cricket protein

Investors are Starting to See How a Little Bug May Help Solve the Big Sustainable Protein Problem

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Jarrod Goldin starts each morning by making a protein shake. Unlike many shakes, however, Goldin’s contains a unique ingredient: cricket protein powder. Already popular in many countries around the world, crickets are hopping their way into North American diets at a remarkable rate.

For some North American dwellers, the idea of supplementing their diets with crickets conjures a queasy stomach, but the tides are turning. “I think the whole conversation has grown from a very subjective one to a very objective one as we see penetration in the market and sell through rates in grocery stores increasing,” says Goldin, co-founder at Next Millennium Farms. Although the Canadian-based company has been raising crickets for 10 years as reptile feed and for other applications, it’s foray into crickets-for-human-use is relatively new.

In January 2014, Goldin and his two brothers, also co-founders, secured an investment with an angel investor to open up 5,000 square feet of space in its existing facility. With the concept of serving up insects as a protein source still slightly outside the mainstream, Goldin and his brothers had to be careful in how they pitched their project to potential investors.

“I think originally it had far more to do with the ecological, environmental, and nutritional aspects. In the beginning, we were focused on the environment and the need to have an alternative food source for people and livestock as we move into the future,” says Goldin. “It wasn’t so much about cricket protein, it was about a vehicle that could help our ecological footprint on the planet and help humanity at the same time. It was about starting with the problem, not starting with the cricket.”

Cricket protein for food security

In 2013, the United Nation’s Food and Agriculture Organization (FAO) released a report entitled Edible Insects: Future prospects for food and feed security profiling the potential benefits that cricket protein may offer when it comes to ensuring a sustainable and effective way to feed our growing population. The study highlights the value of insects as a nutritious source of human food and animal feed.

“When the FAO document came out contemplating edible insects and future prospects for food security, we thought we should tee off a small amount of space and dedicate it to insect farming for human consumption,” says Goldin. “We anticipated a growing demand for the category and so far we were right.”

Crickets are not only easy to produce, but they also pack an impressive nutritional profile, too. “Cricket protein has 30 times the amount of B12 that beef does pound for pound and a tremendous amount of iron and omega-3 fatty acids,” says Goldin. “It also has an amazing prebiotic profile.” Best of all, Next Millennium Farms’ cricket protein powder can be blended into a variety of foods including smoothies, sauces, condiments, yogurt, and baked goods.

In February 2015, the Goldin brothers raised an additional $1 million in a Series A round with a group of investors, including Hedgewood chairman and chief executive Jesse Rasch. According to Goldin, Rasch’s interest in crickets-as-protein has been piqued for quite some time, and the bug’s potential to provide a sustainable protein source is what drew him in.

The Series A round was used to expand the existing operation from the original 5,000 square feet to a whopping 50,000 square feet. When it comes to production and sales, Next Millennium Farms hasn’t run into too many hurdles. “From a short-term perspective, there hasn’t been any hurdle. We are hoping to be at 100,000 square feet by the end of the year,” says Goldin. The company is currently retrofitting 20,000 square feet of space at a time within its facility, located just outside Toronto.

Cricket protein for humans vs livestock

Compared to producing crickets for reptile feed, producing the critters for human and livestock consumption poses some unique challenges that have forced the Goldin brothers to take an innovative approach to their new business. “The margins on insects in the reptile trade are so high that none of the insect farmers had figured out how to do it efficiently. We can’t have the same margins on the human or livestock consumption side because no one would buy the product,” says Goldin. “As a result, we’ve been forced to innovate to scale up and bring the prices down.”

Goldin and his brothers are finding another way to maximize cricket farming. Cricket excrement, also known as castings or fraz, is a powerful fertilizer source. “It is an incredibly efficient fertilizer,” says Goldin. “There’s a lot of interest for organic fruit and vegetable production.”

Next Millennium Farms’ powdered protein is becoming a highly sought after ingredient for food manufacturers wanting to lead consumers into this new realm of protein. Since branching into the crickets-for-human-consumption realm, the company has seen its market penetration and retail sell-through rates climb. Best of all, Goldin says, cricket protein has allowed many people to discover new technologies and become more aware of the future of farming.

Many companies are catching on to the cricket craze and creating new products based on the nutritious protein. New York-based Exo is a perfect example of just how simple integrating cricket protein can be. What began as two Brown University student’s kitchen experiment in January 2013 has turned into a full-scale protein bar company. The co-founders, Greg Sewitz and Gabi Lewis decided to blend cricket protein powder into protein bars as a way to help skeptical consumers bridge the gap between their jitters of chomping down crickets and realizing the benefits the bugs have to offer.

“We launched on Kickstarter and raised $55,000 a few years ago,” Sewitz recently told AgFunderNews. “Last October, we raised a $1.2 million seed round and used that to pay for capital, make a few key hires, and boost our inventory.”

Like Goldin, Sewitz sees crickets as having strong potential when it comes to identifying a sustainable protein source. “The United Nations estimates that crickets are 20 times more efficient as a protein source than cattle. Crickets produce 80 times less methane,” says Sewtiz. He also points to crickets feed conversion ration, which measures how many pounds of feed the animal must consume to produce one pound of protein. “Cricket’s feed conversion ratio is 1:1 while cows have a feed conversion ratio of 10:1,” he says.

Cricket protein bars

Today, Exo sells its cricket protein bars all over the world through its online platform. Although the bars have seen a great deal of success, particularly with the health and fitness crowd, Sewitz sees the company eventually branching into a wider variety of cricket protein products and exploring the potential use of other insects.

In the future, Goldin wants to see crickets traded on the stock market as a commodity, like orange juice and coffee. When it comes to allaying North Americans’ doubts about the palatability of cricket protein, Goldin finds hope in one discovery he’s made along the way: “Kids have no issue with it. They actually really love it.”

As cricket protein continues to attract investors’ attention and gain popularity throughout the United States and Canada, we may soon realize that the only bug in the cricket protein equation is the one we have in our preconceived perceptions of what’s edible and what isn’t.


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