Industry Insights, Interview with Ilkka Taponen

The interview below was done by International Insect Centre and published in their newsletter in May 2017.

After completing an internship at Ynsect involving his thesis paper titled Supply Chain Risk Management in Entomology Farms Case: High scale production of human food and animal feed, Ilkka developed a keen interest in the insect industry, setting up a blog dedicated to developments in this sector. Combined, the success of his blog as well as his activities in market potential projects for insect products has given Ilkka significant insights into the current market for insects, especially in scaling up production in the novel foods sector. He is now employed at Green & Gold Foods based in Finland, developing alternative protein products for the consumer markets.

Speaking about the growing interest in the insect sector, Ilkka explains that since news of new EU regulations has been clarified, interest in this business has greatly increased. “Last summer there was a real lack of contact on the blog, but since November I have received a lot more emails from interested persons, possibly because news of EU regulation [regarding insects in feed and food] has become clearer”, explaining that this could’ve rejuvenated interest in the sector.

However, although growth seems to be positive, Ilkka explains that the role that insects will play in the future is a little more obscure; “It is hard to say; some companies are working on feed whilst others say that there is no sense in this, with food being the main goal. Considering that these are often companies with significant resources behind them, they are approaching this business very differently so it is impossible to say who is right and who is wrong.” Having worked both in the insect protein sector and the plant-based protein sector, Ilkka points out that insects must compete with plant-based alternatives and that this may result in them having more potential for feed applications than food based. “For example, one place in which insects are clearly the best option is in animal feed. However, taking salmon farming as an example, the demand for the quantities that are needed to enter the market are huge, whilst the profit margins are very low. It’s a difficult combination.” Ilkka explains that economies of scale will be needed in order to bring the cost of insect-based feeds down. “Increasing the scale and automating the process is key, but it’s difficult to say how long it will take for the costs of fish raised on insect feed to meet the price of conventional products.”

Another factor that is also involved in the development of the insect sector is risk. According to Ilkka, due to the novelty nature of insects as an ingredient in both feed and food, many companies are reluctant to carry out R&D using them due to the risks that this can entail. This is further amplified by the current lack of insect suppliers; “this makes it very risk intensive for companies to introduce insect ingredients because suppliers end up with all of the [negotiation] power.” Continuing, Ilkka points out that there also needs to be research into the end consumers that would be interested in buying sustainably raised fish fed on insects. “Who is going to buy these products? Generally, the people that would be interested in buying these products will most likely choose a plant-based alternative.” Ilkka explains that therefore, fish fed on insects cannot be sold based on this value added sustainability aspect alone. This suggests that in order to be viable, insect fed fish must become the ‘norm’ and not a speciality product. “The fish farmer has to pay 5% extra [to use insects], as do their clients, having a knock-on effect down the supply chain. The real question is; are consumers willing to pay for this?”

However, with regards to feed production in particular, insects have one major benefit over many non-fishmeal alternatives; they are live animals. This makes them suitable for feeds aimed at carnivorous and omnivorous animals, an advantage that plant-based alternatives cannot compete with, according to Ilkka. “I think that this is the key that will determine the future. This is one of the only places where using animals [for feed] is very advantageous; for feeding other animals. In this situation, insects are most definitely the most sustainable choice.”

Continuing on the subject of sustainability, Ilkka clarifies his thoughts on insect proteins. “We must also take plant-based proteins into consideration, especially when looking into feed conversion rates. As I have said, insects are the best option for animal-protein based feed, but for food purposes, plant based proteins offer the same benefits but in a more culturally acceptable and cheaper way at this moment.” Despite this, Ilkka remains positive that there will be significant growth within the sector for edible insects, however compared to alternatives, it is uncertain whether they will be able to compete long term. As for the animal feed sector, Ilkka expects that insects will play an important role in the market with regards to the future of sustainable animal feed, beginning in the aquaculture sector.

Thank you IIC and Poppy Eyre for putting my thoughts nicely into text! Visit IIC at http://www.insectcentre.com/

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