THE RACE TO FEED IN­SECTS TO LIVE­STOCK, HOUSE PETS — AND PEO­PLE.

National Post (National Edition) - - FRONT PAGE - MARY BAX­TER

For Jar­rod Goldin, a re­port about ed­i­ble in­sects four years ago had the per­spec­tive al­ter­ing im­pact equiv­a­lent to Neil Arm­strong set­ting foot on the moon.

A 2013 Food and Agri­cul­ture Or­ga­ni­za­tion of the United Na­tions doc­u­ment sug­gested eat­ing bugs — crick­ets, meal­worms and black sol­dier fly lar­vae — could fill the world’s grow­ing num­ber of rum­bling bel­lies with­out tax­ing an al­readys­trained en­vi­ron­ment.

Yet it would take an episode of the pop­u­lar U.S. re­al­ity tele­vi­sion show Shark Tank for Goldin, a chi­ro­prac­tor in Rich­mond Hill, Ont., to re­al­ize how well-po­si­tioned he was to take on the task of bring­ing in­sects to mar­ket.

Dur­ing the episode that aired around the same time he read the UN re­port, a con­tes­tant who made cricket pro­tein bars scored back­ing from one of the show’s celebrity in­vestors.

It was Goldin’s “aha” mo­ment. His broth­ers al­ready grew bugs for their na­tional rep­tile feed busi­ness, so he called them with a pro­posal: “Why don’t we raise some money and start North Amer­ica’s first hu­man-grade in­sect farm?”

Not so long ago, in­sect farm­ing oc­cu­pied the land of the quirky and per­haps even the shady, given the $1-bil­lion Ponzi scheme by China’s Yil­ishen Tianxi Group that bilked more than one mil­lion in­vestors over an eight-year pe­riod un­til its col­lapse in 2007. The group promised farm­ers a 30-per-cent re­turn on the ants they grew, sup­pos­edly to make a pow­dered ant cure-all.

Now, ven­tures in Canada, the United States, Europe, South Africa, China and Malaysia are vy­ing to pro­duce the large, sus­tained vol­ume needed to gen­er­ate real prof­its from sell­ing in­sects as food for live­stock, farmed fish and peo­ple.

“There’s lots and lots of in­ter­est and a lot of peo­ple in­vest­ing mil­lions if not bil­lions of dol­lars in these ef­forts,” said Do­minique Bu­reau, a Uni­ver­sity of Guelph pro­fes­sor who spe­cial­izes in fish nu­tri­tion.

One such ven­ture is run by the Goldin broth­ers, who in 2014 es­tab­lished Next Mil­len­nium Farms and started grow­ing crick­ets in a 5,000-square-feet ware­house in Camp­bell­ford, Ont. That fa­cil­ity soon proved to be too small so they moved to their cur­rent lo­ca­tion — three for­mer chicken barns, each 20,000 square feet, in Nor­wood, Ont., near Peter­bor­ough — and changed the busi­ness’ name to En­tomo Farms.

In­sect farm­ing’s ap­peal hinges on its prom­ise to solve a num­ber of eco­log­i­cal co­nun­drums, such as re­turn­ing bil­lions of dol­lars worth of wasted food back into the food chain by hav­ing in­sects eat it and then be­come a food source. Re­searchers also see in­sect pro­tein as a par­tial feed al­ter­na­tive for farmed fish since the wild fish stocks that make up fish meal are rapidly dwin­dling.

That in­sects use far less wa­ter (and space) than cows and are ef­fi­cient at con­vert­ing their feed into weight gain are yet more rea­sons why both en­vi­ron­men­tal­ists and en­trepreneurs look­ing for healthy profit mar­gins gaze favourably on in­sect farm­ing. A 2017 Re­search and Mar­kets re­port es­ti­mates the new sec­tor will earn more than US$1.07 bil­lion in rev­enues by 2022.

