Thai Union to invest in insect-based feed companies

Published on
March 27, 2020

Thai Union is looking to use proteins produced from insects to replace fishmeal in its fish farming, The Bangkok Post reported on 13 March.

Environmental groups have labeled conventional fishmeal as an unsustainable feed worsening the impact of fish farming. Insect-based feed may address their concerns and help build a sustainable fisheries sector, the newspaper reported.

Thai Union also said it is seeing a change in consumer behavior, with people becoming increasingly in favor of alternative proteins, including plant-based and insect proteins.

"I expect to use some of these products soon in our operations," Thai Union CEO Thiraphong Chansiri said. "We can use alternative proteins to replace fishmeal, but cost is the key and that is something these start-ups have to take care of."

The company has made an initial commitment of USD 30 million (EUR 27.2 million) for investments in innovative companies that are developing breakthrough technologies in food-tech. As a first investment, Thai Union has announced an investment into Israel-based Flying Spark. The alternative protein start-up uses fruit fly larvae that in nature feed on fresh fruit.

According to Chansiri, Thai Union is considering investing in two to three more start-ups and will allocate up to USD 5 million (EUR 4.4 million) to invest in each.

Last week, foodtech incubator and accelerator Space-F, which was co-founded by Thai Union, held a demo day for start-ups from Thailand, the United States, Germany, and Singapore to present business pitches to potential investors. Among the start-ups participating was Thai Ento Food, which makes a protein powder out of house crickets and black soldier fly larvae, and Orgafeed, a company focusing on producing insect-based dog treats.

"Many innovative projects in Thailand are focused on fintech, but foodtech is more complicated and difficult, maybe because of the education required, making it hard to find deep foodtech startups in Thailand," Chansiri said. 

The company’s 2019 sales reached THB 126.3 billion (USD 4.04 billion, EUR 3.73 billion) in 2019, falling 5.3 percent year-on-year, due mainly to the appreciation of the Thai local currency against key trading currencies. Earlier this year, Thai Union said it hoped to increase its sales by 3 to 5 percent from 2019, with a capital expenditure of THB 4.9 billion (USD 157 million, EUR 144.8 million), but that goal was set before the coronavirus epidemic slowed the global economy.

Reporting from Hanoi, Vietnam

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