Food & Agri

12 january 2024

Toward Sustainable Nutrition: Star Food founder Wim Soetendaal‘s on mealworms as food

This article is part of a series of LinkedIn interviews by the Anders Invest Food & Agri team. Here, we take a look at the people and activities within our portfolio companies. In this interview, we talk to Wim Soetendaal, the founder and CEO of Star Food. Star Food cultivates various insects, originally for fishing and animal feed, but now also for human consumption. Star Food has a facility in Hungary where mealworms are cultivated and processed for use in food.

Early years and transition to human consumption
Wim Soetendaal started breeding worms for fishing in 1985, and two years later, mealworms, grasshoppers, and crickets were added. This led to the establishment of Star Food, a company specializing in insect cultivation for animal feed, but which is now also taking steps to make insects suitable for human consumption. In the beginning, Wim had to figure out a lot about insect breeding himself: "I observed a lot: what does an insect do, and why does it behave differently today than tomorrow? I made it my own and optimized it – I still enjoy doing this. Automating and developing the cultivation process is still my favorite thing to do."

The shift to human consumption is crucial, given the irreversible protein transition and the search for sustainable and healthy protein sources for both humans and animals. "Insects are one of the most sustainable protein sources available and are also healthy," says Wim. He further explains, "For example, you need much more land, feed, and water for a cow than for these insects. This way, we can breed more kilograms of insects per square meter than we can keep cows." Additionally, mealworms are nutritious and contain all the essential amino acids that the body cannot produce on its own.

Changing market
Wim observes rapid changes in the mealworm market: "The development is fast: just like with chickens, you started small in the past, and now you have mega farms. It's the same with insects; it has become more of a product and has thus been scaled up." The key for the future will be producing mealworms at the right cost and with good quality. The product must be consistent in nutritional value and contain enough protein.

It is also important to connect consumers to the product, with Wim noting that the fear of eating insects in the West is often psychological. The first step is to market mealworms as an ingredient rather than as a whole insect. This way, various types of food can be created, from burgers to shakes and sports drinks. An important addition that Wim emphasizes is the enrichment of protein: "The processing of mealworms is crucial. Originally, these insects have about 35% protein. Through processing, we enrich this to 80%, making it equivalent to existing protein sources like milk protein."

Legislation and future outlook
Regarding the processing of mealworms for human consumption, there are several hurdles to overcome, especially with regulations and the issuance of so-called Novel Food Dossiers. This process is slow and consumes a lot of money and time. As a result, producers and processors are hesitant to make large investments due to the risk of a dossier not being approved or legislation changing. Nevertheless, Star Food is making good progress for the future: "At our location in Hungary, mealworms are cultivated on a large scale, already about 15 tons per week. We are working to further improve these processes and explore possible collaborations," explains Wim. "It is certain that insects will play a significant role in food and feed." When asked if Wim expects to witness this himself, he confidently responds "Yes, for sure!"

