The business of black soldier flies — an Afridigest Intelligence Brief
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Hi, friends 👋🏽! You may not have noticed it, but there was a quiet uptick in insect protein fundraises across the continent during the first half of the year. But don’t worry, we have you covered. This week, we take a look at the burgeoning business of black soldier flies across Africa and talk to the Managing Director of one of the continent’s largest insect protein producers.
And in case you missed it, here’s the previous intelligence brief on Africa’s smartphone market.
(P.S.— Should we kill or keep these new intelligence briefs: 😡 Kill • 😑 Meh • 😃 Keep)
If you’re new here: welcome — the Week in Review is sent on Mondays, the Fintech Review goes out on Sundays, and Wednesdays are for the Curated Content Corner or Intelligence Briefs like this one. (We’re late today. 😔) And from time to time, an original essay goes out on Saturdays. For past essays and digests, visit the archive & Afridigest.com. And with that said, let’s get into it!
Food futurism
Insects might just be the future of food.
As weird as that might sound, bear with me.
According to the latest UN projections, there’ll be 9.7 billion of us walking around by 2050. That’s a lot of mouths to feed.
And with global meat consumption continuing to rise, meat production will have to basically double by 2050.
But producing meat is tough on the environment. And it’ll probably be a while before synthetic, plant-based or ‘fermentation-derived’ meat is truly mainstream.
But worldwide acceptance of alternative, non-synthetic proteins seems to be at an inflection point. Lab-grown, ‘cell-cultivated’ chicken was approved for sale in the US just two weeks ago. And the EU approved a fourth insect for human consumption earlier this year.
Enter insect farming.
Farming insects consumes much fewer resources and has greater protein potential than farming meat — 100g of mealworm larvae, for example, offers 25g of protein, compared to 20g of protein in 100g of beef.
And even if you don’t have an appetite for arthropods, insect proteins can still improve the environmental footprint of your beloved burger indirectly — by replacing (or displacing some percentage of) traditional cattle feed.
And that’s not all.
Certain insect species are natural ‘bioconverters’ — they efficiently transform organic waste into useful products.
And since organic waste accounts for over one-fifth of global methane emissions, that’s a pretty bug big deal.
Let’s take a deeper look at edible insects.
GLOSSARY
Entomophagy, from the Greek éntomon [insect] and phagein [to eat], meaning: "the human consumption of insects for food."
While entomophagy has just recently captured the West's attention, insects have always been a part of human diets. It’s estimated that roughly two billion people worldwide practice entomophagy today — with over 1,900 different insect species on the menu.
“When you cook them, they smell a bit like cooked potatoes. The consistency is a bit harder on the outside and like soft meat on the inside. The taste is nutty and a bit meaty."
— Katharina Ungar
Food, feed, and finances
Slowly but surely, edible insects are moving into the mainstream — both for human consumption and animal nutrition.
A number of different demand and supply factors are at play here, but large-scale insect farming in the near term is arguably driven by insects as feed, not as food.
Money talks — and rising costs of conventional animal feeds have created a sense of urgency. So there’s now more demand for insect-based animal feed than ever.
Afridigestibles
574: Million metric tons’ worth of meat, seafood, dairy, and eggs consumed globally in 2020. (That’s roughly 75 kilograms per person FYI.)
60%–70%: Animal feed share of total livestock and poultry production costs.
$501.9B: Global animal feed market size in 2022.
4%: Projected global animal feed market CAGR through 2030.
$1.1B: Global insect feed market size in 2022.
12%: Projected global insect feed market CAGR through 2031.
70%: Consumer acceptance rate of insects as animal feed in Europe.
>85%: Acceptance rate of insect-based feed by farmers and feed producers in Kenya.
Africa's top animal feed producers: South Africa, Egypt, Nigeria, Morocco, and Algeria.
>80%: Percent of worldwide insect farming activity focused on black soldier flies.
