This series provides insights into the global array of companies participating in this challenge as innovators or sponsors.
The 5th of this Spotlight Series focuses on Genufeed, one of the eight innovation finalists of this program. In the coming weeks leading to the grand Finale on the 7th of October, we will profile the other innovations and sponsors of this challenge.
Disrupting Disruption in the Nascent Insect Industry
Insect makers have raised hundreds of millions of dollars from venture capital to disrupt the global aquaculture feed industry.
(Tel Aviv, Israel) The salmon industry, among others, still relies on fishmeal, a powder obtained from cooking pelagic fish to obtain adequate amino acid profiles that mimic the diet of wild salmon. And although there are sustainably certified forage fish fisheries, many industry experts are of the opinion that aquaculture can never be truly sustainable by grinding up wild-caught fish to grow farmed species.
Israeli biotech company Genufeed plans to disrupt the disruption that insect farmers embody. Instead of making insect meal a like-for-like replacement for fishmeal in extruded fish feed, Genufeed plans to redesign the entire aquafeed production process.
The company will sell an enrichment formula that contains amino acids deficient in insect larvae, omega-3 rich algal oil, vitamins, minerals, and can also include astaxanthin. The formula coats whole or chopped dried insect larvae to reach an optimal fish diet that contains everything that fish need for robust growth and health. Insect farmers can sell the coated larvae as an independent fish feed that completely eliminates the need for the traditional feed extrusion process.
“We’re specifically targeting the carnivorous fish feed market that contains more animal protein, and it’s more expensive feed,” chief executive officer Yair Fecher said. “We would like to present a new way to use insects in aquafeed, an economically feasible and modular way.”
Fecher’s journey into aquaculture started a few years ago when he got involved in an aquaculture project in Georgia as part of an Israeli investment fund. He worked at several investment companies after graduating with an MBA in international business and finance from Canada’s York University in 2008.
What caught Fecher’s eye when researching the aquaculture industry was the high cost of setting up a fish feed extrusion facility. Feed is the aquaculture industry’s highest input cost and can represent well over half of the cost of goods sold. Having to reach an economic breakeven point of at least 20,000 tons of feed sales per year, setting up a feed plant in the Caucasus region to make extruded feed was excessively expensive and held back the growth of the industry.
Since then, a group of start-ups have raised hundreds of millions of venture capital dollars to build massive insect factories processing mealworms and the black soldier fly larvae to create an amino acid rich protein that is almost a straight substitute for fishmeal in aquafeeds.
France-based Ynsect raised $372 million in a Series C round last year that included an investment from Hollywood star Robert Downey Junior. Innovafeed, also from France, announced in 2020 it will build a major new insect farm in Illinois with agriculture giant Archer-Daniels-Midland (ADM).
Fecher’s initial hypothesis that extrusion is prohibitively expensive for some aquaculture sectors, led him to believe that there must be an alternative method. While learning about the aquafeed industry, he became aware of insect protein as an up-and-coming sustainable alternative. Rendering insect protein meal from insect larvae creates a product that can cost between EUR2,000 to EUR4,000 a metric ton, or more than twice the cost of Peruvian aquaculture grade fishmeal obtained from anchovies. That’s the business model currently employed by insect farming companies.
“However, many fish species such as Rainbow Trout are natural insectivores, feeding on insects in nature. I thought, why don’t we make sure that farmed fish consume enriched whole insect larvae that accurately fulfill their nutritional needs” says Fecher.
In the Trout lab at Kibbutz Dan, Northern Israel
With that idea in mind, Fecher contacted Dr. Avshalom Hurvitz, an award-winning marine biology scientist and an experienced trout and sturgeon farmer. The two started experimenting with different formulations in Hurvitz’s Rainbow Trout lab at Kibbutz Dan in Northern Israel. After a series of biochemical iterations, Genufeed reached a product that demonstrated better performance than fishmeal-based extruded feed. With Genufeed’s enriched larvae, Trout grew faster and gained more weight. The Genufeed-treated fish groups also had fewer cases of mortalities, thanks to the natural immune system boosting characteristics of insects.
“Trout fed with Genufeed’s whole enriched larvae, grew faster and gained more weight”. Genufeed’s formulation can include Astaxanthin, giving Trout and Salmon their characteristic fillet pigmentation.
Genufeed wants to help insect farmers derive more value from their harvested larvae by shortening the way to a complete insect-based fish feed. Enabling insect producers to sell their harvested dried larvae whole, containing both protein and fat, without rendering, will help them increase their profits.
"Genufeed is looking to roll out its patent-pending technology, especially in developing countries", Fecher said. "The startup joined the Global Aquaculture Challenge to use The Yield Lab Asia Pacific's network to reach out to potential customers and forge collaborations."
“Latin American countries such as Colombia and Peru that are experiencing accelerated growth of their aquaculture industries are of significant interest to Genufeed. Genufeed is also looking at opportunities in Africa and Asian countries with a tropical climate and abundant organic byproducts that can be used as feed substrates for insects. These factors can make insect farming more profitable.“
13 Aug 2021.
Matt Craze and Oriana Aguillon, Spheric Research.