The Insect Farming Industry: After the Hype, Real Business Emerges

The insect farming industry has experienced a dramatic journey over the past decade, underlined by the big, bad news from some of the biggest and most well-known players in the industry in the past few months. Money is tight and bankruptcy lurks around the corner for companies such as Ynsect (France), Enorm (Denmark) and perhaps many others as well. But is it game over for the insect farming industry or is it just getting started?

Once touted as a revolutionary solution for global food security and sustainability, the sector was swept up in a wave of hype that, in many ways, set unrealistic expectations and led to notable setbacks. However, as dust settles, the industry is currently entering a more mature, business-focused phase, where realistic and acute opportunities and profitability are at the very core.

Is the wave of bad news from the big players over? Hardly, but at the same time many of the second wave companies and smaller players are making the change for better happen day by day and profitability is the key, no matter what the production size is. Sexy enough for VCs and other investors? Depends on who you ask.

From Hype to Reality – Will edible insects ever become a big thing?

In the early 2010s and all the way up to the 2020s, edible insects captured headlines as the next big thing in sustainable protein production. Reports from organizations like the FAO highlighted edible insects’ potential to feed a growing global population with minimal environmental impact, even turning the environmental clock back. Startups proliferated, and investors poured in millions and billions of dollars capital, hoping to ride the crest of this new food wave.

But the hype came with pitfalls. Many high-profile edible insect companies, such as Chapul Farms in Oregon (USA) and Bitty Foods, either pivoted away from direct human food or closed their doors for good (RIP Bitty Foods). Chapul has seen significant success selling BSF frass and feed since its pivot to animal feed.

Consumer adoption, especially in the Western markets, proved slower than anticipated. Surveys show only a minority of Americans and Europeans are willing to eat insects, and edible insect products remain rare on grocery shelves. The legal and regulatory landscape also lagged, adding further friction to market growth.

Even if edible insects may never become a mainstream thing, the success of insect farming industry isn’t depending on it – on the contrary, using insects for feed is the much bigger opportunity, but not without problems of its own.

Business as Usual: A Maturing Industry

Despite the cooling of initial excitement, the fundamentals of the insect farming industry remain strong. The market for insect protein was valued at nearly $500 million in 2023 and is projected to grow 15-30% CAGR all the way up to 2030, driven by demand for sustainable, eco-friendly protein in animal feed, as a pet food ingredient, and emerging niche use cases.(Note: reliable up-to-date research is missing taking into account the current global political and economical situation)

Key factors behind the expected growth include:

• Sustainability: Insects require less land, water, and (costly) feed than traditional livestock, making them attractive for environmentally conscious producers and consumers. That said, insect farmers shouldn’t expect customers to pay sustainability premio and business cases should definitely not depend on that, insect protein and other insect-based products need to be price competitive with existing alternative options (namely soy and fishmeal in feed).

• Technological Advancements: Improved breeding techniques, the use of existing production facilities, climatization technology, and de-centralized production models are reducing costs and increasing production efficiency while making insect farming more affordable and more widely available, thus enabling also better business and use cases.

• Regulatory Progress: Africa, Asia and South America are the most favorable regions to insect products and the use of various organic waste sources as insect feed (i.e. the substrate). Europe is trying to change its regulatory landscape to more insect-friendly, with the U.S. following suit, enabling broader market access for insect-based products. However, the legislative landscape differs significantly from country to country and affects the business cases as well.

And most importantly

• Profitable Business Models and Success Stories: The industry is now characterized by a shift from hype-driven ventures to scalable, profit-oriented operations. The expectations are becoming more realistic, the hype-driven billion dollar valuations are by-gone and the focus is more on traditional animal farming and agricultural business models rather than having patented hi-tech technology per se.

Opportunities Emerge

With the biggest hype phase behind, the insect industry is now fast becoming a landscape of real, tangible business opportunities:

• Animal Feed: Insect protein is slowly but surely becoming more competitive with soy, especially as production methods have improved and CAPEX costs have come down with emerging de-centralized production models, while the price, accessibility and sustainability concerns rise for traditional feed ingredients, and the U.S. driven tariff wars make soy availability a significant concern globally. Don’t get us even started with the issues related to deforestation…

• Aquaculture: Insect protein is not yet competitive with fishmeal price-wise, but fish health and sustainability driven fish farmers are considering insect protein as a real option, and the over-fishing of seas raises all the time bigger concerns and need to find alternative aquafeed sources. If the use case allows the insects to be produced locally with excess (=free) biowaste and the insects (e.g. BSF larvae) are fed to the fish live, it does create an interesting business case as well. Did you know farmed shrimp also like insects such as BSF larvae?

