5 Questions an Investor Should Ask Before Investing into an Insect Farm

Investing into the growing industry of high-scale insect farming that has undoubtedly high potential is a case of high risk / high reward. The high reward comes from the growing and unexploited markets and the high risk from the limited knowledge and the undeveloped market environment. Here in this blog I list some of the most important questions that investor should ask and that the farmer must have clear answers that are supported with solid arguments.

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In my perspective the one of the most important qualities for a high-scale insect farm is its flexibility. Because of all the uncertainty surrounding the industry the most important question is how the farm can adopt to changing legislation, trends and new scientific knowledge. All these factors increase the risk exposure of the insect farming companies. This main question is cut in to more detailed questions here below. The questions and the reasoning behind them are explained with higher detail in my thesis that can be found here: https://ilkkataponen.com/2015/05/20/thesis-supply-chain-risk-management-in-entomology-farms/

ilkka-heinäsirkka

1. What species are you farming?
2. How many species are you farming?
3. What type of feed are you using?

The question number one is very fundamental question and sets direction for the farming company. As concluded in my thesis the biggest risk threatening the companies is a pathogen break out. The risks are especially associated with insect farming because the pathogens are still very poorly known. For this reason insect farms should choose their species to be one of the ones that are best known, or they should have extraordinary knowledge or resources related to the scientific research with the selected species. In my thesis I name the three most common species farmed today. The species are Tenebrio molitor, Hermetia illucens and Acheta domesticus. If a farm has selected species that are not one of this three the species should at least be present in the “Belgium ten”, a list of ten approved species by the Belgium authorities  ( You can find the list here: http://www.afsca.be/foodstuffs/insects/).

Changing the insect species is not easy after building the infrastructure around the certain needs and choosing only one species is a risk for multiple reasons. The farm should be prepared for changing the primary species in order to avoid the following risks:

-It is possible that the selected species might not be in list of insects that are first allowed for use for human food and animal feed.

-If the species will not be one of most common ones to be used in the future the company will be left out from the growing knowledge of the most common species and from the growing logistics downstream.

-There is no knowledge of how any insect species will perform in very high volumes. It is possible that even the most promising species will turn up to be unsuitable for high-scale farming.

Same goes with the selected feed. Even if the selected species would be approved by legislation and the species would perform well in high-scale environment, it might be that the selected type of feed makes the end product remain banned. This type of situation might be ahead for example for the companies using biological waste.

4. Do you consider biological research important?
Companies are going to two different ways when it comes to biology research about the farmed species. Few bigger companies have multiple scientists with their teams working on building a better understanding on pathogens and what are the best and most efficient ways of farming. In the other end there are companies with no biological knowledge. It is essential to know the reasons behind the company’s selection between these two approaches. Is it so that the research is just waste of money, or so that the research will bring better quality, risk management and higher efficiency?

5. How have you prepared against pathogen breakouts?
There are multiple risks in insect farming, but the most dangerous one is a pathogen breakout. As mentioned before the knowledge about the insect pathogens is really basic and they pose risks that can in the worst case kill off entire colonies. According to Doctor Jorgen Eilenberg of University of Copenhagen, leading insect pathogens expect in the world, companies cannot with current knowledge prevent pathogens breakouts completely. It is undeniable scientific fact that the sufficient risk control against pathogen can only be reached by risk pooling and segregation of different functions.

If the farm uses same batch of feed for all of its insects, they are all located in a same space or if they use same AC- machinery the investor should be alarmed and ask how the farm can justify the ignorance towards the risk?
pirkko

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The Strange Case of Pestaurant  

Rentokil, A global company of pest control, is arranging for the second time a set of events called the ”pestaurant”. The Pestaurant is a pop-up street kitchen offering insect food around the world. According to their website on the 3rd of June there will pestaurants open in 13 different countries.  The events raises multiple questions that I will be now discussing here in this blog.

Why Rentokil is arranging Pestaurant events?

