Irresistible Insects #7: Market Insight with Ÿnsect
Exclusive interview with the world's leading insect protein manufacturer.
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Good morning Market Shakers. We’re excited to bring a very special issue this week which features an exclusive interview with Ÿnsect, the world leading manufacturer of insect-based protein for animal and human foods.
Ÿnsect is a company of subtle yet significant transformations. Their name, for example, transforms ‘I’ into ‘Ÿ’ to represent the skeleton of insects themselves that are the essence of their products. Then there’s their extraordinary growth. Since their founding 10 years ago, they have grown to become the world’s leading and best-funded insect protein company (having raised over $425 million in funding). More significant still is the change Ÿnsect is subtly bringing about to our food chain - (re)introducing insects as its basis in order to avert climate change and biodiversity collapse, and address the global food crisis.
Ÿnsect’s vision to reform our food chain is a critical one. 37% of global greenhouse gas emissions currently result from food production, with livestock production accounting for more than half of this. Yet, to feed a projected population of 10 billion people in 2050, we need to increase food output by more than 70% ― a big ask considering we only have 5% more land available to accomplish this feat. If we are to avoid food and ecological crises, sustainability is our only solution.
Governments and organizations over the last decade have shown increasing interest in insects as a sustainable solution to these problems. And Ÿnsect’s high-tech, eco-friendly farming methods and high-quality products have shown that this solution really has legs.
Today, while our third vertical farm is still under construction, our order book is already filled for the next four years and amounts to 145 million USD.
Antoine Hubert, Co-Founder and CEO of Ÿnsect
With the market’s appetite for insects 'worming-up’, a future where our plates are filled with insects is not too far off. So we sat down with Antoine Hubert, CEO of Ÿnsect, to talk more about his business and the future of edible insects.
How did Ÿnsect start out and how did you start selling your products?
In 2011, I and my three co-founders were discussing a problem: How can we increase the production of nutritious food, in a way that reduces GHG emissions, all the while preserving earth’s biodiversity?
Their solution was insects. Mealworm, to be precise. Composed of 72% high-quality protein and bursting with nutrients that are essential for human, animal, and plant health, they are a viable, if not a superior alternative to livestock protein. They also require 100 times less land to produce two pounds of protein compared to livestock. Not to mention, they produce considerably less greenhouse gas and require 25% less water. Talk about nutritious, sustainable and eco-friendly.
At first, Ÿnsect began producing proteins for animals. Insect production is reported to have a much lower carbon footprint than conventional soy and fishmeal-based feeds.
When we started working, we made the decision to work on a B2B level and therefore to go to companies that would then use our ingredients in their recipes. We started working with customers targeting the farmed fish and pet food markets, as well as plants.
Last week we saw a similar strategy applied by Japan’s leading insect-based startup FUTURENAUT, who also found success through collaboration with well-established domestic producers to bring their products to a broader market of consumers.
What are Ÿnsect’s plans to expand into the market for food for humans?
Recently Ÿnsect has also expanded into the market for human foods. In 2021 they acquired Dutch edible insect protein manufacturer, Protifarm, to scale into products for human consumption. Their strategy is to begin with sports nutrition products.
To address the human food market, Ÿnsect intends to rely on its two pillars: performance and health, and to address a health-conscious clientele, as well as athletes. We have received a positive response from 60% of athletes in Eastern Europe who would be willing to integrate insects into their daily diet. First, we must educate the population in order for them to eat foods that incorporate insects, but with time, and in view of the food crisis that is coming, insects can bring both an answer and a considerable contribution in proteins.
We’ve hinted at the early potential in the sports nutrition market for edible insects already. Many companies in Europe and the US are already using insects as a base for protein products. Isaac Nutrition, who we introduced in our second insect-product post, already uses Ÿnsect’s ‘Adalba Pro’ in their products. The booming market is receptive to high-performance ingredients, and research shows insects have several advantages for sports nutrition. They have even been linked to the superior performance of Thai weightlifters at the Rio Olympics in 2016.
We believe there is unrealized potential in Japan for this application also. Fuji Keizai estimates the market for protein supplements will reach almost 200 billion Japanese Yen (1.7 billion $USD) by 2030. The market has almost tripled in size over the last 10 years.
Moreover, changes to lifestyles brought about by the coronavirus pandemic have created demand amongst Japanese consumers for protein products according to Meiji, whose protein brand, Savas, accounts for over 50% of the market in Japan.
