I published my Entomology Company Database in this website about one week ago. I already got a lot of positive feedback and also people informed me of missing companies and mistakes, thank you for that! I will keep on updating the database from now on, if you spot a line that needs updating, let me know!
There are many ways to look at the data and I believe it can be used to serve multiple purposes, but what I will do here is to paint a picture of the insect species that are reared by the industry and what can we conclude from the findings.
Database analysis; The Chosen Species
To get started I first filtered out all companies that are not active. Then I selected companies that are involved in farming. Also, I filtered out companies whose species are unknown. This leaves us 69 companies (Note! I am using the database file version 08, uploaded on 14th of January).
Point 1. Most companies focus only on one species
First thing we can learn from this is that vast majority of companies, 43 out of 69, are focused only on one species. Putting the company’s focus to only one species brings many positives effects: R&D resources are better used, hardware investments and inventory carrying costs are lower. Also, benefits of economies of scale can be reached easier. There are negative sides as well; Focusing only on one species means higher environmental and supply risks. What if the chosen species are not among the most popular species when the industry grows? Or even worse, what if the species are not in the list of approved species when the legislation is going through big changes?
More on this you can read from my blog 5 Questions an Investor Should Ask Before Investing into a Insect Farm. https://ilkkataponen.com/2015/06/20/5-questions-an-investor-should-ask-before-investing-to-a-insect-farm/
Four companies have chosen the path of two species that might be a way to control the risks, but in the same time keep the costs low. The companies are Ynsect, Ofbug, Big Cricket Farms and Micronutris.
When looking at the “Multiple species” companies 12 of out 23 are companies that mainly focus on biocontrol or pet food manufacturing. When working on these segments of insect farming the higher production costs and loss of the benefits of economies of scale is justifiable as the companies get better price for their product. This is because their selling unit is rather pieces than kilos. They operate in the a high-end segment, while when producing for food or feed the companies are competing e.g with soy bean that is extremely cheap.
Point 2. The most popular species
Looking at the most popular species is not easy as many companies talk only about “crickets” instead of the actual species of crickets. All the cricket companies make total number of 19. The black soldier fly (Hermetia illucens) farming companies are 21. Maybe surprisingly only seven companies are involved mainly with mealworm or lesser mealworm. Of course some of the “Multiple species” companies are rearing these as well.
Point 3. The lone wolves
Two companies stand out with the selected species: Steak Traz Traz are the only one to choose Grasshoppers so far and Fly Farm Systems only one with Musca Domestica. Being the only raises few issues and increases supply risks. How come these companies have chosen a different answer than others? Do they know something that majority does not, and are they really the one with the better option? Surely every company is their own individual case and they could justify their chosen species from production and business perspective today, but the in the future the case will be different. One reason is because of the environmental risk explained in Point 1. The biggest risk is not the environmental, but the supply risk that is very significant in the case of the lone wolves. Companies rearing e.g the most popular species black soldier fly will benefit from the wide vertical integration that they build together with other similar companies. This will not only bring security against the supply risk of the company but benefits in increased sales as the demand risk is reduced for the downstream of the logistic chain.
More on the supply risk briefly from my presentation here: https://ilkkataponen.com/2015/10/29/presentation-in-insect-business-and-research-meeting-in-seinajoki-finland/
Or with detail from my thesis here: https://ilkkataponen.com/2015/05/20/thesis-supply-chain-risk-management-in-entomology-farms/