Why Rentokil, a pest control company ,is involved in food industry? Their business is about killing the pests with e.g poison, but now they are associating their name with food. This is according my knowledge against the very basic brand building and marketing rules to do such a thing. Will people to come to them asking for insect based food later? Will people think that insect have been collected from some industry building where they were first killed with poison?

In the Australian pestaurant-event page an explanation is given:

“The aim of Rentokil’s Pestaurant is to raise your awareness of common pest problems and demonstrate our commitment to professional pest control and innovation, helping us to stay one step ahead of the natural evolution of pests.

Our team of experts are available to offer valuable advice and top tips on how to avoid a pest infestation in your home or at work. Contact us today to arrange a FREE survey.

This event motivates you to be more adventurous with your food and aims to promote the health benefits of an insect rich diet already enjoyed by billions across the globe. Encouraged and promoted by the UN as a viable food source, eating insects (entomophagy) can enrich your diet with higher levels of protein, zinc and calcium – not to mention their low-in-fat status.”

With such an event Rentokil does indeed increase their brand knowledge among the people, but how does offering insect food increase their credibility as effective pest control company?

Why is the event called Pestaurant?

A quick look to Wikipedia gives you a description of the word “Pest” as following: “A pest is a plant or animal detrimental to humans or human concerns (as agriculture or livestock production)”. Calling the event Pestaurant confuses the consumer even more. How come Rentokil is offering us pests, things that are detrimental to us?

Are the insects they are offering even pests?

The different events offer different foods. The lists include mealworms, crickets, locusts, ants, buffalo worms, water beetles and scorpions. From the list few are clear pests, but water beetles at least do not fit the description.

The biggest question: Ignoring the legislation.

From the 13 countries involved Estonia, Lithuania, Ireland, UK and Germany are EU member states. From these countries only UK has taken an official stand against the EU regulations banning insect bases products from human consumption. It is known that the food and health authorities have allowed some insect food events in the countries, but certainly Rentokil is in the gray area here.

What surprised me the most is a piece of text in the German event page “The insects were not self-bagged, but especially farmed for the human consumption according to European food standard.”

The claim that the insect were farmed according to “European food standard” is very misleading as there is no such thing. The food standard they are referring to is possibly the guidelines given by Belgium food safety authorities, but certainly there no such thing as “European food standard” for insect products. From the countries outside of EU I do not know the legislation.

Link to Pestaurant’s homepage. From this link you find further links to the events of different countries:

http://www.pestaurant.com/

Thesis: Supply Chain Risk Management in Entomology Farms

My thesis “Supply Chain Risk Management in Entomology Farms Case: High scale production of human food and animal feed” was published in May 2015. The link for the downloadable PDF- file is in the end of the text. The thesis is world’s first scientific study connecting business management and high-scale insect farming for human food and animal feed.  
pirkkoClick here for the downloadable file: Ilkka Taponen Thesis

My presentation about the thesis can be found here

Audiobook version of the thesis is available for purchase in all major stores e.g here

Which insect species to farm for human food?

Welcome to my third blog post! So far I have got almost 300 different visitors to my site, thank you all for reading and spreading the word. To celebrate this milestone I have got myself a logo and name for the blog. Special thanks for logo for my friend Lasse Ursin, who also provides the cool graphics of this blog post.

Since starting the blog I have completed my internship at Ynsect in France and returned to my native Finland. I have some interesting insect-related projects coming up, but nothing official yet. My thesis work is also moving forward, I think I’m about in the half way now. The title keeps on changing, at the moment it is Risk Management in the Supply Chains of Human food and Animal feed Entomology Farms. One interesting topic I came across with when doing research on insect farming is the reasoning why certain insect are more suitable for farming than others. Here is what I found out.

Which insect species to farm for human food?

There are over six million insect species in the world and over 1000 are used as a food source for humans. There is so much to choose from, so how to find the best options? There are many ways to approach the question, but for this blog I have chosen to take the businessman view and see which species can be farmed effectively and in large scale.

