The future of novel food emerging businesses in the current economic climate

2nd of August 2023, Brussels — The cost of living has increased significantly over the past year, interest rates are escalating, input costs have skyrocketed, and it is thus legitimate to ask whether this difficult economic climate has an impact on emerging insect businesses. ValuSect calls for more investment from public funds in the short term, to help this emerging sector.


As everyone has noticed, food inflation remains very high in the majority of the European Union. As a result, the use of food banks has increased dramatically and people have less disposable income to spend on food items, that may be seen as unnecessary. Insect food brands are not well enough established for consumers to see their products as a necessity yet. Although insects represent a new sustainable food and feed option, consumers are not yet convinced of this opportunity. This is why ValuSect is working to strengthen insect-based businesses, to give them the stability they need to establish themselves as a reference in our food systems.

Because interest rates are rising, banks are becoming more wary about lending to businesses, especially those who do not have a strictly successful trading history. Insect businesses have been seen as “risky”, even in a more positive economic climate, and will now be seen as less attractive to invest in, unless they can demonstrate a loyal consumer base that will continue to buy during the difficult economic times we are experiencing. ValuSect believes it is possible to build this loyal consumer base and is keen to establish this relationship with European consumers, as well as with investors.

Most insect businesses have not been in operation long, so will not have built up financial reserves to help keep them going; and are therefore exposed to financial risks, sometimes to the point of bankruptcy. It is important to also consider the input cost of insect businesses, keeping in mind that energy costs have skyrocketed. ValuSect intends to help small insect businesses build financial visibility, despite a difficult economic climate.

In the short term, the sector as a whole does not appear to be strong enough to cope with the economic challenges, with the risks that the sector will not grow and potentially become smaller than it was a few years ago. Therefore, if governments and policy makers believe that insect production and processing are part of the solution for future sustainable food sources, which ValuSect strongly believes in, then we call for more public investment (both capital and revenue funding) to be made now.

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