The prom­ise is there, but progress is slow. For in­stance, Lan­g­ley, B.C.-based En­terra Feed Corp., in­cor­po­rated in 2007, only re­cently got the nec­es­sary Cana­dian ap­provals to sell black sol­dier fly lar­vae as a feed in­gre­di­ent for farmed fish and broiler chick­ens. (U.S. ap­provals to sell the lar­vae as a feed in­gre­di­ent came last year)

“We spent the first cou­ple of years eval­u­at­ing dif­fer­ent in­sect species, how to grow them and that kind of thing; we spent some time in re­search and de­vel­op­ment and we opened a demon­stra­tion plant in 2012,” said Vic­to­ria Le­ung, man­ager of mar­ket­ing and op­er­a­tions at En­terra, which opened a com­mer­cial fa­cil­ity in 2014.

The com­pany val­ues its in­tel­lec­tual prop­erty to be within the $50- to $60-mil­lion range, said Keith Driver, ex­ec­u­tive vice-pres­i­dent. “Luck­ily, we’ve got there spend­ing not quite half of that.”

En­terra main­tains nearly one bil­lion flies or lar­vae in its Lan­g­ley fa­cil­ity at any given time, though it won’t di­vulge how much prod­uct comes out of it.

“Right now though, I would say we’re pro­duc­ing com­mer­cial lev­els of prod­uct at this stage and we’re look­ing to move to hun­dreds of tonnes a month at our next fa­cil­ity,” Driver said.

Feed­ing the in­sects was one of En­terra’s big­ger chal­lenges. Fly lar­vae may thrive on or­ganic waste, but con­tam­i­nants such as diox­ins and heavy met­als can hitch a ride on some forms of waste, ac­cu­mu­late in in­sect sys­tems and pose the risk of mov­ing fur­ther down the food chain.

“We could show you a laun­dry list of things that have come in un­ex­pect­edly that we’ve had to then screen out,” Driver said.

The com­pany has in­tro­duced rig­or­ous screen­ing pro­to­cols for its feed­stock and also shifted to­wards a high­erqual­ity feed­stock to es­tab­lish con­sis­tency in both pro­duc­tion and the end prod­uct.

Along with ob­tain­ing or­ganic waste from places such as gro­cery stores, En­terra sources feed­stock such as dis­tillers’ grains and grain pro­cess­ing residues from agri­cul­ture and food pro­ces­sors.

The com­pany started the pa­per­work to ob­tain ap­proval to sell in­sects as feed for fish and live­stock for its Lan­g­ley plant five years ago — well be­fore the plant was built.

Ac­cord­ing to a Cana­dian Food In­spec­tion Agency (CFIA) spokesman, com­pa­nies have to demon­strate sev­eral things to get ap­proved: they must iden­tify any haz­ards in the pro­duc­tion sys­tem and mit­i­gate them, prove the feed pro­duced pro­vides a pur­pose, and, fi­nally, show that an­i­mals fed the prod­uct per­form as well as on a tra­di­tional diet.

Now that En­terra has trial in­for­ma­tion in hand, qual­ity screen­ing sys­tems in place and se­cured ap­pro­pri­ate food sources, ap­provals for fu­ture plants in Canada — two of which are un­der de­vel­op­ment — should not take as long.

Sim­i­lar reg­u­la­tory ap­proval is not needed for for­mu­lat­ing pet food made with in­sects.

“We don’t reg­u­late pet food in that way in Canada,” said David John­son, CFIA chief of risk pro­fil­ing.

At the Goldins’ En­tomo Farms where they grow crick­ets and meal­worms for peo­ple and pets to eat, ob­tain­ing govern­ment per­mis­sions to sell crick­ets for hu­man con­sump­tion was far more straight­for­ward.

That’s be­cause fed­eral food safety leg­is­la­tion al­ready al­lows for the pres­ence of in­sects in food as a by-prod­uct of food pro­cess­ing and the fam­ily was al­ready feed­ing their crit­ters a grain mix­ture sim­i­lar to chicken feed.

Midgard In­sect Farm Inc. in An­napo­lis Val­ley, N.S., also sells bugs for pet food mak­ers in­clud­ing Dane Creek Cap­i­tal Corp., which took a 48-per­cent stake in the com­pany in 2016.

