Don’t Bug Out—the Market for Edible Insects Is Jumping
Alternative “meats” and proteins have been all the rage for the last while. What’s jumping in line to be the next big protein thing? A report released earlier this week says crickets and other insects are going to have their moment.
By 2030, the global industry for edible insects, sold whole or in a smoothie-ready powder, will grow from sales of $1 billion to $8 billion, according to a report from Barclays and Meticulous Research.
“Edible insects are a common snack in many countries like Mexico, China, and Thailand, [where they’ve been] sold in markets and served in restaurants for years,” a Meticulous Research spokesperson told Fortune. “North America and Europe have remained the exceptions until recently. Though Insects are being championed as a healthy and sustainable alternative to conventional protein sources in Europe and the U.S., the ‘yuck factor’ is still one of the main stumbling blocks.” According to the Food and Agriculture Organization of the United Nations, there are 2 billion people around the world who already consume protein from up to 1,900 species of insects.
Even though North America pales in comparison to Asia’s insect consumption rate, the spokesperson said, it’s slated to have the fastest growth over the next four to five years, at more than a 25% compound annual growth rates. That growth will come primarily from increased exposure to the sector, new companies and outside investments, and a growing demand for more environmentally-friendly high-protein sources that require less land, feed, and greenhouse emissions than beef and poultry production takes.
“How can we feed people in a way that’s nutritious and also climate smart?” asked Wendy Lu McGill, owner of Denver-based insect farm Rocky Mountain Micro Ranch. “How can we do it in a way that doesn’t need a lot of land and water?”
McGill, started her insect farm in 2015 after working in international agriculture development. Her operation is Colorado’s first and only edible insect farm that caters exclusively to consumption by humans. She houses crickets and more than a million mealworms out of a 40 square foot shipping container—”and we aren’t even using all the space yet.” But McGill is already planning for the future by moving to a larger facility next month.
How edible bugs are sushi-adjacent
In the midst of the meatless-meat boom, it might be tempting to compare the potential trajectory of edible insects’ to that of other alternative proteins like those from plant-based Impossible Foods and Beyond Meat. Beyond Meat had a $3.8 billion market valuation after filing its IPO.
But a better comparison could be to sushi.
“It’s probably really closest to seafood in terms of its usage—it doesn’t have a lot of muscle mass like animals we eat,” said McGill. “Some of our consumer acceptance studies show that more people are willing to eat insects if it is a luxury food or if it’s related to sushi.”
But when McGill likens edible insects to sushi, she isn’t only talking about incorporating bugs into the Japanese delicacy—which New Haven, Conn,-based Miya’s Sushi has been doing since 2015.
“Until relatively recently, the idea of trying sushi—let alone having it become a mainstream menu item—was often thought of with disgust in many societies,” Dr. Matthew Ruby, a psychology lecturer at Australia’s La Trobe University told Science Daily. Ruby co-authored a study that found that people who regularly eat sushi are more likely to incorporate edible bugs into their diets.
“Just like eating sushi, eating insects will take some getting used to,” he said. “It appears the more open you are to ‘exotic’ foods, the more willing you’ll be to taste-test a grasshopper, or an ant, or even a spider.”
What the future holds
Both investors and larger scale food producers are keeping a keen eye on the growing market.
“For example, in February 2019, Ÿnsect, the French insect farming startup, raised $125 million in Series C funding in the largest early-stage ag-tech funding deal on record in Europe,” a Meticulous Research spokesperson told Fortune via email. “This takes the company’s total fundraising to over $160 million since it was founded in 2011. Moreover, in April, 2018, Entomo Farms raised Series A Funding from Maple Leaf Foods for expansion of cricket farm.”
Another sign of growth, McGill said, is the introduction of new insect-based ground meat replacements in Europe as well as the incorporation of products in mainstream North American supermarkets.
However, she added, “I do believe the jury is still out if this is really going to stick and if we can take a larger place in mainstream food.”
But if the expected popularity trajectory of edible insects around the world comes to pass, get ready to witness mealworm munching at high-end restaurants and in grocery store sample sections.
More must-read stories from Fortune:
—Michaels offers lessons in the perils of being a tech laggard
—It’s all clicking for Wayfair, a Fortune 500 newcomer
—How Dollar General brings in billionseach year
—Listen to our new audio briefing, Fortune 500 Daily
Follow Fortune on Flipboard to stay up-to-date on the latest news and analysis.