The recent bankruptcy of Ynsect, once a leader in the insect breeding industry, offers an important lesson on the challenges inherent in this emerging market.
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Founded in 2011, the French company aimed to revolutionise the food industry through the production of sustainable insect-derived proteins for animal and human nutrition. However, despite huge investments and ambitious expansion strategies, Ynsect recently went into bankruptcy proceedings due to serious financial difficulties.
In-depth analysis of the causes of Ynsect's bankruptcy
One of the main causes of Ynsect's failure was the excessive speed and ambition of its expansion plans. After raising over EUR 550 million in funding, the company embarked on the construction of large-scale production facilities, such as the Poulainville gigafactory, and acquired competitors in the Netherlands and the US. This aggressive expansion resulted in high costs that were not compensated by sufficient revenue. In 2022, Ynsect recorded sales of only EUR 568,000 against losses close to EUR 90 million.
Another contributing factor was the reduction of private and public investments in an uncertain global economic environment. Declining financing has limited Ynsect's ability to sustain its projects and increased the financial pressure on the company. In 2023, despite raising EUR 160 million, Ynsect was forced to close a plant in the Netherlands and reduce its workforce by 20 per cent.
Furthermore, the decision to focus mainly on breeding the Tenebrio molitor (mealworm) may have limited the company's market opportunities. Although Tenebrio molitor is a viable protein source, other species such as the black soldier fly (Hermetia illucens) offer significant competitive advantages, especially in the animal feed sector.
Black soldier fly vs. Tenebrio molitor: a comparison for feed use
The black soldier fly (Hermetia illucens) and Tenebrio molitor are among the most studied insect species for animal feed. However, the black soldier fly has characteristics that make it particularly suitable for use in feed:
Efficiency in bioconversion: Hermetia illucens larvae can feed on a wide range of organic substrates, including food waste and manure, efficiently converting them into protein biomass. This ability not only reduces feeding costs, but also contributes to sustainable waste management.
Nutritional profile: Black soldier fly larvae contain a high percentage of protein (about 36-48% of dry matter) and beneficial fats. In addition, they are rich in lactic acid-producing bacteria, which can act as probiotics, improving the intestinal health of the animals.
Environmental sustainability: Farming Hermetia illucens requires fewer resources than other traditional protein sources and contributes to the reduction of organic waste, making it an ecologically beneficial option.
Furthermore, studies have shown that the inclusion of Hermetia illucens larvae in the diets of various animals, such as chickens and fish, not only improves growth performance, but can also boost the animals' immune systems due to the presence of bioactive compounds in the larvae.
The case of Ynsect highlights the importance of balanced strategic planning and careful choice of species to breed in the edible insect sector.
While rapid expansion not supported by adequate income can lead to serious financial difficulties, the adoption of species such as the black soldier fly, with its many competitive advantages, could offer more promising opportunities in the feed market. A sustainable and well-considered approach is essential for long-term success in this emerging sector.
In this context, the adoption of innovative technologies such as Kinsect could represent a breakthrough for the insect breeding industry. Kinsect is an advanced technology platform that integrates automation, artificial intelligence and real-time monitoring to optimise production in insect farms. This technology enables the automation of key processes such as feeding, harvesting and environmental control, significantly reducing operating costs and increasing production efficiency.
The implementation of Kinsect in insect farms offers several economic advantages:
Reduced operating costs: The automation of processes decreases the need for manual labour, lowering personnel costs.
Increased productivity: Continuous monitoring and optimisation of environmental parameters promote faster and healthier insect growth, increasing production.
Quality improvement: The use of advanced sensors and control systems ensures high quality standards, increasing the commercial value of the derived products.
Scalability: The modularity of the Kinsect platform allows production to be easily adapted according to market demand, avoiding over-investment in infrastructure.
Furthermore, the integration of Kinsect can facilitate access to new high-margin markets, such as pet food and human food supplements, growth sectors that require high quality standards and traceability, which the technology can guarantee.
The case of Ynsect highlights the importance of sustainable growth and adoption of innovative technologies in the insect breeding industry. While rapid expansion not supported by adequate revenue can lead to severe financial difficulties, the integration of technology solutions such as Kinsect offers the opportunity to optimise production processes, reduce costs and improve product quality. This approach can help make insect farms more resilient and profitable, supporting the development of a key sector for global food sustainability.
Discover how Kinsect’s innovations are driving the future of insect-based proteins for sustainable animal feed.
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