Insects are a future source of sustainable livestock feed and Brazil is an emerging site of investment.
Brazil’s entry into insect protein is only just beginning but with scaling, it could help drive greener global food systems.
A boost to Brazil’s insect sector
Brazil’s bioeconomy is best known for its conventional agricultural exports like coffee or beef as well as biofuels production.
However, insect proteins could be a new biobased growth sector for the agribusiness giant. The most promising indication of this came in January 2024, when Japan’s Sumitomo Corporation announced a joint investment into Brazilian insect protein producer Cyns.
Based in Brazil’s capital Sao Paulo, Cyns has 15 years of experience cultivating protein-rich insects designed for use in animal feed. The 2024 funding round from Sumitomo was the first step towards scaling, with plans to establish a new rearing facility. They aim for Series A funding by 2026.
The hunt for climate-friendly protein
Sumitomo is a Fortune 500 company and one of the world’s largest trading companies. Its Cyns investment was significant because it involved a major foreign investor betting on sustainable food production as a long-term trend in Brazil and its export markets.
This is because Cyns and other insect protein producers could meet a vital need in the climate tech space: a new, abundant, and sustainable source of proteins for livestock animals.
So much of the climate and ecological crisis stems from the way we eat and how we produce it. Animal products are a major culprit, accounting for 16% of global annual greenhouse gas emissions.
One reason that livestock farming today is so unsustainable is that animals need to eat lots of protein. The protein we feed to livestock generally comes from crops like sunflower seed, soybean, or rapeseed.
Huge demand for livestock feed worldwide means lots of the crops under cultivation today are actually for animal rather than human consumption.
The problem is that there is only a limited amount of fertile land available. This creates competition over land between food for direct human consumption versus animal feed consumption.
On top of this, eating livestock meat is an inherently wasteful way to get protein. This is because at each stage in the food system – from plants to livestock, livestock to humans – energy and nutrients get lost as heat or in materials that cannot be digested.
Cattle are particularly bad converters of feed into meat. Just 1.9 percent of the protein in their feed, for example, get converted into an animal product ready for consumption.
This means that lots of precious land, fertiliser, water, and other resources used to grow protein-rich crops are going to waste.
The future of livestock farming
Scientists are clear that the world must cut back on overall meat consumption to meet climate and nature targets.
At the same time, some livestock farming is likely to continue. Some modelled scenarios where we meet climate change targets do allow for limited meat consumption.
Yet the future of livestock will be very different to the way it is today. One area crying out for change is animal feed. The industry must source new kinds of proteins for their animals. These future feeds must keep resource use and wastage to a minimum.
This is where Cyns comes in. The company has found a way to grow commercial quantities of the fly species Hermetia illucens, better known as the Black Soldier Fly. They then processes their larvae into a rich flour meant for the animal nutrition market.
The company claims that livestock feed made using a flour obtained from its larvae can cut the inefficiencies associated with using soybean, rapeseed, or sunflower seeds to feed livestock.
Scrumptious larvae
Cyns processes their flies when they hit their larval stage. This is when the insect is wingless and wormlike, waiting to change into their final winged form.
Larvae tend to be rich in easily digestible proteins. Black Soldier Fly’s larvae are particularly nutritious. Protein content ranges from between 30 grams to 53 grams out of every 100 grams of dry matter. Cyns claims their larvae offer gross protein of above 50 percent.
Cyns stands out for having been the first company to obtain regulatory approval to make and sell Black Soldier Fly-based animal feed ingredients.
Livestock is not the only end market: Brazil’s dog and cat food market are also ripe for sustainable inputs. Its pet food market is increasing 5.6% in terms of volume annually. Brazil’s is also the world’s fastest growing pet food industry.
Pet food is generally not as big a contributor to climate change and habitat destruction as the livestock feed industry. However, with the global pet population increasing, the industry’s impacts are also growing, quickening demand for sustainable feed options here too.
Natural upcyclers
Critters like the Black Soldier Fly are workhorses of the future proteins industry because they are natural upcyclers. This means they can eat and make use of low-energy, low-nutrient materials that other species struggle to exploit.
Often, the nutrients and compounds locked up in organic food or farming waste is so diluted that it can be hard even for human industries to extract and use them at cost.
The insect metabolism is different: evolution has equipped them with a biological system that can convert low value waste into high value compounds. It means they can concentrate nutrients diluted across high volumes or low quality waste into their bodies.
Cyns takes advantage of this upcycling ability. The larvae of Black Soldier Flies are plump reservoirs of high-quality proteins that can be easily processed into feed-grade flour. The end product is very far from the low-energy byproducts that the insects were fed on.
Insects against deforestation
For a nation built on cattle ranching, food tech like insect proteins is still an emerging industry in Brazil. So why is Japan’s premier trading firm investing in it?
What Sumimoto likely saw in Cyns is a way to profit from mounting demand within Brazil’s huge agribusiness sectors for sustainable farming inputs.
Brazil’s feed market size was estimated to be $22.91 billion in 2022. A CAGR growth rate is forecast at 5.67 percent between 2023 and 2029 – unsurprising for the world’s biggest beef exporter at a time when global meat consumption is growing.
Yet Brazil’s agribusiness sector is in need of serious sustainability reforms. Right now, it contributes a fifth of its overall greenhouse gas emissions.
One of the biggest obstacles to reducing its agricultural impacts are soybeans – one of its biggest exports. Soybeans are used to make 70% of the world’s livestock feed. Brazil tops the global rankings for share of exports.
Brazilian soybean is increasingly a toxic brand. Brazilian producers have destroyed highly biodiverse natural habitats to clear space for fields of this lucrative export crop.
A major driver of more sustainable bio-industries in Brazil will be regulatory shifts in big export markets like the EU, which is due to ban imports of soy linked to forest destruction.
Over coming years, increasing demand for sustainably produced food and feed from export partners could make insect protein-based livestock feed more appealing to Brazilian producers.
Brazil diversifies
Insect proteins could be one way for Brazil to diversify its bioeconomy and help the world to move away from habitat-destroying soybean cultivation.
Progress on scaling sustainable agricultural inputs in Brazil would have ripple effects across global supply chains. Not only is it a huge agricultural producer and a top agricultural exporter, it is also one of the most biodiverse countries on the planet.
Shifting Brazil’s economy away from mass soybean production would support global conservation targets, helping protect habitats like the Amazon.
Scaled sustainable insect feed would also help food supply chains around the world reduce their ecological impacts. So much soybean comes from Brazil that many meat value chains around the world are intimately bound up with Amazonian deforestation. Scaling insect protein and exporting it could help make food systems elsewhere less destructive.
The insect protein value chain is still only just emerging in Brazil. Costs are not competitive compared to conventional protein sources. Some of this is down to the fact that insect feed production remains artisanal. More automation would lower costs.
On the plus side, demand for insect protein-based feed outstrips supply meaning plenty of room for capacity investments.
By leveraging its advantages, the country could construct a new export industry that finally breaks the link between livestock and Amazonian deforestation.
