In 2025, the European Commission will adopt a new EU Startup and Scaleup Strategy. Startups, research, and innovation have been placed among the key priorities of the Commission’s current mandate, aiming to close the innovation gap between the EU and its global competitors and boost European competitiveness. Originally developed in 2016, the updated strategy is set to be more ambitious, supporting startups seen as catalysts for innovation and contributors to tackling challenges like climate change, strengthening domestic protein production, and driving the reindustrialization of Europe.
The insect industry has emerged as one of the fastest-growing sectors among industrial startups in Europe. With over 150 production facilities, mostly SMEs and startups, across the continent, the new strategy will directly impact an industry at a critical scaling-up phase. The International Platform of Insects for Food and Feed (IPIFF) participated in the public consultation on the strategy, submitting recommendations to the Commission.
"The European insect industry stands at a crossroads, facing challenges such as re-localizing protein production and reducing dependency on resource-intensive traditional proteins like soybean meal and fishmeal,” said Christophe Derrien, Secretary-General of IPIFF, in a recent interview with Aquafeed.com. “The insect sector has been the fastest-scaling among innovative industries, outperforming algae and other alternative protein sources. However, we've reached a critical threshold where we must scale further and mature to meet market demands effectively.”
Competitiveness and regulatory reforms
Over the past decade, the industry has achieved significant regulatory milestones, such as the authorization of insect protein in aquafeed since 2017. However, IPIFF is advocating for additional reforms, including the approval of frass (insect manure) as fertilizer, a change that would significantly enhance the sector’s competitiveness.
Input costs remain one of the highest burdens for insect producers. IPIFF is also pushing to broaden the types of substrates that operators can use to feed insects. "To fully unlock the circular potential of our sector, we are calling for the use of former foodstuffs—such as expired or discarded products from supermarkets and the agri-food industry—even if they contain traces of meat or fish," Derrien explained. "Scientific studies support the safety of this approach, and we expect regulatory changes within the next two years."
On whether different substrates would impact product consistency, especially critical for aquafeed manufacturers, Derrien clarified that "the aim of using supermarket leftovers containing meat or fish is to broaden biomass streams without compromising consistency. Insect meal quality would remain stable."
“Considering the frass and substrate situation, the competitiveness of our sector is being hindered. On the one hand, the input costs, which represent between 50-60% of the total costs of the production, are still relatively high, as they are competing with other substrate providers to get access to those materials. On the other hand, if companies were able to valorize efficiently all the products and co-products, including the frass, they would be able to provide a more competitive price,” Derrien explained.
Catalyzing financial mechanisms
A second major challenge is the need for financial tools to support sector growth and scaling.
"In recent years, investment flows have dropped significantly, especially toward capital-intensive sectors like insects. Investors often expect short-term returns, which are difficult for a sector that requires time to achieve commercial scale and profitability," Derrien said. “European institutions and investors may have underestimated the time needed to develop a new industry, and, at the same time, some investors were not directly connected with the realities of agri-food production and the challenges in developing industrial projects.”
However, not all operators are exposed to the same extent to those financial difficulties. “Operators that have built their facilities at difficult times with high inflation rates, construction materials and energy costs have been impacted more than other operators who may have started those operations a bit later or who decided to scale at different phases. Similarly, there are also emerging operators that are covering only one part of the value chain and they also have not been exposed at the same level,” Derrien explained.
IPIFF is advocating for tailored financial mechanisms through institutional stakeholders like the European Investment Bank to provide funds, banking guarantees, and restore investor confidence. “This combination of public-private collaboration is key to supporting the development and for scaling our sector,” Derrien said. “Greater involvement from public authorities through innovative financial mechanisms will help the sector achieve the scale necessary for long-term viability.”
IPIFF also pleads for the establishment of a set of policies or policy frameworks, accompanied with adequate financial support measures, to stimulate the insect industry, such as recognizing the insect sector of part of the EU Protein strategy, setting incentive measures under the future EU Common Agricultural Policy and recognizing the insect sector as a part of the EU Industrial policy.
Promoting demand
Consumers are a key element not only for insect-fed animal protein but also for specialized markets for direct insect protein consumption. “For these markets, we are not necessarily aiming at producing products that will replace meat and fish, rather than provide additional complementary solutions to specialized market, to certain categories of populations who might, for instance, be willing to reduce their consumption of meat, certain categories of consumers who have nutrient deficiencies, or other that require additional sources of proteins such as bodybuilding,” Derrien said.
In these specialized markets, the level of acceptance varies with age, education, etc., and to increase demand, it’s key to communicate appropriately about the nutritional benefits, their environmental credentials, and inform about the safety and regulatory aspects. Food legislation and authorizations are also key to making these products available to consumers.
IPIFF is suggesting that EU policymakers should be empowered to provide the incentives or information tools for European end consumers (food) and business customers (feed) to prioritize the use and consumption of insects and its derived products, such as public procurement directives compeling certain operators to use a minimum percentage of sustainable sources of proteins either directly for human consumption or in the feed of the animals.
Additionally, IPIFF also pleads for the establishment of compulsory labelling provisions, allowing European consumers to identify the origin of the produced animal in insect food products and inform them about the sustainability credentials when compared to products produced overseas.
The future
In the coming years, Derrien forecasts a shift in the EU landscape, from a broad range of startups to a smaller number of industrial-scale producers. "We’re seeing new collaboration models emerge with decentralized approaches involving traditional agri-food players and regional networks," Derrien predicted.
To support this evolution, financial incentives and mechanisms tailored to farmers and agri-food stakeholders will be needed. "Training programs for farmers, support for diversification into insect production, and the inclusion of insects in agricultural policy frameworks will be crucial," he said.
"Innovation in financial incentives and legislation is essential to enable the development of a more sustainable food system. Our sector provides real solutions to traditional agriculture, helping drive sustainability," Derrien concluded.
