But can the ‘yuck factor’ be overcome to vault insect farming out of the land of the niche?
By Mary Baxter
For Jarrod Goldin, a report about edible insects four years ago had the perspective-altering impact equivalent to Neil Armstrong first setting foot on the moon.
A 2013 Food and Agriculture Organization of the United Nations document suggested eating bugs — crickets, mealworms and black soldier fly larvae — could fill the world’s growing number of rumbling bellies without taxing an already strained environment.
Yet it would take an episode of the popular U.S. reality television show Shark Tank for Goldin, a chiropractor in Richmond Hill, Ont., to realize how well-positioned he was to take on the task of bringing insects to market.
During the episode that aired around the same time he read the UN report, a contestant who made cricket protein bars scored backing from one of the show’s celebrity investors.
It was Goldin’s “aha” moment. His brothers already grew bugs for their national reptile feed business, so he called them with a proposal: “Why don’t we raise some money and start North America’s first human-grade insect farm?”
Not so long ago, insect farming occupied the land of the quirky and perhaps even the shady, given the $1-billion Ponzi scheme by China’s Yilishen Tianxi Group that bilked more than one million investors over an eight-year period until its collapse in 2007. The group promised farmers a 30-per-cent return on the ants they grew, supposedly to make a powdered ant cure-all.
Now, ventures in Canada, the United States, Europe, South Africa, China and Malaysia are vying to produce the large, sustained volume needed to generate real profits from selling insects as food for livestock, farmed fish and people.
There is lots and lots of interest and a lot of people investing millions if not billions of dollars in these efforts
“There’s lots and lots of interest and a lot of people investing millions if not billions of dollars in these efforts,” said Dominique Bureau, a University of Guelph professor who specializes in fish nutrition.
One such venture is run by the Goldin brothers, who in 2014 established Next Millennium Farms and started growing crickets in a 5,000-square-feet warehouse in Campbellford, Ont. That facility soon proved to be too small so they moved to their current location — three former chicken barns, each 20,000 square feet, in Norwood, Ont., near Peterborough — and changed the business’ name to Entomo Farms.
Insect farming’s appeal hinges on its promise to solve a number of ecological conundrums, such as returning billions of dollars worth of wasted food back into the food chain by having insects eat it and then become a food source.
Researchers also see insect protein as a partial feed alternative for farmed fish since the wild fish stocks that make up fish meal are rapidly dwindling.
That insects use far less water (and space) than cows and are efficient at converting their feed into weight gain are yet more reasons why both environmentalists and entrepreneurs looking for healthy profit margins gaze favourably on insect farming. A 2017 Research and Markets report estimates the new sector will earn more than US$1.07 billion in revenues by 2022.
The promise is there, but progress is slow. For instance, Langley, B.C.-based Enterra Feed Corp., incorporated in 2007, only recently got the necessary Canadian approvals to sell black soldier fly larvae as a feed ingredient for farmed fish and broiler chickens. (U.S. approvals to sell the larvae as a feed ingredient came last year)
“We spent the first couple of years evaluating different insect species, how to grow them and that kind of thing; we spent some time in research and development and we opened a demonstration plant in 2012,” said Victoria Leung, manager of marketing and operations at Enterra, which opened a commercial facility in 2014.
The company values its intellectual property to be within the $50-to-$60-million range, said Keith Driver, executive vice-president. “Luckily, we’ve got there spending not quite half of that.”
Enterra maintains nearly one billion flies or larvae in its Langley facility at any given time, though it won’t divulge how much product comes out of it.
“Right now though, I would say we’re producing commercial levels of product at this stage and we’re looking to move to hundreds of tonnes a month at our next facility,” Driver said.
Feeding the insects was one of Enterra’s bigger challenges. Fly larvae may thrive on organic waste, but contaminants such as dioxins and heavy metals can hitch a ride on some forms of waste accumulate in insect systems and pose the risk of moving further down the food chain.
The company has introduced rigorous screening protocols for its feedstock and also shifted towards a higher-quality feedstock to establish consistency in both production and the end product.
Along with obtaining organic waste from places such as grocery stores, Enterra sources feedstock such as distillers’ grains and grain processing residues from agriculture and food processors.
