CrossBoundary Advisory
20.06.2024
Blog
20.06.2024
Blog

African agriculture’s next frontier: leveraging Black Soldier Fly models for improved food security

Key Insights
The Black Soldier Fly (BSF) has potential as an alternative and sustainable protein source for animal feed production, organic fertilizer, and a solution for waste management
From converting organic waste into a nutrient-rich source of protein to producing organic fertilizer, BSF technology has the potential to revolutionize the way we think about food
Our East Africa Advisory team explores BSF commercial-scale processing operations in Africa and three clear roles for blended finance that could bolster the growth of this sector
The "triple threat" caused by population growth, climate change and economic downturns has exacerbated food insecurity in many countries on the African continent. The COVID-19 pandemic and ongoing Russia-Ukraine conflict, in particular, have highlighted the vulnerabilities of African food systems, with lockdowns, border closures, and supply chain disruptions compromising the trade and transportation of food as well as agricultural inputs such as feed, seeds, and fertilizers.

These multiple crises have motivated the quest for alternative locally sourced and resilient solutions. One of these solutions has been the Black Soldier Fly (BSF), which over the past few years has grown in popularity due to its potential as an alternative and sustainable protein source for animal feed production, organic fertilizer, and a solution for waste management.

The BSF is a wasp-like species of fly that are a powerhouse when it comes to their potential to solve some of Africa’s biggest food problems. From converting organic waste into a nutrient-rich source of protein to producing organic fertilizer, BSF technology has the potential to revolutionize the way we think about food security. In addition, large-scale Black Soldier Fly farming could provide a sustainable solution to challenges resulting from organic waste management due to rapid urbanization across most African cities.

According to an article by the Rockefeller Foundation, Black Soldier Flies are alive only for a fleeting six weeks. But during that time, they reproduce generously, laying 500-plus eggs in a single batch. In the larvae stage, they have the ability to transform organic waste into high-quality protein.

Source: MDPI (https://www.mdpi.com/2073-4441/14/19/2953)

When processed, they contain up to 40-50% of high-quality protein. They are also rich in antimicrobial, medium-chain fatty acids which have been proven to have gut health benefits. In addition, their shell is made of chitin, which is a great source of fiber that further boosts gut health.

Figure 1: Key BSF players in Sub Saharan Africa

Beyond their application as a rich source of protein for the manufacturing of animal feed, these flies are also excellent decomposers, which makes them the ideal candidate for processing compost and other organic waste materials into inert substances.

Black Soldier Flies are easy to rear given that they require no water input, breed prolifically, and can eat almost anything. In addition, unlike more commonly used protein sources for animal feed such as soya and fish meal, they do not compete with human consumption demand and are therefore not subject to (seasonal) price fluctuations. Further, BSF are tropical insects that survive in warm climates making most African countries suitable for rearing them.

If these insects are truly such power houses, why are there only a handful of commercial-scale processing operations in Africa?

While this low-input, high-output model has sparked interest in the entrepreneurial world, with several smallholder farmers setting up Black Soldier Fly farms, the majority have struggled to scale.

There are several reasons why these enterprises have hit growth hurdles. First, just because these voracious insects can eat almost any organic food, it doesn’t mean they should. The type of biowaste fed to the BSFs is a key determinant of the viability of the operations. While the larvae can survive on a variety of substrate types, their performance reduces with certain ones. Substrates with a high concentration of nutrients such as protein and carbohydrates have higher performance than ones with a high concentration of cellulose, lignin, and ash e.g., cow manure. Therefore, the selection of foods can have a material impact on growth.

Source: ETH Zurich (https://sfp.ethz.ch/research/insect-bioreactor.html)

A webinar by UN-Habitat conducting a deep dive on Waste Technology with a focus on Black Soldier Fly Larvae Composting highlights sourcing separated, well-priced substrate as a key constraint faced by commercial BSF operations. While the majority of the organic waste produced in Africa is disposed in landfills and dumping sites and therefore arguably readily available, sensitization around waste sorting requires significant investment by both governments and the private sector that most do not have the capacity to make. BSF operators are therefore left grappling with the cost of waste sorting and decontamination. In addition, the large waste generators that BSF companies would typically engage directly are now recognizing the potential value of their waste and are looking for more value-add in return.

Our conversations with waste collectors in East Africa revealed that the additional cost of separation would have to be incurred by the customer in the form of additional bags for separating the different types of waste. This is a difficult sell, especially given that local authorities are still grappling with sensitizing the public on paying for waste collection. Kampala Capital City Authority (KCCA) had set a cap for prices that private collectors were allowed to charge (UGX 3K per month), and where they charged more, the incremental fees were intended to be a subsidy for other areas such as slums.