One of the most promising BSF-aquafeed producers comes from Bhubaneswar, India, where Insectika Biotech is using a modular, de-centralized production model with great success and is expanding its operations fast after the launch of their novel aquafeed in February 2025.

• Pet Food: Pet owners are seeking sustainable, hypoallergenic protein sources, creating a fast-growing market for insect-based pet foods. There are already major pet food manufacturers with insect-based products on the market and with good response from the consumers. Insect protein in many cases is a healthier and more natural protein source for pets than soy protein. The problems with insect protein price, production capacity and availability still burden many potential pet food cases.

Exotic pets such as lizards, certain spiders, exotic birds and aquarium fish… definitely interesting opportunities for premium quality, premium priced insect protein snacks or even live insects as pet food. Jiminy’s (USA) and Yora (UK) are among the top tier pet food manufacturers already selling a variety of insect-based pet foods.

• Waste Upcycling: Companies like Meruoca in Sao Paulo (Brazil) and Goterra in Canberra (Australia) use insects to convert organic waste into valuable proteins and fertilizers, tapping into both sustainability and circular economy trends. Getting paid to use certain type of waste to produce your actual insect protein product and additionally getting fertilizer as a side product to further commercialize… Sounds like a case of win-win-win.

A side note: getting paid to upcycle waste is a viable business case in many regions, but sometimes there is a lot of competition for the waste and then again sometimes you get it for free (but not get paid), but all the same, as long as you don’t have to pay for it or have big costs for transporting it into your production facility, it does help the business case a lot. Gone are the times when someone was feeding the insects with actual chicken feed to produce chicken feed! Crazy times!

• Diversified Revenue Streams: Beyond protein, insect farming yields oils, fertilizers, and even ingredients for plastics, cosmetics and pharmaceuticals. In many cases the market is not quite there yet, the production costs or technical methods are still not quite ready for big time commercialization, but there is a definite and growing interest for insect-based ingredients for various other use cases, frass being the one already in place and may even be the main revenue model for some insect farmers.

• Insect Farming tech and services: Insect Farming has so far been a niche industry with only a small number of technology providers and a very small number of people or companies that are willing to spend big bucks on the farming equipment, tools, climatization technology or pre- and post-processing equipment. That said, Manna Insect (Finland) has already sold its Manna MIND climatization technology to over 40 countries and to almost 100 insect production units.

There is not yet a multi-billion dollar business opportunity in insect tech as such, but there is definitely potential with the huge interest the industry is facing. Similarly there is a clear and present need to insect farming training and services, that is yet to be catered. There are players already out there servicing the need, but the big opportunity is just emerging once the industry matures further.

Interestingly, Insect Farm Hub is the first and probably only digital hub for insect farmers to learn and to sell and buy insect farming related products, tools, technologies and services, that operates as a stand-alone service outside of social media groups.

The Road Ahead

The insect industry has weathered its initial hype and is emerging hopefully stronger, definitely less head in the clouds, with a clearer focus on scalable, profitable, and sustainable business models. While the days of splashy headlines and overblown expectations are gone, the sector is delivering real value—and the business opportunities are only growing.

For entrepreneurs and investors, the message is clear: the time for hype is over, but the time for profitable business is just emerging.

The hype phase may have led to some disappointments, but it also forced the industry to mature. Insect farming is no longer a speculative bet—it’s a real sector with real revenue streams. Traditional business models from the animal farming industry are taking over tech-driven factory-size business cases and de-centralized production models seem to be emerging on the top of the crop – just like with e.g. meat or dairy production. Perhaps the insect farming industry will soon be seen more as a natural part of agriculture and its various support models come into play with insects as well.

For entrepreneurs and investors alike, the key is focusing on markets that already work (feed, pet food, waste recycling, fertilizers) rather than waiting for a cultural shift in human diets or rising prices or other feed ingredients.

The companies that succeed will be those that treat insect protein as a business opportunity, not as a revolution of any kind.

There are thousands or perhaps even tens of thousands of insect farms and farmers out there right now – mostly individual farmers in the developing countries – but the global and growing interest towards the industry is easy to see in Facebook Groups and other social media groups, searches, discussions and content, where hundreds of thousands or even millions of people are interested in learning more about insect farming and insect products. And we’re here to answer that call.

The bottom line? The insect farming industry isn’t dead, it’s just getting started!