Many people are repulsed at the idea of eating insects, whether freeze-dried or still very much alive and wriggling. But do those same reservations extend to what they feed their beloved pets? Not if recent data is to be believed.
Rabobank, for one, is bullish about its expectations for the market. It has projected demand for insect protein in the animal feed and pet food sectors would reach 500,000 metric tonnes by 2030, up from an estimated market size of 10,000 metric tonnes in 2021.
Go deeper with GlobalData
The Netherlands-based financial-services group said the strongest growth would be in the pet-food market, in which insect protein is forecast to reach 150,000 metric tonnes globally.
Ethical pet owners drive interest
It would be understandable to assume insect-based pet food is a relatively nascent concept but some products have been around for about a decade.
But, in recent years, as the pet-food market has enjoyed strong growth (in part due to a surge in pet ownership during the Covid-19 pandemic), a raft of pet-food products containing insects have been launched, ranging from dry and wet food, through to pet snacks and treats. There have also been health supplements and preventative healthcare products launched for pets derived from insects.
Pet food for dogs and cats is the largest market for insect protein, followed by the aqua-feed (fish) market, which lags a long way behind.
How well do you really know your competitors?
Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.
Thank you!
Your download email will arrive shortly
Not ready to buy yet? Download a free sample
We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form
By GlobalDataManufacturers of these products highlight the nutritional, functional and environmental benefits of insect-based food. They argue the insects have a very high protein content and contend farming the insects uses significantly less land, water and carbon emissions.
“We’re using a very clean protein where there’s no herbicides, pesticides, antibiotics – there’s no nasties in it,” says Denise Saber, founder of UK-based Percuro, which was one of the first brands to market with insect protein products for dogs. “It’s as pure as you could ever get in terms of the protein itself.”
According to Nora Zuche, the founder of South Africa-based Aiko Pet Foods, health and sustainability benefits have attracted a host of ethical consumers to the category. The company, only set up last year, mixes insect protein with ‘superfoods’ such as rooibos and kelp to produce a range of products for dogs.
“Early retail adoption has played a crucial role in Aiko’s growth, as many shops are increasingly supporting sustainable alternatives,” explains Zuche. “They’re seeing more of their customers ask for eco-friendly products like ours, driven by a shift toward conscious pet ownership.”
Another growth driver for the category is the animal welfare factor, which has seen the pet food industry come in for a lot of criticism over the years.
“One of the things that our consumer base really likes is the fact that we can claim cruelty-free,” Saber says. “So, there’s no nasty things that go on in a lot of these abattoirs and slaughterhouses that, quite frankly, are unacceptable.”
And Saber believes the recent ‘pet humanisation’ trend, which has seen owners place a high value on the health and happiness of their pets by feeding them specific meals, has also aided growth.
“What consumers want for themselves, they also want for their pets as well,” she explains. “You’re not going to get folks that live on a diet of junk food buying our food for their pets because it starts with the human and how they see the world and what they want for themselves, which is clean, sustainable, healthy foods that will give them energy, make them feel good, and extend their lives.”
Picking likely hotspots
Much of the strongest growth for insect-based pet food over the past few years has been in European countries such as the UK – which experts say is leading the way globally – Denmark, the Netherlands and Germany, mainly thanks to regulatory acceptance of the use of insects in pet foods.
At present, there are seven species of insects authorised in the EU for use in pet food. The top three most developed species are crickets, mealworm and black soldier fly. The category is expected to enjoy strong growth in the EU over the coming years but recent regulatory changes in the US mean producers of insect-based pet-food expect the country to be central to the expansion of the overall market.
In January 2021, the Association of American Feed Control Officials granted authorisation for the use of black soldier fly larvae in adult maintenance dog food and treats, although the insects cannot be used in pet food for puppies.
Due to the easing of the regulations, Saber anticipates big things for the US market for her brand.
“The US is always, in my experience at least, rather slow to come to the table but, when they get there, they don’t hang about,” she explains. “States like California and Florida have got large populations and a lot of pets, and there is a real sustainability push, particularly on the West Coast.”
However, for Australia-based brand BuggyBix, which blends insect protein and real food to create “delicious and sustainable” treats and dental bars for dogs, the biggest opportunity is on the other side of the globe to the US.