Despite being a promising industry, the market for insect protein on the continent is still in its early stages and requires investment in consumer education to increase sales. Additionally, even when producers have secured an off-take market for their products, such as animal feed and organic fertilizer, maintaining a consistent volume of supply remains a challenge. To achieve the high levels of production needed for processing operations, producers feed the larvae different substrate types resulting in varied biomass conversion (larvae biomass produced per input kilo of substrate) and protein composition per batch. This makes it difficult to guarantee consistent output levels and consistent protein composition, which is crucial for automated feed production. This, in addition to the cost of raising dry-weight larvae, the cost of drying and defatting larvae for preservation of the harvest, plus the associated costs with shipping, marketing, labor, acquisition and operation of equipment, facility maintenance, utilities, servicing debt, etc. make scaling a formidable task.

To overcome these challenges, BSF companies are constantly refining their business models. One trend that we have observed is businesses shifting away from producing agricultural inputs and instead concentrating on breeding. By honing their expertise in a particular aspect of the industry, these companies are discovering ways to lower their operational and capital costs while improving their competitiveness.

The potential of Black Soldier Flies to address local and sustainable input sourcing which is crucial to addressing food security concerns in Africa, is undeniable. However, it is important to question if our current approach towards scaling BSF processing models is the most effective and efficient way to fully unlock this potential.

Instead of scaling up industrial plant facilities that require significant capital investments, DipTerra, a BSF consulting firm, argues that one potential solution for scaling BSF models is to take an out-grower approach that would tap into the budding network of small-scale BSF farmers. This approach is based on the idea that BSF larvae can be grown relatively inexpensively on a modular scale using portable “Propagation Bioreactors” (PBRs) fabricated from commercially available totes and agricultural bins.

A company farming BSF could focus on building and designing simple layout plans for the assembly of smaller decentralized production plants capable of producing larvae on a scale in the range of 5 to 10 metric tons of dry larvae per year per unit farm. This approach not only reduces the cost and risk of investing in one large plant facility, but also allows the company to avoid the full burden of operating a large-scale plant facility.

The proposed model focuses on designing modular plant facilities that are easy to operate and install on small farms and sites and leverages large-scale pooling for marketing and selling the harvested BSF larvae from these small facilities.

Through this approach, the company has the potential to gain new revenue streams by providing expertise, selling modular equipment, and offering design support for BSF farming on a manageable and simple scale. It also allows small BSF plants to be built closer to where waste is available, reducing the cost of collecting and transporting waste to a centralized facility.

The roles for blended finance

To emerge as successful businesses in the waste management industry, addressing the issues of consistently producing sufficient volumes, maintaining stable quality levels, and offering competitive prices is crucial. However, this requires capital, with blended finance being particularly critical for businesses to iterate on their models and find the sweet spot that unlocks profitability.

We see three clear roles for blended finance that could bolster the growth of this sector under the archetypes developed by Convergence:

  • Research and Development: Continuous research and development is a vital aspect of creating sustainable BSF models. Specifically, R&D can help in developing substrate mixes that maximize biomass conversion for BSF conversion, as well as stabilizing protein and frass quality for commercial agricultural production. To facilitate these advancements, access to concessional capital is essential in enabling companies to allocate their financial resources towards the operational aspects of their business model. By investing in R&D and securing funding, BSF companies can stay at the forefront of the industry and develop more efficient and sustainable practices.
  • Strategy: Securing subsidized technical assistance can aid BSF companies in refining their business models for optimal financial and impact outcomes. Technical assistance can help companies factor in their team, expertise, markets of operation, sector developments, and other relevant factors to design a business model that best suits their needs.
  • Testing: Once these potential models are established, design-stage grants would be crucial for testing and implementing and scaling them. This support would enable businesses to experiment with various approaches and fine-tune their strategies without facing the risk of significant financial losses.

Scaling Black Soldier Fly processing models can be a powerful way to address a wide range of economic and environmental challenges in Africa. However, this also requires addressing a number of technical, financial, and structural challenges. By leveraging a range of tools and strategies, such as blended finance, public-private partnerships, and technological transfer / innovations, it is possible to overcome these challenges and accelerate the adoption of BSF models at a larger scale.

A win for BSF is not just a win for the companies involved, but also for African food security as a whole.