Starting point

In recent years, insect farming has received a lot of interest and investments. Most traction is generated by the production of insect-based animal feed ingredients, such as insect meal and oil, to replace conventional raw materials like fishmeal, soybean meal and rapeseed oil. As insects can be grown on organic waste, their derived products are seen as promising alternatives. In other words, the “insect story” has all the ingredients for an appealing marketing campaign or investment pitch. However, insect farming comes with many challenges, making is less sustainable and profitable than often claimed. These challenges can be summarised in three categories: 1) sourcing inputs, 2) selling outputs, and 3) scaling production.

Black Soldier fly larvae (Source: International Institute of Tropical Agriculture)

Sourcing inputs

Commercial insect producers present themselves as the ultimate solution to food waste. Instead of sending food waste to landfills, they feed it to insects, and these insects can be fed to farmed fish, chicken, and pigs. This way, food waste can be turned into food again. Circular agricultural at its finest, one could argue. Unfortunately, the picture is not as bright as the insect industry likes to paint it.

Under EU legislation, insects are classed as terrestrial farm animals. As such, they can only be reared on authorised animal feed products. The only waste streams allowed for animal feeding are referred to as ‘pre-consumer agri-food residues of non-animal origin’. These residues have lost their commercial value for human consumption, but still offer valuable nutrients. Examples include by-products from breweries, distilleries, and bakeries, such as leftover grains or cookie crumbles.

When companies say they use food waste as a rearing substrate for their insects, many may think that they collect the food scraps from our kitchens and restaurants, or the expired food from our shop shelves. In reality, insect producers buy truckloads of leftovers from food processing facilities. But either way, this is also food waste, right? Actually, it is not. The materials used by most large-scale insect farms today already have an established market as feed or feed ingredients for traditional farm animals. By-products like leftover grains or cookie remains are not being wasted. In fact, they are fully utilised by animal agriculture and never leave the food chain.

Growing insects on animal feeds to produce animal feed ingredients does not make our food system more circular or sustainable, it rather makes it more inefficient. This also explains why insect-based feed ingredients are so expensive: they simply add another step of feed conversion in animal production systems.

So, what if we start growing insects on true food waste, either by changing EU regulations or farming and selling insects outside the EU? Would this present a sustainable and profitable business case? Sadly, true food waste comes with its own problems: it is geographically dispersed, high in moisture, and at risk of contamination. The geographic dispersion and high moisture content of food waste make it costly to collect and transport. To prevent contamination, food waste would also have to be carefully sorted and treated. Once the food waste is collected, transported and free of any dangerous contaminants, it can be fed to insects.

Unlike by-products from food processing, however, true food waste is unlikely to have a homogenous make-up and nutrient composition. This makes it harder to control the growth performance, survival, and nutritional quality of the reared insects, affecting operational efficiencies and the marketing of final products.

In short, companies need large and accessible volumes of under-utilised, affordable, safe, and homogeneous waste streams to sustainably produce insect products of a consistent quality. If companies can succeed at securing such waste streams as inputs for their business, the next challenge awaits: selling the outputs.

The study identified by-products from the Scottish whisky industry as having the greatest potential (Photo by Jaap Mol on Unsplash)

Selling outputs

Insect-based ingredients can be used in animal feed and pet food. Within the animal feed sector, aquaculture feed presents the most promising market. Over the last few decades, the aquaculture industry has made efforts to reduce its reliance on fishmeal and fish oil from capture fisheries. As a result, a large share of these wild-caught marine ingredients in aquafeeds has been replaced by plant-based alternatives. However, there is a limit to how much marine ingredients can be substituted by plant-based counterparts, as these do not offer the same nutritional value. To further reduce its dependency on capture fisheries, the aquaculture industry is exploring novel alternatives to fishmeal and oil.

Insect meal can be used to replace the protein that fishmeal provides in aquaculture diets. The amino acid profile of some insect meals is comparable to that of fishmeal, making it a suitable candidate from a nutritional point of view. However, insect meal is more expensive, costing around three times as much per metric ton compared to fishmeal. Nevertheless, insect meal is already applied commercially on a small scale as a premium feed ingredient for fish like salmon and trout, to differentiate the final product as ‘sustainable’.

The main sustainability claim for fish farmed on insect-based feed, is that they require less wild-caught fish in their diets. Based on the lower share of marine ingredients in their feed, this may seem the case. However, when replacing fishmeal with insect meal in the diets of carnivorous species like salmon and trout, more fish oil needs to be included. This is because insect meal, unlike fishmeal, does not provide essential Omega-3 fatty acids, particularly EPA and DHA. Meanwhile, it takes more wild fish to produce one tonne of fish oil, compared to one ton of fishmeal. The forage fish dependency of aquaculture diets can thus increase when swapping fishmeal with insect meal. Only when the lacking essential Omega-3 fatty acids are supplied by another source than fish oil, like algal oil, can the forage fish dependency of farmed trout and salmon decrease. However, fish oil alternatives like algal oil currently come at a high premium as well. For herbivorous farmed fish species, like tilapia and pangasius, insect meal could be sufficient to decrease the forage fish dependency of their feed, as these fish have low requirements for essential Omega-3 fatty acids. However, no large market can be expected for premium tilapia and pangasius, as these fish thank their popularity to relatively low prices.

