From Soy to Fly: The Next Generation of Animal Feed in ASEAN

The livestock and aquaculture industries across ASEAN are keeping pace with the demand for animal and fish proteins that continues to rise as more consumers enter the middle class and eat more protein. With animal feed representing 60-70% of production costs, the continued instability of input prices, and the need to enhance the sustainability of agriculture, start-ups are looking to disrupt the soy-based animal feed proteins with novel insect proteins.

Black Soldier Fly (BSF) larvae are seen as being the leading insect protein to disrupt soy in feed. BSF larvae are rich in protein, amino acids, and fatty acids and are suitable as a feed for chicken, swine, fish, and prawn, among others. Protein contents are comparable to soybean with BSF containing 33-63% proteins while soybeans include 36-56%, depending on the study. Larvae are also produced sustainably and require less land for conversion than soybean and, with limited regulatory interference, more than 20 companies have entered markets across ASEAN to provide alternative proteins to farmers across agriculture verticals.

Key Insect Proteins Players in ASEAN

The BSF market in ASEAN is starting from a low base. There are limited commercial operations, but opportunities are present, and the market is expected to grow by 21% over the next ten years to reach a value of $137.8 million. While BSF can be used across different feed compounds, it’s primarily being used in aquaculture and shrimp feed at present. With ASEAN being a major driver of the global aquafeed market, which reached $61 billion in 2022, many BSF companies are established in the region.

Companies in the region range from start-ups to those operating in industrial production. Singapore and Malaysia each host 6 companies producing BSF, with 5 companies identified in Thailand. There is less of an ecosystem in Indonesia and Vietnam, with 2 companies in Indonesia and 3 in Vietnam, but Entobel’s Vietnam facility is lauded as the largest BSF facility in ASEANm, capable of producing 10,000 MT per year.   

Disrupting an established supply chain with novel proteins is a challenge, but there are drivers that influence purchasing decisions. Full Circle Biotechnology, a Thailand based BSF company, contends that pledges to climate goals are the primary driver for companies to consider BSF. Full Circle Biotechnology has stated its product has a carbon footprint 100 times lower than soymeal and almost 700 times lower than fishmeal. Sustainability benefits are clear, and through educating farmers they are gaining greater awareness for their products.

Sustainability also needs to meet efficacy standards to gain acceptance from farmers skeptical of the product. Companies like Full Circle and Fly Lab, another Thailand based BSF company, have worked with research universities in Thailand to hold efficacy trails under strict controls. They published that their BSF compounds are producing weight gains in pacific white shrimp when compared with traditional fishmeal.  

BSF companies are however facing challenges to get BSF adopted across the feed value chains. The biggest challenge for start-ups is producing at industrial scale. But prior to reaching scale, demand must be present, and all companies are working on programs to educate farmers about BSF and its benefits. While insects have been used in feed for generations, adopting them as a higher input into feed is a challenge. Companies are forging relationships with universities and research institutes to promote the benefits that BSF can offer to aqua and animal feed through trusted resources.  

Companies are experimenting with ways to source inputs locally, limit the impacts that price hikes of inputs can have on products, and address sustainability. Jesper Clausen of De Heus, a leading animal nutrition company operating across ASEAN, recently noted, “The solution which I personally find the most promising is insects… Insects are a very sustainable source; they upcycle low value waste. The quality of insect-based feed is very consistent, and it is relatively easy to produce. Moreover, it is a natural part of the diet for many fish which means they eat it faster.” However, he went on to state that BSF producers need to solve many challenges including scalability and cost to provide effective solutions to the market.

The BSF feed is in its early stages of innovation and adoption, but the trends are pointing towards greater adoption as companies look for inputs that can be sourced locally, remain cost effective, and meet the sustainability pledges that are influencing purchasing decisions.

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Authored by

James Meisenheimer is Senior Consultant Manager and Kay Khaing Htun is a consultant.