Originally posted on forbes.com
“It is widely accepted that by 2050 the world will host 9 billion people. To accommodate this number, current food production will need to almost double.” So begins the 200-page United Nations Food and Agriculture Organization report from 2013 that advocates eating insects as an end run around a looming food crisis. When a handful of Western entrepreneurs read it, they sensed an opportunity.
Since then, startups in the U.S. and Canada have demonstrated that people can overcome their squeamishness and be persuaded to eat bugs such as crickets, lured by their high protein and low environmental impact. (In other parts of the world, of course, dining on insects is an accepted custom.) Exo, one of the leading makers of cricket-flour protein bars, announced in March that it had closed a $4 million round of Series A funding. The company, which I wrote about last year, will use the investment in part to increase production and expand its product line.
Chapul, another cricket-bar maker, recently moved into national distribution, selling products with flavors like Aztec (dark chocolate) and Thai (coconut, ginger and lime) in nearly 1,000 retail locations, including chains such as Sprouts and Publix. Chapul, which was featured on Shark Tank in 2014 — earning an investment from Mark Cuban — recently won a grant from the state of Utah to industrialize its process for making cricket flour.
It’s premature to say that eating crickets has gone mainstream, but the idea has lost its shock value. “For cricket farmers who were using their job as a pickup line, it’s not working anymore because it’s not as sexy,” jokes Mohammed Ashour, chief executive of Aspire Food Group, which sells cricket flour and whole crickets.
As the edible-bug industry has matured, here’s what its pioneers have learned about challenging cultural taboos and developing a new market.
1. Establish a community.
When Meryl Natow and her co-founders launched Six Foods in 2013, there was little guidance from the U.S. Food and Drug Administration or state health departments for companies that wanted to sell insect-based products for people to eat. The government was more interested in keeping bugs out of the food supply than adding them in.
To get their products approved, bug-based companies had to work together to help regulators understand their goals. With clearer guidelines in place, more businesses are now willing to farm crickets, which should drive down costs — currently one of the biggest barriers to getting more farmers to raise and eat crickets.
Faced with daunting regulations, Julia Plevin and Lucy Knops decided to partner with a San Francisco distillery to get help developing Critter Bitters, a product that includes toasted crickets. They raised about $25,000 on Kickstarter, but they haven’t been able to fulfill their orders because they’ve been waiting for months for approval from the U.S. Alcohol and Tobacco Tax and Trade Bureau. “Speaking to other people in the industry, we knew this could be a long and tedious process,” Knops says. “It’s difficult enough when you’re just getting a bitters recipe or formula approved — when you add edible insects, it complicates it further.”
Most entomophagy (that’s “the practice of eating insects”) startups are willing to share their knowledge. “For now, we all have to work together,” says Ashour, whose Aspire Food Group won the $1 million Hult Prize in 2013.
At the end of May, startup founders, food scientists and nutrition experts will meet in Detroit for what’s billed as the first conference dedicated to edible insects in the U.S.
2. Build on what’s familiar.
Natow, of Six Foods, said it was important to have the company’s first product be in the form of a familiar chip. She doesn’t try to get every person she meets to become a bug-eating evangelist. “Kids are far more willing to eat our products than adults,” she says. In Bozeman, Montana, the public library recently held a birthday party for its pet gecko. While the gecko ate its usual meal of crickets, the local kids happily ate Chirps Chips — but their parents were reluctant to try them.
“That’s OK,” Natow says. “The kids are the ones who are going to be around long enough to see this change in the way we eat.”
Similarly, Alex Drysdale, founder of Crik Nutrition, created a cricket-based protein powder for athletes who were already used to buying supplements.
“This product lends itself to a health-conscious consumer,” says Drysdale, whose powder contains 20 grams of protein per serving. “I’ve been doing a bunch of CrossFit gyms lately, and over 50% of the people end up buying it.”
3. Find opportunities at every stage.
The space for cricket-based food is quickly gaining ground, so now entrepreneurs are looking to develop businesses around the supply chain.
“How do we build a farm that will generate enough revenue from producing insects, so that a typical U.S. farmer can run it and support their family?” asks Daniel Imrie-Situnayake, chief executive of Tiny Farms.
Tiny Farms, which raised a seed round of funding earlier this year from a group of investors, aims to produce tools and technology that will allow farmers to meet the rising demand for crickets. “We’re in a similar role to a company like Tyson in the poultry industry,” Imrie-Situnayake suggests. The company’s model farm in San Leandro, California, recently had its first harvest of crickets.
The typical model of raising crickets for pet feed is labor-intensive, Imrie-Situnayake explains. A warehouse contains shelves with boxes of crickets, and someone has to walk around to provide food and water. “You’re pretty much operating with the same efficiency as backyard chickens,” he says.
The Tiny Farms prototype, by contrast, resembles a high-tech research lab, with a sterile steel-and-plastic roof and an airlock for entry. The air inside is scrubbed to keep out vehicle exhaust and pesticides, and the interior is heated to a constant 88 degrees Fahrenheit. The goal is to establish automated systems that are cheaper and less time-consuming to operate. “To make an impact, you have to fundamentally rethink things,” Imrie-Situnayake says.
Jarrod Goldin, president of Entomo Farms, which has supplied crickets to Exo, Chapul and other food companies, also sees potential in a byproduct of cricket farming. Entomo Farms recently launched a derivative company to sell frass, the technical term for insect poop. “It’s amazing fertilizer,” says Goldin, whose company raises crickets in 60,000 square feet of space and expects to be closer to 100,000 square feet by the end of the year. Frass, he says, “triggers plants to bud, and it keeps off unwanted pests. It can be used in places where a traditional synthetic fertilizer can’t be used, like a cottage next to a lake. Everybody from the medical marijuana growers to the organic mushroom growers is interested.”
When you’re working on the frontier of an industry, it isn’t easy to predict how opportunities will evolve. The notion of the lone genius doesn’t apply here. Cultivating new markets requires collaboration and a willingness to challenge conventions.
Find out more about CHIRPS at Sixfoods.com