Technological and commercial readiness of insects

 

Following the regulatory approval of the most common edible insects as novel foods, including mealworms, and the expansion of the list of food-producing animals that can be fed with insects, the EU market has reached the highest level of technology readiness (i.e., TRL 9) and is now undergoing industrial and market scaling up. However, the scaling up is at a more advanced stage for insects as feed (CRI 3) as compared to insects as food (CRI 2) .

 

Edible insects are still subject to few key legal constraints that are slowing down market developments. As already referred above, the novel food authorisations that have been approved to date can only be exploited commercially by the respective applicants.

 

While other food companies can buy approved insect formulations directly from those applicants or their licensees, this situation may limit in practice technology repeatibility by other competitors and market entrants for a few years. In addition, there are a few other insect species whose approval as novel foods is still pending at EU level (e.g, Gryllodes sigillatus, Apis mellifera).

 

Consumer willingness

 

Also, now that several insect-based food products are on the EU market, the question as to whether and to what extent consumers will buy and include them in their diets remains to be seen. Lastly, while consumer research has so far generally focussed on consumer willingness to try edible insects, very few studies analyse consumer willingness-to-pay for those products.[1] Considering current consumer prices of food products containing edible insects, future research in this area may contribute towards a better understanding of market demand vis-à-vis these food innovations.

 

Industrial capability

 

The EU insect sector has been steadily expanding in terms of industrial capability over the last decade for both food and feed though at a different speed and with distinct patterns.

 

Regarding the insect food market, according to IPIFF, in 2020 the vast majority of the operators of this market segment were micro-companies (81%) very often with a total investment below 500,000 EUR. In the same year, the European workforce of this market segment amounted to less than 500 employees, while forecasts indicate that the sector could generate a total of 4,000 jobs by 2030.

 

The current level of vertical integration of the insect food sector is low. A majority of business players in this market segment only operate in the processing stage (notably, secondary processing aimed at formulating insect products for the final consumer), whereas less than a third cover all relevant production stages (i.e, insect farming, secondary processing, and sales).

 

Initially, in the absence of a EU harmonised regulatory framework for insects as food, most companies concentrated their activities in national markets where production and trade were allowed. Now, following the first raft of novel food authorisations regarding insects, the EU market has become the main target market.[2]

 

The further upscaling of the insect food sector depends on a combination of technological, financial and market factors, which include increased automation of large-scale insect farms, availability of subsidies and investments, and higher stability of the demand for insect-based products.[3]    

 

Insect feed sector

 

Concerning insects as feed, operators of this market segment were either already active in the pet food business or are newly established players. According to data from IPIFF, in 2021 insect feed operators were present in 20 European countries employing about 1,000 FTEs with 25,000 jobs forecast to be created by 2030.

 

Currently, the large majority of insect feed businesses are SMEs, but by 2030 larger companies are expected to dominate the market. The growth of the insect feed industry has been supported by significant private investments mainly to test products and build production facilities, which are estimated to be EUR 3 billion by 2025. Most insect feed operators are targeting national markets at present, but in the medium term are likely to pursue opportunities in international markets, including outside Europe.

 

The further upscaling of the insect feed sector is largely dependent on the possibility to use cheaper organic waste as substrates for insect rearing as a way to contribute towards full circularity, meet the demand of low-carbon footprint food products and reduce production costs.[4]