First of all the chosen insect must be phytophagous, meaning that they feed on plant-based food. Entomophagous insects, meaning that they are feeding on other insects, are very hard to farm and make a profit in the same time. This is because even though there have been many attempts, entomophagous insects have not been successfully farmed on factitious prey meaning that to farm them, also the prey insect must be farmed. This leads to a situation where two insects are farmed, but only one can be sold.

lehtikirvapirkko

The second step in the cutting out the options is answering a set of questions. Some of these questions are given in the book Mass Rearing of Beneficial Organisms.

Body size: The insect should have reasonably large body size because the insects that are sold for human food or animal feed are sold in weight (sometimes entomophagous insects that are reared for pest control are sold in numbers). The larger the size the easier they are to control during the rearing process.

Easy to culture: This is something quite obvious, but what makes a species easy to culture? The main reasons making culturing easy are: Available studies on the insect, availability of the insect itself, simple living environment, simple eating habits and low level of manual work on the upkeep of the farms living conditions.

High rate of reproduction: This is one of most important questions and related to the body size point. There is no use of having a species that are large in size if they are very slow breeders. High rate of reproduction gives also security against unexpected rise in mortality rates as the population can regain the required level fast. Also answering to rising market demand is easier.

Not significantly cannibalistic and high tolerance for diseases: Even though the insects must be given an environment that resembles their natural environment, they most likely will be living in more dense populations than in nature. Some insects will react to high density populations by starting to eat each other. This will cause losses to the farmer and fights against the animal welfare (see blog no 1). The dense populations increases also the risk of diseases and for this reason high tolerance is necessary.

Feed conversion ratio and feed: The feed conversion ratio tells how much of feed is needed to gain certain amount of biomass. The lower the ratio is the less feed needs to bought and stored. Unlike the farmed mammals, insects are poikilothermic that means that they are able to use most of their energy for growing, not for heating the body. This gives insects better FCR than cows and pork for example. There are variations between the insects as well, but the FCR of a certain insect depends on what the feed actually is. If the food has high nutrient values, a small amount is enough.

This brings us the last point of possibility to feed on organic waste streams. If the species can be fed on organic waste the cost of production will be reduced, but it brings up multiple questions. Is the waste high and consistent in nutrient values and is it risk free? If the consistency is not guaranteed, the already difficult production planning becomes more complicated because the consumption of feed cannot be forecasted. Already today a lot of waste streams are used in beneficial way, for example for the production of biofuel. How nutritious the waste that is available for free or very cheap actually is when major part of the “good” waste is already used somewhere else? There are few companies doing production on waste streams, would be interesting to hear what they have to say about this!

Few insects that fit the given criteria are house fly, coldling moth, silkworm, mealworm, black soldier fly and house cricket.

Insects and sustainability are not crap.

In my first blog, “Animal welfare in insect farms”, I discussed why insect farming is more sustainable than livestock farming. On 17th of January 2015 an article “Are those edible bugs actually sustainable?” was released on MacLean’s website. In the article, Ben Reade is questioning the sustainability of insect farming, but he is doing it by making statements with no real arguments and cutting corners. The first quote from him in the article is: “Everyone has been making a lot of hype about insects and sustainability and most of that hype is crap.”  Admittedly, the tone of this article is most likely deliberately provocative, maybe to make people like me write about the same subject!  Later on, a chef called Nathan Isberg is also interviewed, but first let’s start by breaking down some of the misconceptions from the article given by Mr Reade:

..“No one spoke about the fact that, in order to ship those insects around the world, they were mostly being bred in Holland and had to be kept at 28° C—and that’s energy-intensive,” says Reade. “And then they were to be freeze-dried, which is just about the most energy-intensive form of preservation on the planet.”