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04 june 2024

Food & Agri

Unfolding CSRD This article is part of a series of short blogs by the Food & Agri team at Anders Invest. This article is specifically written for individuals and companies that are interested in or affected by CSRD. In total, 50,000 companies will need to comply with this legislation in the coming years. Additionally, companies who do not need to report will face additional pressure to supply information and data regarding their sustainability performance from B2B customers. Are you involved with a company that will need to comply with the CSRD or needs to generate impact data? Then this article is meant for you. Let’s unfold it’s basic concepts together.   The Corporate Sustainability Reporting Directive (CSRD) is a piece of legislation developed by the European Union which passed on January 2023. Starting January 1, 2024, CSRD intends to ensure that large and listed companies will  report and disclose sustainability information in an elaborate and consitent framework in their management reports. It builds upon previous legislation through: an extended scope including a gradual integration of large companies, standardized requirements, assurance requirements, a digital format, and integration into management reports. Given the extensive scale of the directive, it is very likely that most companies are affected by this directive (either directly or indirectly). Let’s put together some basic concepts in this article to unfold CSRD and understand it’s mechanisms. Why did CSRD came into effect? CSRD aims to address climate change, stakeholer salience and governance malpractises. The driving force behind the CSRD is the European Union's ambitious goal, as outlined in the European Green Deal, to become the first climate-neutral continent and achieve a pollution-free environment by 2050. The Green Deal is the overall sustainable growth strategy of the EU. To direct capital to investments that drive sustainable solutions, the EU made an Action Plan on Financing Sustainable Growth (APFSG) which consists of a set of policy initiatives. To prevent greenwashing and set aligned activities for sustainable investments, the EU taxonomy regulatory framework came into effect in 2020. Basically, CSRD is required to increase transparancy through disclosure of sustainability information, enabling EU taxonomy to work. Overall, CSRD’s goal is not to report for the sake of reporting, but for the sake of transitioning to a green economy with the relevant public information to do so. However, it is difficult to asses how much of the effort will be translated to actual impact. How will CSRD impact the business climate of Europe? Starting in 2025, the first companies need to report on their ESG impacts and opportunities over the year 2024. CSRD compliance is phased in, depending on the type of company. The first report year for the application of the new regulations will be structured as follows: In 2025, companies already subject to the previous non-financial reporting standards, particularly large public-interest entities with more than 500 employees. The subsequent year, 2026, marks the inclusion of other large companies, specifically those with over 250 employees. By 2027, the reporting requirements will extend to include listed Small and Medium-Sized Enterprises (SMEs). Finally, in 2029, non-EU companies generating more than €150 million in revenue within the EU will also be required to comply with these reporting standards. Gradually, more than 50.000 companies will need to report a maximum of 11.000 datapoints per year. The European Reporting Advisory Group (who prepared the standard) estimates that the one-off costs are around €287.000 and recurring cost are €319.000 for companies the first companies to start in 2025. For later companies the costs are €146.000 (one-off) and €162.000 (recurring). As you can see, the amount of work and costs involved with the mere compliance, let alone impact, are significant. Next up, what is in the actual report? What will be in the report? Before CSRD, the annual report consisted of a management report, followed by an audit report and financial statements. The sustainability statements are based on the European Sustainability Reporting Standards (ESRS) and consist of General Information (ESRS-1), General Disclosures (2), Environmental information (ESRS-E), Social Information (ESRS-S), Governance Information (ESRS-G). Thus, CSRD is the piece of legislation as directed by the EU, ESRS are the standards that specify what to report.                List of topical standards: ESRS E1 Climate change ESRS E2 Pollution ESRS E3 Water and Marine Resources ESRS E4 Biodiversity and Ecosystems ESRS E5 resource use and circular economy ESRS S1 Own Workforce ESRS S2 Workers in the value chain ESRS S3 Affected communities ESRS S4 Consumers and end-users ESRS G1 Business Conduct ESRS 1 and 2 serve as a guideline for the general sustainability reporting. The cross-cutting standards define the information to be disclosed about material impacts, risks and opportunities related to sustainability aspects. An understanding of the structure, concepts and general requirements for the preparation and presentation of sustainability information is to be reported. For the topical standards, one is required to conduct a double materiality assesment to map impact, risks and opportunities in relation to the different topics. All topics that are material in the value chain of the company have to be reported and substantiated with data. Accordingly, all topics whose impacts are either materially related to the environment or society (impact materiality, inside-out) or which have a short-, medium- or long-term financial impact on the company and can thus significantly influence the company's development and performance (financial materiality, outside-in) have to be reported. Once all material points are covered, the report will be auditted by an external assurance party. As you may see, it will prove difficult to operationalise this directive and the amount of abbreviations by itself is a real headache. In the next article, we will go in more detail on the impact on the business landscape for Food & Agri and what our strategy involving CSRD is.

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02 may 2024

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