“From a geographic perspective, Asian pet ownership is rapidly growing and presents an exciting opportunity,” says Shaun Eislers, founder of BuggyBix. “Reflecting on our target markets, countries such as Korea, Taiwan and Hong Kong all demonstrate increasing demand for insect-based pet products. In terms of consumer awareness and adoption, these markets are ahead of Australia and are considered key opportunity areas.”
Not all investors bitten by bug
Given some of the projections for the category, it is little wonder some insect-based pet food brands have caught the eye of investors.
Earlier this year, UK direct-to-consumer company Tuggs, which sells products made of a mix of insects with other meat, fish and vegetable ingredients, secured funding of £1.1m ($1.4m).
In July, Indonesia pet-food manufacturer Pawprints Group, which markets insect-based products under its namesake brand, announced more funding as it aimed to more than double sales next year.
In addition to the new products brought to market by start-ups, established, pet-food manufacturers have started experimenting with insect protein and launching their own lines.
Conventional pet-food majors have also backed insect-focused start-ups. Thailand-based seafood group Thai Union, which has a sizeable pet-food business, has invested in local insect protein pet-food business Orgafeed. Even meat giant Tyson Foods has been attracted to the area, last year investing in Dutch insect-protein supplier Protix with plans to build a US production facility primarily to serve the pet-food market.
At this point, our view is that there is not significant opportunity in the category
Nick Cooney, Lever VC
However, not all investors are convinced. Lever VC is a fund that “invests in companies creating the future of food and agriculture”. Managing partner Nick Cooney says his business has been tracking the insect pet-food market but he has doubts about the size of the prize.
“At this point, our view is that there is not significant opportunity in the category,” says Cooney. “With very roughly a $1bn pumped into the [insect] category over the past decade, there isn’t a single consumer brand in the human food space that could be called a success story and the targeted B2B applications haven’t landed in any meaningful way either. As a result, we are quite sceptical of the space and do not plan to invest in it.”
Cooney identifies a number of challenges facing insect-based pet food. “You have many of the same dynamics and issues with insect protein production you have with conventional animal protein production: producers are attempting to breed, feed, raise, kill and process a massive number of living creatures in a confined space,” he explains. “That creates a huge amount of challenges and negative externalities that you don’t have when dealing with plants or microbes.”
Problems on price
Price points are also a challenge. At present, some insect-based pet food is more expensive than luxury pet-food brands. That’s largely because the category is still in its infancy and it costs a lot of money to design, build and operate insect farms. Cooney, for one, isn’t convinced the pricing issue is a gap that could ever be bridged.
“From a price perspective, insect protein is never going to be able to be cheap enough to compete with commodity proteins, or many other alternative protein sources, so there is therefore the question of value proposition,” he says. “If one is going to replace animal protein with a different protein source, for most applications insect protein has no meaningful consumer or environmental benefits over plant-based proteins or other alternative proteins for which production is far simpler. You also have far more variability in nutritional composition and quality with insect protein than you will with other alternative proteins, because again you are dealing with living creatures and their inherent variability.”
However, BuggyBix’s Eislers says that since the launch of his company in 2017 prices have reduced significantly and he believes they will continue to fall.
“Looking to the future, commercial propositions driving increased demand is the only way the market will achieve commodity pricing,” says Eislers. “Alternative or complementary protein demand is not consumer-led. Market development requires businesses to position insect-based propositions in front of consumers to educate and encourage adoption and normalisation. Given viable insect-based business propositions currently exist within the pet food market, as this space continues to grow and the supplier landscape expands, it is reasonable to expect continued downward pricing pressure.”
The challenge of education
While the insect pet-food market undoubtedly faces multiple challenges of varying degrees, the biggest issue on which experts agree is what Cooney describes as the “ick factor”.
“Obviously in some parts of the world insects are a regular part of diets but, in the West, for the vast majority of consumers there is a massive, massive ick factor because insects are associated with pestilence and disease,” he says.
Aiko’s Zuche concurs. “The biggest hurdle we face is educating people on proper dog nutrition and the benefits of insect-based food,” she says. “While some consumers are initially hesitant about insect ingredients, it’s important to highlight that insects are highly nutritious and a sustainable protein source. As awareness grows, we believe this trend will continue to gain traction.”
Eislers says some of these barriers are starting to come down, with perceptions towards insect-based food sources generally slowly improving globally. As a result, he says that bricks-and-mortar and online retailers are increasingly interested in stocking the company’s products.
But, while the “ick factor”, remains it may take longer than many people predict before the growing buzz around insect-based pet food can drown out these concerns.
