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INTERVIEW: InnovaFeed Seeks First Mover Advantage on the Aquafeed Market with Speedy Scale-Up of Insect Production

24 January 2019- From a pilot plant today to five production scale facilities by the end of 2022. This is the objective of French insect protein firm InnovaFeed. One might be tempted to dismiss these objectives as visionary self-delusion; the insect protein sector likes grandiose promises. And yet, although only three years old, InnovaFeed is more than just hype—it is well-funded, well-networked, already operational, and by all appearances grounded in reality. And it’s in the middle of making a serious play to finally bring large volumes of insect protein meal to the aqua feed market.

Start with the finances. Late in 2018, InnovaFeed announced a successful new round of funding, totaling EUR 55 million for the calendar year. Notable among the company’s investors are French private equity firm Creadev and Singaporean sovereign wealth fund Temasek. They have helped provide the capital for the company’s built-out efforts, starting with its first large-scale production facility, set to open late this year or early next year in Nesle, France, and will be instrumental in raising the estimated EUR 200 million InnovaFeed sees itself investing to reach its five-plant objective.

As explained by InnovaFeed’s head of marketing and business development Maye Walraven in an interview with Feedinfo, the pilot plant in Gouzeaucourt, which has been operational since 2017, helped test the technical and processing aspects of InnovaFeed’s technology, allowing them to fine-tune the designs for Nesle. “This plant in Nesle will be our target plant; once we have that plant in place, we will be able to build several in parallel,” she says. Each of the 5 upcoming plants is expected to bring online “at least” 10,000 tons of processing capacity annually. “They might be bigger,” she offers, depending on where they are based.

InnovaFeed is currently exploring potential locations for these next facilities with a focus on international expansion. As Ms. Walraven explains, the location of the plants is one of the key strategic elements of the company’s model. InnovaFeed’s plants are located in geographical areas where agro-industries are already in place, whose co-products, unusable for human nutrition, can feed InnovaFeed’s larvae. The industrial integration process set up by InnovaFeed with these local agri-businesses aims to be an example of industrial symbiosis. For example, she explains, the current project relieves InnovaFeed’s partner of by products which would otherwise have to be treated at a cost prior to transport for other applications.

Beyond securing the plant with raw material for feed, co-location with plants processing agricultural commodities enables many synergies between the two companies (for example, in terms of energy, water, logistics) and thus optimizes the use of natural resources, with a strong positive impact on climate change. Meanwhile, proximity to the aquaculture customers using the insect protein is less of an immediate concern, as the environmental impact of shipping the final product is comparatively low. And after all, she points out, the fishmeal this product is competing with is traded worldwide.

Maye Walraven
Head of Marketing and Business Development
InnovaFeed

“Today, our goal is really to become the world’s experts in insect rearing and in processing insect meal,” she says. To realize this, the company is rapidly scaling up its workforce, aiming to triple its headcount during 2019, particularly focusing on new engineering talent. It is also engaged on the R&D front, where the company is grappling with several questions. One branch is focused on the “zootechnical” knowledge, everything necessary to raising larvae in the best condition possible. This includes research into the feed the company is using to grow its grubs, as well as the genetic component (while the company declines to use genetic engineering techniques, Ms. Walraven points out that insects have not been subject to the many generations of genetic selection through careful breeding that has been in place for other domesticated species, and they are keen to make sure they are selecting the best traits for the next generation). Another branch is focused on processing techniques, to offer the best possible product quality.

When it comes to commercialization, InnovaFeed’s current focus is almost entirely on the aqua market, allowing it to specialize in the particular needs of these customers. “We’re collaborating with the big players, we’re not talking boutique firms but leaders in aqua feed,” acknowledges Ms. Walraven. Projects are underway with major aquaculture producers as well, although it remains too early to share any names publicly. Going forward, she sees the company looking into expanding their focus beyond salmonids and into species such as shrimp, catfish and tilapia, sea bass, and sea bream: “we’re exploring all of these options,” she says. Outside of aquaculture, using the protein meal in species such as poultry and even pigs might eventually be of interest, though this will require regulatory changes in the EU.

Given the novelty of insects—and the strong emotional response they can elict—InnovaFeed has put significant efforts into probing how end-consumers will accept this change in fish diets, conducting surveys at points of sale. “What these studies showed is that the average consumer has little idea what fish eat,” Ms. Walraven explains; they are, however, quite familiar with the concept of fly fishing and therefore know insects are part of some fish’s natural diet. Still, she says, the messages used to communicate on these ingredients is extremely important. “People want to be informed and they want factual information,” she says. The very matter of fact indication “Insect-fed” apparently tested the most positively. “I think the approach we’ve taken to really position the end products with the end consumer has a big influence on how our customers see us and work with us. They really see that we’re trying to make this a success story for everyone.”

Within the industry, the concept of insect protein has several selling points—it is an easily digestible feed ingredient for aquatic species which avoids putting further stress on limited marine resources, it offers routes to avoid the issue of toxin bioaccumulation which can be observed in fish, it has a low physical footprint and offers greater feed conversion ratios than other animal sources of protein, it helps meet political leaders’ goals of achieving independence from foreign protein sources and of bringing production jobs to rural areas. InnovaFeed has pushed itself even further on the questions of social and environmental responsibility, eschewing GMO insects and feed and embracing the most “natural” options wherever possible—for example, processing insects using solely mechanical means. However, these advantages come at a cost—although Ms. Walraven remains coy about InnovaFeed’s price, it is understood that insect meal is not yet competitive in terms of price with fishmeal.

Instead, in Ms. Walraven’s words, with its customers as well as with its suppliers, InnovaFeed’s tactic is to make sure that insect protein’s unique qualities can be leveraged into a better product for everyone in the supply chain. The launch late last year of insect-fed trout in French supermarkets emblemized this effort; the communication around the launch involved InnovaFeed as the supplier of the insects, Skretting which made the feed, the trout farmer, and the French retailer Auchan which was selling it (“Auchan really believed in the project from the very start,” she recounts). “Our take on it is: can we create value for everybody that we are collaborating with, down to the final consumer, in creating a product that is sustainability and has a high level of quality? Our approach is very much to try and create partnerships. We think there’s a lot to be gained from being a first mover on this segment, for everyone, not only for us but for our customers and the fish farmers.”

By |2019-01-29T08:07:10+00:00January 29th, 2019|