GLOSSARY
Polyphagous, from the Greek poly [many] and phagein [to eat], meaning (of an animal): "able to feed on various kinds of food."
One of the advantages of farming black soldier fly larvae is that they're polyphagous. They feed on a multitude of substrates — restaurant waste, fruits and vegetables, offal, brewery and winery byproducts, and even manure — turning them into beneficial ingredients.Magic maggots
There are over 1 million different insects on the planet, but only a few are farmed industrially.
Crickets, mealworms, and locusts top the list for human consumption, but there’s just one star when it comes to insects as animal feed — Hermetia illucens, the black soldier fly.
Watch the ‘crown jewel’ of the insect farming industry work in this 2-minute video:
Unlike popular insect farming species like crickets and mealworms, black soldier fly larvae love organic waste and they practice polyphagy.
You can feed them spent grains from beermaking, all kinds of food waste, and even fecal sludge, and they still grow well. (They don’t eat bones though.)
In fact, that’s probably their superpower — an almost magical ability to convert organic waste into products that are valuable to us humans.
Even their poop frass is a nutrient-rich fertilizer.
It’s no surprise then that up to 90% of insect farms worldwide focus on black soldier flies.
That includes South Africa’s Maltento. And here’s Dominic Malan, the company’s Co-founder and Commercial Director:
“What makes the black soldier fly such an impressive little fly, is two-fold.
As an adult, it has no mouthparts [which is] important from a phytosanitary perspective…from a hygiene perspective. So, it’s a non-pathogenic fly and poses no risk from a pathogen transfer perspective.
But more importantly, because it has no mouth, what makes the larvae really interesting is the fact that they are almost designed to eat for their lives.
The little insect in larva form only lives for ten days. It hatches out as a tiny little neonate and for ten days it’s a larva and then it pupates, goes through metamorphosis, and hatches out as a fly.
This little larva can convert biomass into proteins and oils like no other organism.”
Pop quiz
The African outlook
Europe (and France, in particular) is the center of global insect farming activity today.
But the African continent might have unique advantages when it comes to black soldier flies: their larvae are most active at temperatures between 77 and 95°F (25-35°C). And that’s also the ideal range for adult fly mating and egg hatching.
So black soldier fly farms across the continent can potentially spend less on infrastructure and overhead farming costs than their counterparts elsewhere. And with the right investments, partnerships, and training, there’s a real chance for Africa to become a global leader here.
Investors in Africa’s black soldier fly farming space today include Novastar Ventures, Kepple Africa Ventures, GIIG Africa, E Squared Investments, Futuregrowth Asset Management, E4E Africa, GreenTec Capital Partners, ShEquity, and others.
And here’s a look at some startups using black soldier flies to transform waste into various end products across Africa.
Expert insights
Founded in 2017, Nigeria’s MagProtein is quietly one of the largest insect protein producers on the continent.
Every day, it produces approximately 1 ton of dry protein, 3 tons of wet protein, and 6 tons of frass; the protein goes primarily to local fish farmers for feed and the frass goes primarily to local crop farmers for fertilizer.
That’s according to George Thorpe, MagProtein’s Managing Director.
I spoke with him — on very short notice — to get a much-needed practitioner’s perspective. (Many thanks, George 🙏🏽)
Here’s the transcript — lightly edited for clarity:
What’s your perspective on the potential of insect protein production in Africa generally? Is it realistic to think that Africa can overtake Europe to become the global leader in this space?
“The most important thing to recognize is that the infrastructure requirements for scaling up insect production in Africa are much more advantageous than in Europe. We've got the right climate, we've got the right cost structure, and we have access to tremendous waste. Most of the waste in Africa is undervalued in my opinion, so there's a lot of potential for upcycling of nutrients in this space. And when we add the fact that 70 to 80% of protein products used for fish feed is imported in Nigeria & other countries, it’s clear that there’s a dire need for supply. This is remarkable opportunity in a market-ready environment.”
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