MUJI’s recent release of a cricket-based chocolate bar, which they advertises as a protein bar, may be a sign that the sports nutrition industry in Japan is warming up to insect protein.
You mentioned education is key to motivating consumers to try insect-based products. What else is key to overcoming the so-called ‘ick-factor’ amongst consumers?
Although insects are part of the daily diet of almost 2.5 billion people on earth, they have disappeared from our Western habits. They inspire the fear of the unknown….but a few decades ago, eating raw fish seemed unthinkable. Today, sushi is the most consumed food in the world. So why not insects?! Everything starts with the education of the population, but people are not yet ready to consume insects in their whole form, so processed ingredients are the first step!
How does Ÿnsect’s Vertical Farming model contribute to their success?
Our vertical farm model is one of our major innovations: it allows us to limit our impact on the ground by standing vertically rather than horizontally. Amiens is a good example, as it will be fully automated and will use advanced technologies such as artificial intelligence. Eventually, it will collect 1 billion pieces of data per day.
Ÿnsect’s existing farms house mealworms in conditions that mimic their natural environment. Larvae are stored vertically, however, in stacks up to 17 meters high. This farming method uses 98% less land and 50% fewer resources than conventional livestock farming.
Once matured, 95% of insects are steamed, sterilized and processed into powders and oils, free from added chemicals. The remaining 5% become adults and reproduce to renew the supply of mealworm larvae. Currently, Ÿnsect is capable of producing over 2300,000 tonnes of insect product per year.
In addition to their farms, Ÿnsect’s entire supply chain is also built to be sustainable.
To feed our insects, we work hand in hand with local farmers. They provide us with co-products, i.e. products that cannot be consumed by humans, to upcycle them into our recipe. The co-products (field-crop such as wheat-bran) are easy to obtain, especially thanks to our locations in farming areas.
The availability of farms to provide suitable feed for up-cycling is a key consideration for where Ÿnsect builds future farms.
Does Ÿnsect have plans to expand its business outside of Europe any time soon?
In ten years, we aim to have around ten vertical farms across the globe.
Antoine also tells us that Ÿnsect’s ambitions are not without their challenges. In addition to the availability of local farms to supply feed for the mealworm, regulation is a big consideration.
The first barrier to the group's international expansion is the legislative barrier: it is imperative to be aware of the different regulations regarding insect breeding and consumption in order to address the different markets.
As we discussed in our second post, regulations surrounding edible insects have not yet been established in most parts of the world. Europe has made the most progress, already approving several insects such as mealworms for use in human and animal foods. For Ÿnsect, being bookworms and carefully studying relevant local laws and policies is essential for expansion into new markets.
We need to study the legislation in force with regard to insects and the industry, the presence of local farmers to supply the co-products essential to the nutrition of our insects, as well as multiple parameters before launching ourselves on a new territory.
Is Asia in your sights?
We have already begun our relations with Asia, notably by signing with Lotte, an R&D centre in South Korea. This signature is the first step towards our penetration of the Asian market.
Antoine emphasised again that further expansion in Asia is not possible without first getting a lay of the regulatory land. This is two-way process, however, and the more countries can do to address and clarify regulations for edible insect products, the easier it will become for innovators in the space to grow.
Japan has taken steps towards this recently. This year, the Asahi Shimbun reported that the Council for Public-Private Partnership in Food Technology, a work group created by the farming ministry in 2020, is working on hashing out regulations for the insect-farming industry.
Prior to this, the Japanese government initiated a task force in 2020 to support food tech in Japan. Edible insects are featured amongst the technologies they seek to promote.
At the end of 2021, JETRO held a contest for international startups interested in collaboration with Japan, and Ÿnsect was selected as a winner. Ÿnsect will receive mentoring from JETRO to support collaboration and open innovation with Japanese companies.
Ÿnsect welcomes more players
Ÿnsect is not the only player in the insect protein space, of course. As more and more startups and companies explore the exciting possibilities and potential of edible insects, we asked Anotine if he has any messages for future competitors.
I would say go for it. We need all possible players to meet the global demand for protein and help preserve our resources and biodiversity. Insect breeding is still not very widespread. There is still a lot to discover about their benefits and properties.
That’s all, folks!
We hope you enjoyed this fantastic interview with Ÿnsect as much as we did! A big thanks to the team at Ÿnsect for participating and sharing insights with us and our readers.
Join us again next week for our final post on edible insects, which features a special interview focussing on insect-based products sold via different retail channels in Japan.
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