  1. Obviously, when the demand for insect products grows, the insect will be industrially farmed all around the world, not only in Holland where the industry at the moment is booming the most. When looking at the production and logistics of insects, it is relevant to compare it to the substitute. For example, what is the difference in the sustainability of logistics of freeze-dried crickets going from Holland to Brazil compared to Brazilian beef and soya beans coming to Europe? The logistics have very little impact on the total environmental footprint of food; over 90 % comes from the manufacturing.
  1. There are three popular insects farmed at industrial level at the moment. From the three, only the house cricket is associated with high energy consumption related to the heating of its environment. The other two, namely the black soldier fly and mealworm, are farmed in large crowds and as such are heating their environment themselves.
  1. Freeze-drying is associated only with the house cricket, and only if the insects are shipped to customers without processing as a whole. There are already products like protein bars, as mentioned in the article, that are made out of insect flour. The flour is shipped dry and at room temperature. The freeze-drying will not be the most common form of insect product handling. Again, compared to livestock products, the majority of meat products must be moved and stored in cool temperature.

Nathan Isberg, a chef, is also interviewed in the article. He says, among other things:

“Insects are less and less a realistic response to our current agriculture. Reducing protein consumption would be a better answer”

This is a true statement, but the problem here is that the demand of protein is expected to grow, not reduce. The growth is driven by the growing middle class of big countries like China and India. From my perspective there is very little that can be done to change people’s desire for proteins, so the answer is not to hope for and promote less protein consumption, but to provide a new protein source; the insects.

“These crickets you get from farms—they taste like fish because they’re being fed fish food. So you get a cricket, you feed it fish, and you feed the cricket to the fish and you get a fish. That’s the reality.”

Well no, that is not the reality. First of all, crickets are not fed to fish. If a fish farm is using some insects for feed it is the larvae of black soldier fly, not the cricket.  Feeding fish based products to crickets is expensive and cannot be done on a large scale and expected to be profitable. There are multiple better ways of feeding crickets than with fish meal.

Ps. If Mr Isberg’s last comment is really true and there is an insect farm feeding crickets fish meal and a fish farm feeding crickets to fish, please, farmers – do yourselves a favour and contact me! I can give somefree tips to save you a lot of time and money. Or maybe just read a book, like Mass Production of Beneficial Organisms.

Links to the article  “Are those edible bugs actually sustainable?”:

http://www.macleans.ca/society/life/factory-farmed-insect-how-vulgar/

Animal Welfare in Insect Farming

Large-scale industrial insect farming is a relatively new industry and is expected to grow significantly in the coming years. There are a few industrial size insect farms starting around the world that are rearing insects, mainly for fish feed, but some products are also popping up little by little for human consumption as well. The human consumption of insects is called entomophagy, not to be confused with entomology, the branch of zoology concerned with the study of insects. There are over 1000 different insects species used today as food, but the most common insects being farmed on an industrial scale are the mealworm (Tenebrio molitor), black soldier fly (Hermetia illucens) and house cricket (Acheta domesticus). Insects are seen as a sustainable substitute, especially for the consumption of livestock. The traditional protein source livestock is not only expensive, but also environmentally unsustainable – compared to an insect or vegetarian diet, meat production is ineffective and uses staggering amounts of water, land and feed. For example, a cow consumes 12 times more resources than crickets that give the comparable nutrition as meat.

To read more about the topic, have a look at FAO’s Edible Insect document available here: http://www.fao.org/docrep/018/i3253e/i3253e00.htm

Along with the environmental issues, another ethical concern associated with meat consumption is the main topic of this blog: animal welfare. The basis of animal welfare legislation is the so-called Brambell’s five freedoms model.

The five freedoms are:

  1. Freedom from hunger and thirst
  2. Freedom from discomfort
  3. Freedom from pain, injury and disease.
  4. Freedom to express normal behavior.
  5. Freedom from fear and distress.

The basic cause for ethical problems in traditional animal farming is that it is economically beneficial to keep the animals in environments that are not natural for them. For example the unnatural, stressful environment and unnatural density of animals can lead to health issues, but economically it’s cheaper to deal with it by extensive medication than by providing more space.

