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Investigating the commercial feasibility of a novel biological enhancement technology for creating a sustainable, high value, insect-derived protein supplement for the EU aquaculture market

Periodic Reporting for period 1 - ENTOMICSBLUEGROWTH (Investigating the commercial feasibility of a novel biological enhancement technology for creating a sustainable, high value, insect-derived protein supplement for the EU aquaculture market)

Reporting period: 2017-05-01 to 2017-09-30

The FAO estimates that food production needs to increase by 70% by 2050 to feed the world’s growing population, with aquaculture representing one of the most important growth sectors. However, there is increasing concern around the sustainability of salmon aquaculture feed supply chains, with a broad industry trend of moving away from fishmeal as a source of protein and Omega-3 oils. Fishmeal is currently produced using wild-caught forage fish such as anchovies in Chile and Peru, but due to increased demand and strict catch quotas designed to address overfishing, fishmeal prices have risen to £1,500 per tonne – four times as expensive as cheaper plant-based proteins. However, plant proteins such as soy are deficient in key amino acids needed for carnivorous fish diets, and contain anti-nutritional factors that limit digestibility and increase disease risk. The industry needs a sustainable, high quality feed alternative.

Simultaneously, 1/3 of all food produced globally is wasted. This represents £500 billion in lost value each year, and leads to 3.3 billion tonnes of carbon emissions. This is forcing a fundamental rethink around the ‘food waste loop’ and ways we might better utilise the unavoidable fraction of food waste.

Insects, specifically the Black Soldier Fly (BSF), represent a natural ‘food waste conversion engine’, and can cheaply and efficiently transform organic waste into complex proteins and fats in their bodies. Black Soldier Fly larvae can reduce food waste volume by up to 95% over a rapid two week growing cycle, and they’re found throughout the world, so a potentially global solution. As the insect larvae eat the food waste, they efficiently synthesise and concentrate the low-value carbohydrates, sugars and ‘nasty stuff’ into much more chemically complex and valuable compounds such as proteins and fat – an ideal feed source for farmed salmon.

However, while ‘basic insect meal’ has been demonstrated to be a promising nutritional alternative to fishmeal in salmonid aquaculture, yet there are concerns that basic insect meal lacks some of the added functional benefits that are naturally found in fishmeal. Without these functional benefits, such as improved growth and enhanced feed conversion rates (‘FCR’), major global feed companies have indicated that insect meal will struggle to become a commercially viable alternative to fishmeal. To address this challenge, Entomics has also developed a novel microbial fermentation technology to turn the insects into a targeted, high-value feed additive with functional effects for farmed salmon. The process uses various microorganisms that have been shown to enhance FCR, disease resistance and overall health for economically important fish species like salmon.

The overall objective of this project was to assess the technological, practical and economic viability of this idea, together with the resources needed to implement it and the risks involved.
In this feasibility assessment, we investigated the commercial viability of our microbiologically-enhanced insect meal by getting insights from experts across both the academic and commercial sectors and researching several key areas:

i) Market Positioning

Firstly, we conducted primary research with commercial operators in the feed formulation and aquaculture industries to understand current feed profiles, price points and market sizes, with a specific focus on the differences between standard feeds and probiotic / microbiologically-active supplements.

We realised that the worldwide aquaculture feed market is currently valued at over £50 billion and expected to grow by 10% annually to 2021. Specifically, we aim to provide high-value feeds to the premium £1 billion European salmon aquaculture feed market, primarily located in Scotland and Norway. Feed is by far the largest cost driver for salmon producers, representing up to 50% of total salmon production costs. The salmon feed market is also highly concentrated, with three several feed formulators (BioMar, Cargill and Skretting) controlling over 50% of the market.

In addition, particularly in the short term as the company develops, there are lucrative niche markets in the pet food space that offer a preliminary entry point due to higher prices and lower volumes required. The global pet food market is a £72 billion industry, and insect meal would be ideal as a unique, high quality protein additive to a variety of premium brands. Entomics aims to target pet food markets as an initial focus in 2019 and 2020 during scale up.

ii) Scientific Efficacy

Given that probiotics within the aquaculture industry is a relatively unexplored area, we then looked at the science underpinning probiotic enhancement by interviewing several leading academics, such as Oscar Monroig from the University of Stirling, and Dr Afroditi Chatzifragkou from the University of Reading. We particularly wanted to focus on the specific challenges facing the aquaculture industry in terms of maintaining a balanced micro-biome profile at different ages and stages of fish development, so we can target more meaningful ‘niches’ where our product will be of greater impact. This will help to understand the cost / benefit tradeoff required to balance increased fish health / growth / feed conversion rates with potentially higher production costs.

