The future of the insect market: development, technology and economies of scale. #MarketTrend
Updated: May 22
In recent years, insects have attracted significant investment, especially since 2018, enabling insect companies to establish large-scale production facilities, particularly in the fish industry 1.
Capital inflows into the insect sector have accelerated since the European Union authorized the use of insect protein as an ingredient in animal feed in July 2017. Investments in the sector in 2018 were approximately 45% higher than the total investments received in the previous three years, with the disclosed investment in the insect sector reaching approximately EUR 1 billion 2. Notably, Ynsect and InnovaFeed received the largest disclosed investments by the end of 2020, thanks to their innovative business models, strategic partnerships, and rapid expansion in terms of geography and product offerings 2.
Analysts have developed a model to assess the potential market for insect proteins, assuming no legislative or supply constraints. They have identified three phases leading up to 2030: a scale-up phase, a period of wider use, and the maturity phase.
During the scale-up phase, the price of insect protein is expected to fluctuate between EUR 3,500 and EUR 5,500 per tonne. However, a significant price drop of EUR 1,000 per tonne is anticipated after the initial scale-up phase, with an additional EUR 1,000 per tonne reduction projected when the industry reaches maturity 2.
The second growth phase of insect proteins and other insect-derived products will focus on their functional properties. Research indicates that insect protein offers more than just nutritional value. It has positive characteristics such as palatability and the potential to improve gut health in certain species. Freshwater species like eels and sturgeons, which naturally prey on insects and crustaceans, particularly benefit from including insect protein in their diet. Other species like freshwater catfish, trout, and salmon juveniles are expected to experience initial benefits when insect protein is incorporated into their diets 2.
During the wider use phase, insect proteins will be used alongside fishmeal and soybean meal but in relatively small percentages, primarily to harness their functional properties. Their price will not reflect the replacement value of the ingredients they substitute but rather their contribution to the overall feed value. This approach is expected to enable profitable scale-up. However, demonstrating the functional properties of insect proteins to the feed industry in a commercial context will require further research and time 2.
Looking beyond 2030, the scale of insect production is expected to bring costs to a level comparable to fishmeal 2.
For more detailed information on the market trends and developments in the insect protein industry, you can refer to the following sources:
Ynsect - https://www.ynsect.com/
InnovaFeed - https://www.innovafeed.com/
These sources provide insights into the companies leading the insect protein market and their contributions to the industry's growth.