Ynsect, an insect protein company based in France, has decided to shift its focus away from animal feed following a recent capital increase. With an investment of $175.6 million (€160 million), which was backed by Robert Downey Jr., the company aims to pivot toward high-margin markets like pet food.
The company plans to use this funding to expand its flagship vertical insect farm in Amiens, northern France, as well as to finance new projects.
Here’s the Complete Story
Insect protein has been gaining popularity in recent years as an alternative source of protein for animal feed and human consumption. Ynsect, a France-based insect protein company backed by Hollywood superstar Robert Downey Jr., has recently announced a pivot in its business strategy away from animal feed and toward high-margin markets such as pet food.
This decision comes after the company raised $175.6 million (€160 million) in its latest capital increase. Ynsect intends to utilize this financing to enlarge its primary vertical insect cultivation facility located in Amiens, northern France, and also allocate funds toward fresh ventures. The company has also decided to shut down its Dutch facility to focus on its new direction.
Ynsect’s high-margin market pivot is a smart business move for several reasons. Firstly, the pet food industry is a rapidly growing market, and the global pet food market size was valued at $87.08 billion in 2019. As pet owners become increasingly conscious of their pets’ health and well-being, the demand for premium pet food products is expected to rise.
Secondly, insect protein is an excellent source of nutrition for pets. Insects are rich in protein, amino acids, and essential fatty acids, making them a great alternative to traditional animal protein sources. Insects also have a low environmental footprint, making them an environment-friendly option for pet food manufacturers.
According to the BIS Research report, the global insect protein market was estimated to be at $342.87 million in 2021, which is expected to grow with a CAGR of 26.49% and reach $1.38 billion by 2027.
What are the future plans of Ynsect?
By pivoting toward high-margin markets, such as pet food, Ynsect is also creating a sustainable business model. Insect protein is a relatively new industry, and as such, there is a lot of uncertainty regarding demand and supply. By targeting high-margin markets like pet food, Ynsect can ensure that it has a stable customer base and a predictable revenue stream.
Furthermore, Ynsect’s decision to shut down its Dutch facility is a strategic move to optimize its operations. The company’s flagship vertical insect farm in Amiens is the largest of its kind in the world, and expanding this facility will enable Ynsect to increase its production capacity and reduce costs. By consolidating its operations, Ynsect can streamline its processes and ensure that it is operating as efficiently as possible.
Ynsect’s high-margin market pivot also has positive implications for the environment. As the demand for insect protein increases, traditional animal protein sources like beef, chicken, and pork may become less popular. This, in turn, could reduce the environmental impact of animal agriculture, which is responsible for significant greenhouse gas emissions, deforestation, and water pollution.
Conclusion
Insect protein is still a new industry, and there are many challenges that must be overcome before it can become a mainstream protein source. These challenges include regulatory hurdles, consumer acceptance, and scaling up production.
Nonetheless, Ynsect’s pivot toward high-margin markets such as pet food is a positive development for the industry, and we can expect to see more companies following in its footsteps in the future.
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