In addition to the above, insect meal is not the only available substitute with a suitable amino acid profile to replace fishmeal in aquafeed. Processed abattoir by-products, also called Processed Animal Proteins (PAPs), are widely available and affordable fishmeal substitutes. Examples of PAPs are meat and bone meal, feather meal, and bloodmeal, which are often priced lower than fishmeal. Compared to insect meal, PAPs are also available in larger volumes and their application in animal feed is much more established, especially outside the EU. In the autumn of 2021, PAPs and insect meal received EU approval for the use in pig and poultry feeds as well. It will be challenging, however, for insect meal producers to compete with PAPs. The circularity narrative behind insect meal also applies to PAPs, and nutritionally, insect meal is not more valuable. The same is true for insect oils, which do not offer any considerable nutritional benefits compared to conventional feed oils, but still demand a significant price premium. Pet food is an exemption here, as (vegetarian) owners may want to feed their pets on meat-free diets, and their willingness to pay is expected to be higher. However, premium pet food remains a niche market.

To increase their revenue streams, insect producers commonly market ‘frass’ as a high-quality fertilizer. Frass consists of the faeces and leftover substrate from insect rearing. However, there is no scientific consensus that frass offers any additional benefits compared to other animal manures, such as pig and cow manure, for which traditional farmers hardly get paid. On the contrary, in European countries, it is not uncommon for farmers to pay for their manure disposal. It is thus a long shot for insect producers to expect substantial income streams from frass sales.

Scaling production

When insect producers have access to suitable substrate materials, and they have secured a strong market for their products, it is left with the farming itself. In contrast to traditional animal farming, insect farming is a new and little-researched industry. There is thus little public knowledge of best practices, and commercial players all treat their production processes as confidential. Whereas farming insects on a pilot scale is successfully achieved by many players, few have managed to build and operate a large-scale operation. One key challenge is separating the insects from their growing substrate when they are ready for harvest. This process can be very labour intensive, and efforts to mechanize the process have proven to be expensive. Furthermore, some insect species, such as the black soldier fly (BSF) larvae, need tropical temperatures to thrive, which comes with high energy requirements for heating.

So when can insect rearing for feed ingredients work?

This question prompted our research. To successfully produce insect-based feed ingredients of a consistent quality at commercial volumes, year-round access is needed to affordable, abundant, homogeneous, and legal biomass streams. Often, such biomass streams are already valorised, but some underutilised materials can still be found. The aim of our study was to identify and assess the feasibility of underutilised biomass streams in Scotland for producing insect-based salmon feed ingredients, specifically defatted meal and oil from BSF larvae.

As part of the study, we performed a literature review on the performance and body composition of BSF larvae reared on different substrates. We focused on substrates that contained one or more materials that can be found in Scotland. Spent grains and spent yeast, two by-products from beer breweries, are among the most productive substrate materials studied in scientific literature (see figure). In commercial settings, these beer by-products are widely used for insect farming as well. However, in Scotland, spent grains and spent yeast are fully utilised by animal farming already. (Note: % denotes the crude protein content of the produced larvae meal as percentage dry matter. DDGS is dried distiller grains with solubles).

We identified whisky by-products as the most promising biomass streams for BSF larvae rearing in Scotland, as large volumes of these nutrient-rich materials are wasted or burned for bioenergy. The physical properties and nutrient compositions of whisky by-products are similar to by-products from beer. Therefore, it is argued that the performance of BSF larvae on whisky by-products is likely to be comparable to the performance observed on beer by-products. Our calculations show that, if this proves to be the case, 8.5 thousand tonnes of larvae meal and 3.8 thousand tonnes of larvae oil may be produced at the largest geographical hotspot of whisky by-products in Scotland. If the obtained larvae meal and oil would then sell for the same prices as fishmeal and rapeseed oil, BSF larvae rearing would add almost 100% more value to the utilised whisky by-products. Co-locating BSF facilities with distilleries could also limit the transportation costs for by-products, and residual heat from the distilling process may be used for insect rearing.

Read the full paper: Wehry et al, 2022, The feasibility of underutilised biomass streams for the production of insect-based feed ingredients: The case for whisky by-products and Scottish farmed salmon.

We would like to express particular thanks to Dr William Clark at Zero Waste Scotland for his help in collating data on suitable Scottish waste streams.