fly dry food.
Health Appeals
Diners have proven a tight crowd for insect protein evangelists. Only a quarter of US consumers are willing to include insect ingredients in their regular diet, according to a 2021 YouGov survey with similar findings for major European markets such as Germany and the UK.
The reluctance shows that some people are uncomfortable with the idea of eating bugs — but also the challenge that insect proteins don’t have a certain flavor or nutritional value.
“Outside of sustainability, in the human food application, edible insects don’t exactly solve a clear pain point,” said Alessandro Di Trapani, the co-founder of insect dog food maker Grub Club Pets .
That leaves the animal market as more fertile territory. Pet food made with crickets and black soldier fly larvae is sold by major retailers including Petco and Chewy.
Tyson Foods announced a partnership in October with insect supplier Protix to build a facility in the US to produce insect proteins and fats for use in pet food and animal agriculture. Mars Inc. sells of dry cat food made with black soldier fly larvae in the UK.
Insect-based foods have caught on in pet aisles with product descriptions that appeal to health-conscious consumers, including claims that the food does not trigger allergies in dogs. and good for sensitive stomachs.
Anne Carlson, the founder of Jiminy’s cricket-based pet food, sees a stronger business model — and potential for greater environmental impact — in feeding dogs.
“Dogs eat the same thing every day, and if you replace it with a sustainable alternative, you basically get all of their eating occasions,” said Carlson, who makes dog food, treats and dental chews. . “That’s not the case with people. Best-case scenario, maybe I’ll get you breakfast every day with a bar.”
So far, pet food has driven volume growth in the insect protein market, said Gorjan Nikolik, a senior analyst at Rabobank who co-authored the report on the segment’s potential.
But he expects rapid change: As more research is conducted and larger-scale production lowers prices, Nikolik sees aquaculture becoming the largest consumer of insect proteins, using them as fish feed and other seafood. Pet food, however, is still expected to account for about 30% of demand in 2030, he said.
Most livestock and farmed fish are still fed traditional soy or fishmeal, which is cheaper than insect feed. As researchers assess whether the insects may have “functional benefits” such as supporting faster growth or lower mortality rates, Nikolik said demand from commercial farmers or feed products could increase. that.
‘Multi-Decade Process’
Many insect-based pet foods in the US are black soldier fly products for dogs. That’s because the ingredient is the first insect protein to be formally approved for use in adult dogs by the Association of American Feed Control Officials in 2022. The association doesn’t regulate the products, but the designation means the ingredient is deemed safe and effective by the association and the FDA Center for Veterinary Medicine, according to AAFCO executive director Austin Therrell.
Dried crickets received formal approval for use in adult dog food in January, and mealworms received provisional approval the same month. No insects have been approved in cat diets, although discussions have taken place around black soldier fly larvae, Therrell said.
Meanwhile, the industry did not give up on one day feeding the masses of people.
Although Grubbly Farms never went ahead with its insect burger patty, co-founder Warner maintains that “a chef could have spiced them up a bit” and made them tasty enough to sell. He still hopes that insects will become a staple food for humans, though he thinks it will be a “multi-decades process.”
Jarrod Goldin, who co-founded Ontario-based Entomo Farms in 2014, said he hopes people’s adoption of insect products “will be more significant” after a decade. The company still believes this will happen, but right now, about 70% of the crickets it grows go into pet food.
At this point, people are more likely to buy insect-based food when they see it as a way to “fight” the culture of feeding corn and soy to animals that don’t naturally eat those ingredients, says by Aly Moore, chief communications officer. official at Oregon-based Chapul Farms.
The company mainly sells black soldier fly products for use as animal feed and fertilizer. Its human-grade cricket powder accounts for only 5% to 10% of sales.
“It makes a lot of sense to feed insects to animals that don’t care if they eat bugs the same way people do,” Moore said.
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