2024: an optimistic year for these 2 insect pet food players?

In 2021, Future Market Insights valued the insect pet food market at $7.09 billion (€6.39B). Today, the same research firm puts this sector at $13.41 billion (€12.09B)—almost double the value in 2 years. The category is expected to grow at a yearly rate of 10% by 2033.

A sign of the segment’s potential is seen in the optimism that companies in the sector have for 2024.

Entobel

Entobel, a Singapore-based biotech company that produces insect-based ingredients from black soldier fly larvae (BSFL), recently launched its second insect production facility in Vũng Tàu province in Vietnam.

According to the company, the facility features 50 levels of vertical rearing, incorporating automation via robotics, cutting-edge sensors and data analytics that enhance productivity.

With an annual production capacity of 10,000 tons, it is expected to generate $25–30 million (€23–€28M) in revenue. “We hope to reach at least 50% of the capacity by the end of next year from the site,” Co-Founder Gaetan Crielaard tells GlobalPETS.

Entobel’s first production plant, established 3 years ago, helped the company understand the local market. Its second facility also caters to the regional market. Entobel’s priority is to expand within the country. However, other countries in the region, such as Indonesia, are also on its expansion map.

New funding in 2024

After closing a $30 million (€28.3M) funding round in 2022, Entobel plans to re-enter the fundraising market in the first half of 2024. “The Series C fundraiser will be bigger than the Series B. So, we want to go quite aggressively in terms of capacity increase”, adds Crielaard.

After Entobel’s first demonstration facility, the company decided to scale up the automation capabilities and facility size of the second Vũng Tàu site to reduce the product and labor cost per ton of produced insect meal. As Gaetan shares, the next step for Entobel would be to supply the volumes that the market needs and have an impact.

“We want to reach 100,000 tons of insect meal per year capacity in the next 10 years. And that’s why we need to raise funds to grow because it’s still a CapEx-intensive (capital expenditure) industry.”

Increasing demand

Entobel currently exports around 50% of its production for pet food applications. Its key markets include Australia, Japan and the US. Gaetan asserts that the market “is not yet ready to pay a huge premium for sustainability today.” However, the company is looking for potential distribution partners in developing markets like Japan.

The company also seems to hold a strong regional presence: “In Vietnam, we are able to offer [our insect meal] product at a price that is competitive against imported fishmeal,” and in the pet food market, Entobel’s clients “seem to be happy” with the offered cost value equation, indicating market competitiveness.

“We want to focus on what we’re good at producing: a quality insect protein at a competitive price,” Gaetan concludes.

Percuro

UK-based insect-protein pet food producer decided earlier in the year to push its production capacity and expand its portfolio into new markets after witnessing a 300% growth in its 2023 performance.

“Our ambition over the next 3–5 years is to capture 1% or $180 million (€167.4M) in revenue in the premium pet food market,” comments CEO Brett Vye.

Percuro currently offers 8 SKUs for the dry pet food market for puppies and adult dogs and looks forward to expanding its range of products to cats in the first half of 2024. The company told other media about their inclination toward the wet cat food market as it offers better opportunities than dry cat food.

The 2020-established company has raised £2.5 million (€2.9M/$3.1M) in funding to date. Percuro’s projected revenue for 2023 is reportedly over £1 million (€1.1M/$1.2M).

International expansion

Apart from its home base in the UK, Percuro is first targeting markets in Germany, the United Arab Emirates (UAE) and Asian countries such as Singapore, Malaysia, Taiwan and Japan.

Vye says that the US also presents a massive opportunity for the company. However, he cautioned that this competitive market requires a cautious and calculated approach. The company will begin distributing from New York when it enters the market.