Bildnachweis: M;ichael – Generiert mit KI – stock.adobe.com.
As of February 10, 2025, the EU has approved the use of UV-treated mealworm powder in various food products, including bread, pasta, and pastries. What does this decision mean for investors and market dynamics? We discuss this with Stéphane Roussel, Partner at the European Circular Bioeconomy Fund (ECBF), one of Europe’s leading investors in the bioeconomy sector.
Dear Mr. Roussel, the EU has approved UV-treated mealworm powder as a food ingredient. Is this a major breakthrough for the insect protein industry?
Stéphane Roussel: It is positive news, however one of little material significance for the emerging insect industry both on the supply and on the demand side. First on the supply side, with the notable exception of French Ynsect, most market players are producing Black Soldier Fly (BSF) and not Meal Worm because of BSF’s higher productivity (and hence lower cost promise). Second on the demand side, due to low consumer acceptance and a lack of integration into mainstream food products, the market opportunity for insect ingredients in human food in the EU is very small.
Isn’t this regulation coming a bit late? Some companies are already facing financial challenges. What is your view of the current market situation?
Too little and too late indeed, especially at a time when early pioneers in meal worm production like Ynsect and Agronutris are facing financial strain. Following the five phases of Gartner’s Hype Cycle, we have now reached the trough of disillusionment. With the right level of strategic investment, progress in operational efficiency, and policy support to scale sustainably, the industry can see the slope of enlightenment, likely followed by a phase of consolidation.
The ECBF invests in companies such as Protix in the Netherlands. Why did you choose this company? What makes Protix special?
Protix stands out as a technology leader in the circular bioeconomy. With strong R&D capabilities and fully integrated insect farming solutions, the company has successfully scaled processes for producing insect-based proteins and oils. Its excellent execution capabilities and operational mastery have made Protix the only player to date to have demonstrated stable industrial production at nominal capacity. Consistency and reliability of supply are key differentiators for its customers.
Consumer acceptance in Western markets remains a challenge. What strategies do you see as promising to overcome scepticism about insects as food?
We don’t see a credible scenario in which insect ingredients for human food in the EU can reach high double digit or triple digit million euros figures in the next 5-7 years. Success for the insect industry is more likely to come from driving manufacturing costs down via operational efficiencies and industrial integration to the point where these ingredients can substitute fishmeal for animal feed – especially used in aquaculture and farmed animals. Insects would then indirectly find their way into our food system but as a substitute of an unsustainable feed source.
What do you see as the biggest hurdles to the sustainable scaling of the insect protein industry – and how could they be overcome?
Breaking the cost-price conundrum through further scaling. Insect protein does not have yet the industrial scale to compete with cheaper protein sources like fishmeal. On the supply side, continued innovation, eg., in insect genetics, automation, and feed optimization are necessary to reduce costs. On the demand side, strategic marketing and product innovation are essential for widespread adoption, as would be signaled by the launch of a major product by a leading pet food brand.
What other measures do you think are needed to strengthen the insect protein market in Europe? How does it compare to the US and China? Are there other competing players that need to be considered?
Access to a wide set of feedstocks as substrates for insects. For example post-consumer organic waste. The potential for using post-consumer organic waste as insect feed aligns with circular economy principles and sustainability goals. But regulatory frameworks worldwide are cautious, and for good reasons. The primary concerns revolve around ensuring food and feed safety, preventing disease transmission, and maintaining public health standards, especially for meat-and-fish-containing materials. As research progresses and safety protocols are refined, we hope regulations will adapt to support the safe and efficient use of organic waste in insect farming. The EU currently permits the use of specific pre-consumer vegetal by-products and former foodstuffs that do not contain animal products, provided they meet safety standards. Discussions are ongoing to potentially expand the list of permissible substrates, aiming to enhance sustainability within the sector. There are many more players in other regions beyond the US and China. In South East Asia for example Nutrition Technologies in Malaysia, Entobel in Vietnam. Some emerging ones include Next Protein in Turkey, Enthos in Colombia, and more to come.
What are the financial barriers to entry? What is the amount of capital required to build a competitive business and what is a realistic timeframe for a return on investment?
The main financial barriers include high initial capital expenditure (CAPEX) and long payback periods. Setting up a competitive insect protein facility requires approximately EUR 30–€100 million, depending on scale and automation level. A realistic ROI timeframe is between seven and ten years, though this can be shortened with strategic partnerships, efficient operations, and strong market positioning. Companies that integrate waste upcycling into their business model can reduce input costs, thereby improving profitability.
What is the ECBF’s investment strategy in this sector for the coming years?
After an in-depth analysis of the insect ecosystem in Europe, we have chosen to support Protix as an emerging category leader, based on its proven track record in industrializing insect farming.We will continue to support them, especially as they seek to assert their market leadership and participate in sector consolidation.
Thank you for the conversation.
The interview was conducted by Urs Moesenfechtel.
Autor/Autorin
Urs Moesenfechtel, M.A., ist seit 2021 Redaktionsleiter der GoingPublic Media AG - Plattform Life Sciences und für die Themenfelder Biotechnologie und Bioökonomie zuständig. Zuvor war er u.a. als Wissenschaftsredakteur für mehrere Forschungseinrichtungen tätig.
