- Flybox is shifting focus from alternative protein production to waste management, positioning insects as biological agents for organic waste processing.
- Aligning insect farming with waste management, rather than with food production, is key to achieving viable business economics as the protein output becomes a by-product.
- New technologies, such as FlyBox’s Fortress system, increase efficiency by utilizing larvae-generated metabolic heat, reducing energy costs and accommodating variable waste inputs.
The company’s founder and CEO, Larry Kotch, described China as the benchmark for insect-based systems, largely due to its ability to align economics, policy, and supply chains.
Speaking to AgNavigator, he detailed his experiences visiting China and observing the whole system firsthand.
“I went to China, spent time on the ground, worked with local partners, and ran the numbers. It was by far the strongest model we’d seen. That’s when it clicked: this is what insect farming was supposed to look like.”
In China, lower labour and electricity costs make production significantly cheaper, while strong government backing provides both financial support and regulatory clarity.
Crucially, China has built a coordinated ecosystem, Kotch highlighted.
“China has a really well-developed supply chain – you’ve got national-scale breeders producing larvae, and waste managers just focus on processing. You can basically order any volume you need and get it immediately. It’s a model where everything is coordinated. Supply is always there, so scaling is straightforward.”
Kotch observed that China’s push into insect-based protein was driven by structural food security concerns, making alternative protein sources a strategic priority.
In contrast, Europe does not face the same pressure or urgency to prioritise alternative protein solutions.
“They were selling insect protein at three times the price of fishmeal, and it just didn’t make sense. It doesn’t make sense to build an insect farming startup like it’s an alternative protein company. That model is over,” said Kotch.
Reframing insect farming as waste management
Against this backdrop, Kotch argued that the sector needed to reposition itself as part of the waste management system instead of expensive alternative proteins.
“The venture capital-backed insect farming industry is over. There’s no point setting up an insect farming startup like an alternative protein company anymore. The economics only really make sense when you’re aligned with waste and getting paid to take it – that is key. The protein becomes more of a by-product. That’s the only way the economics work.”
In this model, insects are not primarily viewed as livestock but as biological agents that process organic waste, similar to microbes in anaerobic digestion (AD) systems.
“You should think of the larvae like the bacteria in an anaerobic digester**, and they’re** just performing a waste processing function.”
Kotch added: “If we call it insect farming, you trigger all the farming regulations. If we call it insect waste management, it’s a completely different thing.”
Regulatory challenges
Aside from cost, the other major hurdle is European regulation, which has effectively stacked the deck against insect farming by subsidising AD.
“Europe has already picked a winner, in a way. Anaerobic digestion is their winner, so they subsidise it. They tie up anyone who wants to do anything with waste in regulations that nobody could ever hope to get around, unless you’re a large company. You can’t compete with something that’s been given a leg up, and then you’re being restricted by all the regulations.”
However, policies aimed at banning organic waste from landfill are rapidly increasing demand for treatment capacity, creating opportunities.
“The government banned organics going to landfill without building the capacity, so prices for waste treatment are going through the roof,” said Kotch.
Most importantly, with a more waste‑aligned model, companies will be more resilient to policy bias as they would not need to rely on subsidies.
According to Kotch, FlyBox is highly likely to align itself exclusively with the waste management sector moving forward.
“All of our current pipeline this year, without exception, is waste management companies. There’s a project in the Gulf that’s earmarked to be finished by October this year. There are a number of companies in Europe, strictly in the waste management industry, that we’re working with right now.”
Insect farming 2.0
Over the past year, FlyBox has developed Fortress, which was described as a second‑generation system that can handle variable waste inputs.
Additionally, the system utilises the larvae’s own metabolic heat to avoid the use of climate control.
The layers of the system are structured so that younger larvae are positioned above older ones. As larvae mature, they generate significant heat, which is then used to warm the younger insects earlier in the growth cycle.
“Insects need heat for the first four or five days, but as they get bigger, they start kicking off so much metabolic heat that heat becomes a problem, and you have to dissipate it. If you can recirculate that metabolic heat, it’s a really big plus, and you can save a lot of energy that way.”
With more efficient technology, a better model, and the right players in place, Kotch believed that the sector has passed the “valley of death”.
“I’m more optimistic now than I’ve ever been for the insect industry; I genuinely am. Last year, I was asking myself whether I should just do something else with my life. After going to China and seeing how it really works, it all clicked.”