Interacting with these individuals helps us understand that significant feed conversion rate reduction (5-10%) and health increase has been demonstrated through microbe-enhanced feeds in fish. Since feed represents up to 50% of EU salmon aquaculture costs, our product enables EU salmon farmers to reduce operational costs by up to £40m. Salmon hatcheries would also see significant savings via the reduction of disease and mortality during the fry and smolt stages.

iii) Commercial Factors

We investigated the likely commercial implications involved in scaling up our Pilot demonstrator bacterial enhancement process into a commercial Pilot Plant that could produce up to 1,000 tonnes of microbiologically-active insect meal each year. This would be key to understanding how much of our technology can be achieved using existing repurposed machinery and processes, and how much will require a totally customised engineering solution to support the underlying biological transformation.

We were able to work out a more detailed logistical model of the supply chain that supports this aquaculture feed technology. Since the market is still evolving, we have assumed that Entomics will operate integrated 'rearing and processing' facilities, given that the earlier biological transformations. This piece of the project was more difficult given the time and budget constraints, particularly given that we are still optimising the final microbial consortia 'recipe', and this final consortia will largely determine what kind of engineering solutions needs to be in place.

Overall, we were able to map out the necessary commercialization steps for our innovative insect-meal processing protocol that simultaneously extracts and adds beneficial microbial profiles to the end-product in order to hugely increase its biological effectiveness for the EU aquaculture market. While insect meal has already been identified as a sustainable alternative to fishmeal in the global aquaculture market, our novel processing method is expected to create a ‘step change’ in terms of building entirely new, customized functional feeds that address highly topical areas of concern for the industry around disease resistance and fish health. This should provide opportunities for Europe to further develop its already highly productive aquaculture sector, and transition away from harmful antibiotics and chemico-therapeutic products.
While salmon represents our initial target market, our technology also has the potential to address the global £400 billion animal feed market for poultry, swine and livestock in future years, as technological and regulatory barriers are overcome. We’ve identified the £150 billion poultry feed industry as the next likely market for our product, given that insects already form part of poultry’s natural diet. Furthermore, functional feeds can mitigate the overuse of antiobiotics against food-borne pathogens like Campylobacter jejuni.

Beyond the scope of this particular project, Entomics is also incorporating a deep understanding of the novel anti-microbial properties of insects to develop products and processes that further create value for the end-user, and address critical needs around antibiotic use and resistance within the animal feed supply chain. While we continue to protect key IP through patents, we anticipate significant IP will also arise as trade secrets, particularly around reaction protocols and targeted microbial consortia.

The project also supports the development of a more sustainable aquaculture feed alternative to environmentally harmful products like fishmeal and soy. The overfishing of forage fish like sardines and anchovies for fishmeal currently leads to marine ecosystem degradation in areas like South America, while increasing environmental vulnerability to sudden shocks. Meanwhile, resource-hungry crops like soy have been directly linked to deforestation activities in places like Brazil, where 2.6 million hectares of rainforest are cut down every year, leading to significant reductions in global carbon sink capacity. By embracing insects as a substrate, Entomics’ technology also unlocks the benefits around insects’ unique waste-recycling abilities. In the UK, food waste contributes 20 million tonnes of carbon-equivalent GHG emissions each year; if insects were to process 500,000 tonnes of waste per year (5 commercial plants), 1.5 million tonnes of GHG could be avoided annually.

This project will enable Entomics to further contribute to the dynamic biosciences economy of the EU in the form of increased investment, R&D and job creation. Importantly, the outcomes of this project will also lead to high-tech commercial manufacturing activities in the UK, requiring both skilled and unskilled labour and establishing a leading new ‘agri-industry’ presence around insects for animal feed. Our insect-derived feed also creates opportunities for social change and empowerment in disadvantaged communities globally. Aquaculture is the fastest-growing animal-production sector, yet fish farmers in Africa use low-quality feeds resulting in poor yields, as fishmeal is expensive and inaccessible. A rudimentary version of our fermentation platform could be deployed anywhere, given that the primary input – insects – can be grown on a variety of waste substrates like food waste and manure at very little cost.