The company started the paperwork to obtain approval to sell insects as feed for fish and livestock for its Langley plant five years ago — well before the plant was built.
According to a Canadian Food Inspection Agency (CFIA) spokesman, companies have to demonstrate several things to get approved: they must identify any hazards in the production system and mitigate them, prove the feed produced provides a purpose, and, finally, show that animals fed the product perform as well as on a traditional diet.
Now that Enterra has trial information in hand, quality screening systems in place and secured appropriate food sources, approvals for future plants in Canada — two of which are under development — should not take as long.
Similar regulatory approval is not needed for formulating pet food made with insects.
“We don’t regulate pet food in that way in Canada,” said David Johnson, CFIA chief of risk profiling.
At the Goldins’ Entomo Farms where they grow crickets and mealworms for people and pets to eat, obtaining government permissions to sell crickets for human consumption was far more straightforward.
That’s because federal food safety legislation already allows for the presence of insects in food as a by-product of food processing and the family was already feeding their critters a grain mixture similar to chicken feed.
Midgard Insect Farm Inc. in Annapolis Valley, N.S., also sells bugs for pet food makers including Dane Creek Capital Corp., which took a 48-per-cent stake in the company in 2016.
Mississauga, Ont.-based Dane Creek makes Dockside brand sustainable pet foods at its Nova Scotia facility, giving Midgard a secure market while it scales up.
Hillier’s operation includes two facilities — the original one in Windsor and a new one in Truro — and it is also developing its own line of branded treats.
“We’re not releasing production numbers right now,” she said, but she expects employee numbers to double to 14 within 18 months.
Goldin said Entomo currently has the capacity to generate roughly 13.5 tonnes of raw insects a month, although it’s not yet producing at maximum capacity.
The amount is roughly equivalent to 30,000 113-gram bags of powdered crickets, which the company sells for $12.38 on its website.
Entomo is nearing break even, Goldin said, but the focus is on growth. It is in the process of obtaining two more former barns and talking to venture-capital firms and strategic investors such as food companies about financing the scale up.
“We are looking at modelling out, operating everywhere from the West Coast of Canada to certain parts of the United States, Mexico, Costa Rica, Dominican Republic,” Goldin said. “We want to be the biggest insect farm company in the world.”
But being the biggest is not a guarantee of success. Insect proteins face stiff competition in the aquaculture feed market from other forms of alternate protein sources under development, such as protein isolates and microbial biomass. And many claims about the nutritional benefits need further research.
“It’s an okay (feed) ingredient, however, to me it’s nothing really to write home about,” said Guelph professor Bureau.
Brad Hicks, a partner at Taplow Ventures, which manufactures pet food and aquaculture feed, said insect protein is currently a “craft novelty product,” but it holds promise as a commodity.
It is an okay (feed) ingredient, however, to me it is nothing really to write home about
Earlier this year, Taplow Ventures began marketing a pet food product that uses insect ingredients from Enterra. Company officials had worried the ingredient would be a consumer turnoff, but found it didn’t affect sales.
The company also includes insects as an ingredient in specialty feeds it makes for fish and chickens. The feed is currently too expensive for large-scale chicken operations, but backyard chicken producers are willing to pay extra for it, Hicks said.
Economists such as John Cranfield, chair of the University of Guelph department of Food, Agriculture and Resource Economics, and Sylvain Charlebois, dean of Dalhousie University Rowe School of Business, say the yuck factor of insect protein will probably relegate it to niche markets for a long while yet.
Charlebois predicts wide-scale acceptance would come first in places such as Europe, where the shift to vegetarian diets is well underway, and the Far East, where some cultures already include insects in their diet.
Nevertheless, Goldin maintains consumer acceptance in Canada will come sooner rather than later.
Recently, Entomo negotiated a deal to launch a product under the President’s Choice brand that will be shipped to 300 Loblaw stores. The startup food processors they began selling cricket meal to three years ago are thriving. And this year, after restaurants across Ontario added crickets to their menus for Earth Day, some never took them off.
“We have just growing demand from multiple sectors,” Goldin said.
Original article available here.