(Bloomberg) -- In a warehouse not far from Paris, 60 million black soldier flies give birth to larvae that are scalded, ground up and used to feed salmon and shrimp. The place doesn’t smell great. Innovafeed SAS is hoping to make this the future of fish food.
The French firm recently completed an expansion of its facilities in Nesle, France, where Innovafeed has three joint buildings dedicated to egg production, rearing larvae and making bug-based fishmeal and pet food — including five floors of insect incubators. With 35,000 square meters (37,700 square feet) of floor space, Innovafeed says its plant is now the largest insect farm in the world in terms of production capacity, and has the ability to generate 15,000 tons of insect protein per year. An additional expansion, already underway, is slated for completion in 2024 and will bring the facility to 55,000 square meters of floor space.
Launched in 2016 by three engineers, two of whom were previously project leaders at McKinsey & Co., Innovafeed has raised about $450 million in funding to date, including a $250 million round last year led by the Qatar Investment Authority and joined by agriculture giants Cargill Inc. and Archer-Daniels-Midland Co. Innovafeed is using the funds to expand in France and in the US, where it’s building a plant in the farming stronghold of Decatur, Illinois.
“The sovereign funds were ready to bet on us for the long term, as well as our industry partners,” said Innovafeed co-founder and Chief Executive Officer Clement Ray. “Not so much VCs, who expect a quicker return.” Ray said the company has already secured €1 billion ($1.1 billion) in contracts for its products over the next 10 years.
Interest in insect protein is rising alongside growing scrutiny of meat’s environmental impact. Insect-based fishmeal is more nutritious and has a lower carbon footprint than traditional fishmeal, which is itself a fish derivative that often come from Peru and Chile. About 30% of all fish catch is being transformed into fishmeal, said Innovafeed co-founder Aude Guo.
To further curtail its emissions, Innovafeed’s Nesle facility uses wheat byproducts from a neighboring starch factory to feed the flies, and waste heat from a biomass plant nearby to grant its insects a 30C room temperature. The larvae manure is also dried and transformed into fertilizer, and an insect-oil byproduct of Innovafeed’s process is used in poultry and swine feed.
While significant relative to the size of the insect-protein industry, the Innovafeed plant’s 15,000-ton annual output is still dwarfed by the production of traditional fishmeal, which averages around 5 million tons a year globally, according to the European Commission. “This business requires [mastering] fields such as genetics, biology, automation and data analysis,” Guo said, noting that the company had to spend more than $100 million to enter the business.
Innovafeed is focused on fishmeal and pet food, but other companies are also betting on bugs to feed people. Ynsect SAS, another French farming startup, has raised $625 million to develop insect protein to be used in fertilizer, animal feed and food for humans. French President Emmanuel Macron’s government has also pushed green technology as a way to create jobs.
“France had a long industrial tradition, and abandoned it these past four decades, losing 2 million jobs,” Finance Minister Bruno Le Maire said at the inauguration of the Innovafeed plant on April 21. The Nesle facility has 110 employees.
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