Mis­sis­sauga, Ont.-based Dane Creek makes Dock­side brand sus­tain­able pet foods at its Nova Sco­tia fa­cil­ity, giv­ing Midgard a se­cure mar­ket while it scales up.

Goldin said En­tomo cur­rently has the ca­pac­ity to gen­er­ate roughly 13.5 tonnes of raw in­sects a month, although it’s not yet pro­duc­ing at max­i­mum ca­pac­ity.

The amount is roughly equiv­a­lent to 30,000 113-gram bags of pow­dered crick­ets, which the com­pany sells for $12.38 on its web­site.

En­tomo is near­ing break even, Goldin said, but the fo­cus is on growth. It is in the process of ob­tain­ing two more for­mer barns and talking to ven­ture-cap­i­tal firms and strate­gic in­vestors such as food com­pa­nies about fi­nanc­ing the scale up.

“We are look­ing at mod­el­ling out, op­er­at­ing ev­ery­where from the West Coast of Canada to cer­tain parts of the United States, Mex­ico, Costa Rica, Do­mini­can Repub­lic,” Goldin said. “We want to be the big­gest in­sect farm com­pany in the world.”

But be­ing the big­gest is not a guar­an­tee of suc­cess. In­sect pro­teins face stiff com­pe­ti­tion in the aqua­cul­ture feed mar­ket from other forms of al­ter­nate pro­tein sources un­der de­vel­op­ment, such as pro­tein iso­lates and mi­cro­bial biomass. And many claims about the nu­tri­tional ben­e­fits need fur­ther re­search.

“It’s an okay (feed) in­gre­di­ent, how­ever, to me it’s noth­ing re­ally to write home about,” said Guelph pro­fes­sor Bu­reau.

Brad Hicks, a part­ner at Taplow Ven­tures, which man­u­fac­tures pet food and aqua­cul­ture feed, said in­sect pro­tein is cur­rently a “craft nov­elty prod­uct,” but it holds prom­ise as a com­mod­ity.

Ear­lier this year, Taplow Ven­tures be­gan mar­ket­ing a pet food prod­uct that uses in­sect in­gre­di­ents from En­terra. Com­pany of­fi­cials had wor­ried the in­gre­di­ent would be a con­sumer turnoff, but found it didn’t af­fect sales.

The com­pany also in­cludes in­sects as an in­gre­di­ent in spe­cialty feeds it makes for fish and chick­ens. The feed is cur­rently too ex­pen­sive for large-scale chicken op­er­a­tions, but back­yard chicken pro­duc­ers are will­ing to pay ex­tra for it, Hicks said.

Economists such as John Cran­field, chair of the Uni­ver­sity of Guelph depart­ment of Food, Agri­cul­ture and Re­source Eco­nom­ics, and Syl­vain Charlebois, dean of Dal­housie Uni­ver­sity Rowe School of Busi­ness, say the yuck fac­tor of in­sect pro­tein will prob­a­bly rel­e­gate it to niche mar­kets for a long while yet.

Charlebois pre­dicts widescale ac­cep­tance would come first in places such as Europe, where the shift to veg­e­tar­ian di­ets is well un­der­way, and the Far East, where some cul­tures al­ready in­clude in­sects in their diet.

Nev­er­the­less, Goldin main­tains con­sumer ac­cep­tance in Canada will come sooner rather than later.

Re­cently, En­tomo ne­go­ti­ated a deal to launch a prod­uct un­der the Pres­i­dent’s Choice brand that will be shipped to 300 Loblaw stores. The startup food pro­ces­sors they be­gan sell­ing cricket meal to three years ago are thriv­ing. And this year, af­ter restau­rants across On­tario added crick­ets to their menus for Earth Day, some never took them off.

“We have just grow­ing de­mand from mul­ti­ple sec­tors,” Goldin said.

AN­DREW NGUYEN / NA­TIONAL POST

Dar­ren Goldin with a cricket condo at En­tomo Farms in Nor­wood, Ont., where they grow crick­ets and meal­worms for peo­ple and pets to eat.

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