We recently received the following inquiry from a student which is representative of many inquiries we have received over the years. We are publishing our response to that inquiry here in the hopes that it may provide some value to others in similar situations!
Question from "Z":
"I am a high school student aspiring to become an entrepreneur in the insect food industry. I was wondering how much a cricket farm cost, the parameters for it, and the dimensions of the rearing system."
Great to hear about your ambitions! Insect protein is set to play a large and growing role providing high quality and sustainable nutrition to people, pets, and livestock around the world.
At this point in time, launching an insect farm in North America (whether crickets, mealworms, or BSF) will require several million dollars and a strong team experienced in agricultural operations, food processing, and sales. You will need to plan for minimum dimensions of 10-20k sqft climate controlled warehouse space for an economically viable operation, and expect at least ~$40k/mo in operating costs.
Realistically the bulk of insect farming will take place outside of the US in Mexico, Central and South America, Africa, and South East Asia.
The good news for an aspiring entrepreneur like yourself is that most value from market in food is captured at the consumer product level (CPG). It is relatively easy to develop and launch a consumer packaged good in your local market and proceed to scale. We encourage you to try developing a product made with insect protein (sourced from established producers) and test it with your friends, family, and local community.
You should start with market research, looking up what insect protein products are out there, and how well they are doing. Their websites often have store-finders, which gives you a glimpse at their distribution reach, and news articles, press releases, and investment data from Crunchbase/anglelist/linkedin/etc. will give you data on the who/what/when of investment and customer successes for those businesses.
Once you have a hypothesis about a potential product and target customer segment, test it! Make a small prototype batch in your home kitchen, get it in front of some representatives of your target segment, and get feedback! What do they think of it? Do they like it? Does it solve a problem or meet a real need in their life? Would they pay real money for it? For example, think about people's need to find healthy and convenient snacks for themselves or their kids or their pets that is sustainable and desirable/delicious.
Learn fast and iterate. Maybe you picked the wrong target audience (test your product with other targets), or maybe you have the right market but need to adjust the product (make it gluten free? Grain free? Different form factor?). Review your feedback, update your hypothesis, prototype and test again!
We particularly suggest looking at developing a pet targeted product - there is significant interest from the big pet food companies (Purina, Mars, Smuckers..) in developing, supporting, acquiring great pet treat and food brands using insect protein.
In most states (if you are US based) you can get started selling product pretty easily by finding a local commercial kitchen to work out of. Your town may have professional commissary kitchens, or you can rent time from churches, schools (your HS?), and community centers that have licensed commercial kitchens on premise. Once you have checked with your local and state health departments for approval, you can legally produce and sell product that you produce and pack in a licensed facility. When you exceed $50k/year in sales, or if you sell across state lines, you will also have to register with the FDA. Around that point you may want to start working with a co-packer to increase your production capacity while you focus on marketing, sales and delivery.
To get started you can source insect protein from sources including Entomo Farms, Aspire Food Group, Cowboy Cricket Farms, Cricket One, BetaHatch, EnviroFlight, and many others. Most suppliers should be willing to provide small volume samples for product development (keep in mind that the unit cost will be high for small orders, ask about bulk pricing to make sure there's a viable path to scale).
Thanks for reaching out, we are always inspired to hear from aspiring entrepreneurs, and we hope these thoughts are helpful as you proceed! We wish you the best of luck as you explore and develop with business idea."