As it stands today, when high-scale insect farms are emerging, it is economically beneficial for insect farms to respect the five freedoms. According to multiple industrial scale farmers interviewed in the research document “A Bug’s Life. Large-scale insect rearing in relation to animal welfare”, the more the industrial environment resembles the natural environment of the insect, the more productive and healthy the insect will be. There are a few exceptions, however. Some farmers use juvenile hormone to prevent the larvae of Tenebrio molitor from moulting into pupae and later into beetles. Another example is gender ratio manipulation. In order to maximize the breeding activities of the adult insect, the natural ratio of male and female insects is modified. These are two instances where the animals’ right to express their normal behaviour is interfered with. To read more about this topic, you can find the full “A Bug’s Life”-document is available here: http://venik.nl/site/wp-content/uploads/2013/06/Rapport-Large-scale-insect-rearing-in-relation-to-animal-welfare.pdf

Hypocritical approach on animal rights.

People tend to be hypocritical about animal rights. For example, domestic animals are loved by their owners and a lot of time and effort is put into their wellbeing, because they are considered ‘cute’ and can show affection. Animals like rats do not receive the same degree of compassion, let alone cockroaches or spiders. This fact will affect the public’s view on the growing industry significantly. Even if in the future insect farms would not be able to provide an ethical environment for the insects, the public would not be as concerned with defending, for example, fly larvae in the same way that it is increasingly doing with livestock. Insect farming hasn’t yet reached a scale comparable to livestock farming at this point. It remains to be seen if farms will be able to provide the animals with the five freedoms and how the public will perceive the industry when it grows bigger.

For the last point some food for thought.

The big moral question that the consumer is facing when it comes to entomophagy is: is it morally correct to eat insects and other animals? And if not, can the immorality of eating insects be overlooked for the sake of the greater good?

If carefully controlled, insects can be fed with biological waste streams. This would make insect products clearly the most environmentally sustainable protein source, not only over livestock and fish but also over soya beans. If the carbon footprint of the end product does not count in the production of the insects’ feed (as it is otherwise considered waste), the only environmental impact comes from electricity usage on the farm, packing and transportation. When looking at the issues associated with soya bean farming, not even a full vegan diet gets away with a clear environmental conscience. For this reason, even a consumer who is conscious of the animal rights of insects must consider entomophagy over vegetable based proteins for an even lower environmental impact.

My blog is clearly pro-entomophagy, but an opposite view exists as well. Here is a link to a blog where the author speaks against insect farming for ethical reasons: http://reducing-suffering.org/why-i-dont-support-eating-insects/. The author makes some relevant and respectable points from his ethical point of view, but is guilty of fallacy when referring to “A Bug’s Life” and high mortality rates. Specifically, when the author writes “…in practice, farms don’t want to spend too much effort on maintenance or optimal welfare”, this conclusion has already been overruled by researchers of the “A Bug’s Life” document. According to their knowledge and the multiple farmers they interviewed, it is essential for the success of the farm to put a lot of effort into the maintenance and optimization of the insects’ welfare.

I hope you found my first ever blog interesting to read! As you may have noticed I’ve left out multiple references to make the text easier to read, also for people who are not interested in the topic for purely professional or research reasons. In case you would like to know more, leave a comment. I’ll do my best to answer all the questions!

In Paris 4th January 2015. Ilkka Taponen

Updated 2017- version can be found from my Medium-site: https://medium.com/@itaponen/animal-welfare-in-insect-farming-213a7224ef3d#.n6v9yewbt

Further reading:

For general information on insect farming: FAO’s Edible insects: http://www.fao.org/docrep/018/i3253e/i3253e00.htm

Study on animal welfare in industrial farming: “A Bug’s Life. Large-scale insect rearing in relation to animal welfare”

http://venik.nl/site/wp-content/uploads/2013/06/Rapport-Large-scale-insect-rearing-in-relation-to-animal-welfare.pdf

About the environmental impacts when using insects of a part of fish feed: Life Cycle Assessment on Icelandic Arctic char fed with three different feed types:

http://skemman.is/stream/get/1946/15119/36564/1/Birgir_%C3%96rn_Sm%C3%A1rason.pdf