From Yuck to Yum: The Growing Potential of the Edible Insect Market
Our second short blog by the Food & Agri team of Anders Invest! Here, we outline our perspectives on key themes that are relevant to the Food & Agri sector and explain how we try to make an impact with our portfolio companies and investment strategies.
In 2018, the European Union approved the use of insects as a food source, marking a significant breakthrough in the food industry. In May 2021 the European Commission granted its first authorization for an insect based food product, approving the dried mealworm as a safe food ingredient. There are still some hurdles to overcome before edible insects are broadly consumed and accepted, but we anticipate widespread adoption and increasing growth in the next years.
Edible insects offer numerous benefits; however, some unfounded concerns about their safety exist. Online reports suggest that insects are non-digestible and could cause cancer, making some individuals hesitant to consume them. These misconceptions contribute to the existing stigma associated with eating insects, often referred to as the "yuck factor," which further discourages consumers from trying these alternative food sources.
Recent studies have refuted these concerns, demonstrating that edible insects are not only nutritious but also safe to eat. While it's true that some parts of insects are non-digestible, these components act as sources of fiber, aiding digestion like whole grain bread, beans, and seeds. Before granting approval, regulatory authorities like the European Union thoroughly assess the safety of edible insects for consumption. Moreover, around 2 billion people worldwide already incorporate insects into their diets regularly.
Although the edible insects market is still relatively small, it is poised for rapid growth as awareness of their benefits spreads and the "yuck factor" diminishes. For instance, the global mealworm market is forecasted to hit $1.27 billion by 2030, exhibiting a compound annual growth rate of 28.6% from 2022 to 2030. We believe that the path to success for businesses in this market depends on optimizing farming operations to reduce costs while enhancing quality.
The promising market potential and its unique market position are the two main reasons for Anders Invest Food & Agri to invest in Starfood Holland. As a European market leader in mealworm farming for the food and feed industry, Star Food operates a large-scale insect farming facility in Hungary. Together with VDL Groep, Star Food recently developed a customized feeding line to further automate mealworm farming, effectively reducing marginal costs while ensuring high quality.
Robust market growth isn't the sole factor driving Anders Invest's entry into the mealworm market. Mealworm proteins offer a more sustainable alternative to many traditional protein sources, such as meat. Stay tuned for our next LinkedIn blog, where we'll dive deeper into this topic.
