Sir, here is your mealworms in curry sauce

Tenebrio molitor’s larvae is popular as insect-food

When I was small, living in a village with many rivers and natural ponds, a favourite hobby was fishing for fresh water fish. We would find larvae of beetles in fallen sago palms and used it as a fish bait. In remote parts of Sarawak in East Malaysia, locals eat these live larvae as delicacies as they are considered nutritious and as aphrodisiacs. Fallen sago palms are favourite places to find the  larvae.

The larvae of beetles is no longer only for locals in remote regions of Asia. It was reported in the Guardian, dated January 13th, 2021, these larvae could soon be mass produced across Europe after the insect became the first to be found safe for human consumption by the European Union (EU) Food Safety Agency. The larvae of the beetle Tenebrio molitor could be eaten in powder form as part of a recipe or as crunchy smacks.  

The conclusion of scientists at the EU Food Safety Agency, following application by the French insect-for-food production company, Agronutris, is expected to lead to EU-wide approval within months of yellow mealworm as a product fit for supermarket shelves and kitchen pantries across the continent.

Mealworms are the larval stage of the beetle, Tenebrio molitor, a species of darkling beetle. Like all holometabolic insects, they go through four life stages: eggs, larvae, pupa, and adult. Larvae typically measures about 2,5 cm or more, whereas adults are generally between 1.25 and 1.8 cm in length.

A bunch of mealworms

Interesting Facts

According to Wikipedia.org, the mealworm beetle breeds prolifically. Mating is a three-step process: the male chasing the female, mounting her and inserting his aedeagus, and injecting a sperm packet. Within a few days the female burrows into soft ground and lays eggs. Over a lifespan, a female, on average, lay about 500 eggs.

After four to 19 days the eggs hatch. Many predators  target the eggs, including reptiles. During the larval stage, the mealworm feeds on vegetation and dead insects  and molts between each larval stage., or instar (9 to 20 instar). After the final molt it becomes a pupa. The new pupa is whitish, and it turns brown over time. After 3 to 30 days, depending on environmental conditions such as temperature, it emerges as an adult beetle.

Mealworms have historically been consumed in many Asian countries, particularly in Southeast Asia. They are commonly  found in food markets, and sold as street food alongside other edible insects. Baked or fried mealworms have been marketed as a healthy snack food in recent history, though the consumption of mealworms goes back centuries. They may be easily reared on fresh oats, wheat  bran, with slices of potato, carrot, or apple as a moisture source. The small amount of space required to raise mealworms has made them popular in many parts of Southeast Asia.

The insect’s main components are protein, fat and fibre, offering a potentially sustainable and low carbon-emission source of food for the future. When dried, larvae is said to taste a lot like peanuts.

Insects-for-food Industry

The leading players in the insects-as-food industry have been held-back by a lack of EU-wide approval. The products are prohibited from sale in France, Germany, Italy and Spain, among other European countries. Without approval from the Food Safety Agency, they faced being banned  elsewhere on the continent too. The UK, Netherlands, Belgium, Denmark and Finland, have previously take a permissive approach to an EU law that requires food not eaten before 1997 to obtain novel food authorisation from Brussels. British, Dutch, Belgian and Finnish regulators had decided the EU directive did not pertain to animals products used for food. But in 2018 a new EU law sought to bring some clarity. It stipulated that insect-based dishes would require novel food authorisation, putting the nascent insect-food industry on a weak footing.

Cricket is a popular insect-food

The products have remained available in those countries as a result of a transition period to allow companies already producing food from insects to operate until they receive the final judgement.   

Insect-based food has long been seen as a part of the solution to cutting the emission of greenhouse gases in food production. Guardian quoted Mario Mazzocchi, professor at the University of Bologna: “ There are clean environmental and economic benefits if you substitute traditional sources of proteins with those that require less feed, produce less waste and result in fewer greenhouse gas  emission. Lower costs and prices could enhance food security and new demand will open economic opportunities too, but these could also affect existing sectors.”   

Giovanai Sogari, a social and consumer researcher at the University of Parma, said the squearmishness of many consumers towards insect-originated food product may eventually fall away. “There are cognitive reasons derived from our social and cultural experiences-the so-called ‘yuck factor’ – that make the thought of eating insects repellent to many Europeans,” he said. “With time and exposure, such attitudes can change.”

