(Bloomberg) -- Insects just moved a step closer to European dinner plates.

Dried yellow mealworm, the larval form of the mealworm beetle, is safe for human consumption in both its whole form and as a powder additive, the European Union’s food watchdog said Wednesday.

The European Food Safety Authority’s opinion is a first step before authorities consider whether to approve sales of snacks, protein bars, cookies and other foods containing the bugs as ingredients.

The decision is a jolt for the insect-farming business, which researcher Arcluster predicts will grow tenfold to exceed $4.1 billion globally by 2025. Insects are emerging as a more sustainable source of protein thanks to their lower environmental impact and high nutritional value, attracting record venture-capital financing and attention from giants such as Cargill Inc. and Nestle SA.

“It is helping to create, basically, a new source of protein for the world in a sustainable way,” Helene Ziv, risk management and sourcing director for Cargill’s animal-nutrition business, said in an interview. “We’re very comfortable about its nutritional quality.”

This is the first risk assessment of insects as novel food by EFSA, which has another 14 pending applications for bugs -- from crickets to grasshoppers. The approval of yellow mealworm will present marketing opportunities, Andrea Germini, leader for the novel foods team at Parma, Italy-based EFSA, said in an interview. The watchdog also said allergic reactions to the mealworms are possible.

Europe is at the forefront of the burgeoning insect-startup scene, identifying bugs as part of its sustainable food agenda. EU authorities have poured money into research and factories, and the bloc already allows fish, dogs and cats to eat insect meal.

Putting Bugs on Dinner Menu Is the Solution to Feeding the World

Feeding animals, rather than humans, has shown the biggest promise so far. The International Platform of Insects for Food and Feed expects poultry and pigs to come next, further boosting the market. Of Europe’s projected output of 3 million tons of insect protein in 2030, only 10% will go into human food, with much of the rest going into animal feed, the Brussels-based lobby group estimated.

“There are more and more opportunities to work with new sustainable ingredients for the animal-feed industry,” Ziv said.

Cargill has a partnership with InnovaFeed SAS to supply insect protein for fish feed, while Archer-Daniels-Midland Co. will host a giant black soldier fly farm in Illinois. Nestle, the world’s biggest food company, added a pet food range made with insects.

A handful of EU states –- including Finland, Belgium and the Netherlands -- already permit sales of bug-containing foods in shops. About 2,000 insect species are in the diets of about 2 billion people worldwide, but many consumers in Europe will have to overcome what Niccolo Manzoni, managing partner at Paris-based Five Seasons Ventures, calls the “ick factor.”And that’s not the only hurdle. Insect-feed makers require substantial funds to scale up production in order to be cost-competitive, Manzoni said. The industry has a long way to go to reach the commercial volumes supplied now by the marine ingredients sector, said Anne Mette Baek, director of the European Fish Meal and Fish Oil Producers in Copenhagen.

One company already moving toward the dinner table is Protix BV, which operates Europe’s biggest insect farm and has investors including Rabobank’s private equity arm. The Dongen, Netherlands-based manufacturer rears black soldier fly larvae for feeding to fish and pets, and last summer it opened an online store selling foods made with crickets and mealworms. Revenue more than quadrupled last year, Chief Executive Officer Kees Aarts said in an interview.

“It’s so cool to be at the forefront of an entirely new category of nutrition,” Aarts said. “We will see a whole new range of applications emerging. We’re scratching the surface of the potential that this small creature offers.”

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