Insect-As- Food Companies

Our research shows there are a number of insect-as-food companies based in Europe and in other countries. They include:

No.CompanyCountryInsectProducts
1MicronutrisFranceYellow mealworms and cricketsSnacks
2AgronutrisFranceCrickets, yellow mealworms and black soldier flyAnimal feeds
3ProtifarmNetherlandsBuffalo beetlesFood ingredients
4EssentoSwitzerlandYellow mealworms, grasshoppers and cricketsSnacks and protein bars
5EntogourmetSpainCricketsPower, dried and frozen
6AgriproteinUKBlack soldier flyAnimal feeds

A long list of insect-as-food companies and entrepreneurs is found on www.bugburger.se. Thailand has the most established insect-as-food industry. It covers insect farms, insect processing  companies, and substantial market of insect-eating consumers. In my country Malaysia, the insect-as-food industry has a small potential due to a large population of Muslims in the country. Insects are considered as non-permissible foods.  

Innovators who own start-ups can now go public via SPACs

Virgin Galactic, owned by Sir Richard Branson, merged with SPAC Social Capital Hesdosophia

We begin 2021 with an article on a new alternative source of capital for innovators.    

The first topic of the new year is on SPAC, special-vehicle acquisition company. In the US innovators have taken their companies public by merging with SPACs.

Through SPAC owners of start-ups have a different, perfectly legal approach to promoting their companies to investors. The approach includes interviews with obscure YouTube channels which are frequented by individual traders, appearance on cable news, and projections that call for billions of revenue.

Publicity and forecasts of rapid growth have become routine  of an Initial Public Offering (IPO) of  going public through SPACs. The use of what are called blank-cheque companies, which go public with assets and then merge with private companies increased in 2020. SPACs have raised a record  US$62.1 billion as compared to US$$13.5 billion in 2019, according to Wall Street Journal on January 3rd, 2021.

Companies that went public through SPACs, including many nascent firms  with no revenue, have said that they were attracted to the relative speed and certainty of the process, which can be completed months faster than some traditional IPOs.

In the case of IPOs, the US Securities and Exchange Commission (SEC) requires company executives  to stay in a quiet period during weeks  around public listing. Regulators don’t want companies to be marketing their stocks to unsophisticated investors outside of a regimented process. Similarly, companies don’t include projections in the IPO documents because of regulations that put them at high risk for litigation if they miss these plans.

Companies that go public through SPACs face fewer constraints because the deals are considered  mergers. The Wall Street Journal article quoted an example, Fisker Inc. The company, an electric-vehicle start-up in July 2020 announced to go public by merging with a SPAC. Fisker has ambitious plans  but little in terms of product or revenue to show investors.  While it had about 50 employees, it disclosed projections to investors that called for it to hit US$13 billion in revenue in 2025, up from zero in 2020. The founder, Henrik Fisker, went on cable television repeatedly and remained prolific on social media. After the deal’s announcement-but before the merger was completed in late October 2020- Mr Fisker wrote on twitter about how the company was sold out of reservations  for the SUV it plans to build in 2022 and hinted about coming news before  a deal with a manufacturer was announced.

The Fisker spokesman  said that Mr Fisker was not marketing to individuals investors and that his interviews were included in regulatory filings to investors.  

SPACs offer a new avenue for start-ups to promote themselves as well as raise money in the US.. A SPAC’s most valuable asset, besides all the cash from investors, is arguably is its stock market listing. The company it invests in instantaneously becomes a public one, without many hassles that go along with a traditional IPO.

SPACs offer businesses and start-ups a surer deal-just take this money that had been raised by the sponsor of SPAC. In a world of low interest rate and high valuation on other stocks in the US, investors see SPACs as a reasonable place to park money for a while. A SPAC in the US  is typically structured so that an investor can get his/her money out if he/she doesn’t like the  deal a SPAC makes, and there us the chance that he/she will be getting early in next hot, growth company.

SPACs in the US have a time limit of 18 to 24 months to acquire businesses. According to BTIC.com, an investment advisory company, there are more than 210 SPACs seeking acquisition in the US.   Stockmarket.com provides a list more than 200 SPACs on its website. The major SPACs include :

  1. Draft Holdings
  2. Fisker Inc.
  3. Virgin Galactic
  4. Workhorse Group, and
  5. Repay Holdings

Note: Readers should be aware that the article is not a recommendation to buy a particular SPAC. It only highlights a new avenue for businesses to raise capital by merging with a SPAC.