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A sustainable business model for Black Soldier Fly production in the feed supply
chain: Exploring business models for a farming transition with Black Soldier Fly

Conference Paper · June 2023

DOI: 10.26481/mup.2302.44

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Maastricht University Press • New Business Models Conference
Proceedings 2023

A sustainable business
model for Black Soldier Fly
production in the feed
supply chain
Natalia Naranjo-Guevara1 Jean Louis Steevenz Sonja Floto-Stammen
1Fontys University of Applied Sciences

Maastricht University Press

Published on: Jun 21, 2023

URL: https://pubpub.maastrichtuniversitypress.nl/pub/lyg5tcd4
License: Creative Commons Attribution 4.0 International License (CC-BY 4.0)
Maastricht University Press • New Business Models Conference A sustainable business model for Black Soldier Fly production in the feed
Proceedings 2023 supply chain

Natalia Naranjo-Guevara *, Jean Louis Steevenz, Sonja Floto-Stammen

Research Group of Business Innovation, Fontys University of Applied Sciences. Tegelseweg 225; 5912 BG
Venlo, The Netherlands

*nnaranjoguevara@fontys.nl

Abstract
To propose sustainable opportunities to traditional farmers in the Netherlands to face challenges such as
increasing CO2 emissions, nitrogen deposition, and rising prices in production, this study investigated a
sustainable business model for Black Soldier Fly production in the feed supply chain. First, the value chain and
stakeholders in the emerging BSF farming industry were identified. Information collected through secondary
research was then analyzed through the Triple Layered Business Model Canvas tool. The proposed model
could be applied by traditional farmers in order to innovate in the transition to more sustainable protein
production. To reach such sustainability engagement with all stakeholders can help strengthen the value
propositions, in a multi-stakeholder value model. Finally, the risks and opportunities of the proposed BSF-
production business model are discussed.

Keywords
Alternative protein production, Business innovation, Sustainable food production, Triple Layered Business
Model Canvas

Introduction
The Netherlands is one of Europe’s largest livestock industries, with more than 100 million cattle, chickens and
pigs. The country is also the EU’s biggest meat exporter (The Guardian, 2019). However, this industry has
been facing some challenges in recent years caused by agricultural and farming practices, such as excessive
nitrogen deposition. The overabundance of nitrogen can be harmful to both nature and public health (Ministry
of Agriculture, Nature and Food Quality, 2019). To address this issue, the Dutch government has implemented
measures that require farmers to reduce their nitrogen emissions (RIVM, 2020). This includes limiting the
number of animals that can be raised on a given piece of land. On the other hand, the rising of energy and
production costs raises the costs of output, raise prices of agricultural products, and reduce farm profitability
(Sands and Westcott 2011), making it more difficult for the sector to opt for more sustainable practices.

One possible solution for farmers is to find alternative protein sources that do not release nitrogen, are cheaper
in production and require less energy input. Insects are seen as a promising option for providing high-quality
protein in large quantities (Makkara et al., 2014). Insects have low substrate requirements, fast growth rates

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Maastricht University Press • New Business Models Conference A sustainable business model for Black Soldier Fly production in the feed
Proceedings 2023 supply chain

and high feed conversion rates and are therefore considered to be efficient (Oonincx et al., 2010). In addition,
they can be used as a feed component for livestock instead of soybean protein (Van Huis et al., 2013). One
insect species that have been identified as a potentially profitable candidate to revolutionize agribusiness is the
black soldier fly, BSF (Hermetia illucens). BSF larvae are a highly nutritious animal feed ingredient for
livestock. Additionally, BSF could be used for organic waste management as they efficiently convert food
waste into valuable protein (Barragán-Fonseca et al., 2022). Insect farming provides an innovative business
model, that would improve the performance of agri-food systems, from an economic, environmental and social
perspective (Madau et al., 2020).

To effectively use these opportunities, it is necessary to develop strategies to enable traditional farmers to re-
design their existing farm model. For this reason, the goal of this study is to develop a business model that
allows the identification of the key stakeholders and addresses the environmental and societal challenges in the
BSF value chain. The proposed model could be adapted to a traditional farm, providing the farmer with an
extra income for the production of alternative proteins, as well as supplying their own ingredients for their
livestock feed in a sustainable (economical, environmental and social) way.

Methodology
In this study, the value chain and stakeholders in the emerging BSF farming industry are identified, in order to
create a sustainable business model for BSF production. For that, we conducted a qualitative exploratory study
through secondary research (such as academic papers, newsletters from companies in the sector, grade reports
from students who have worked in companies within the sector). The collected information was analyzed
through the Triple Layered Business Model Canvas tool in order to bridge business model innovation and
sustainable business model development according to, Joyce and Paquin (2016). This tool provides an
economic, environmental and social perspective from the classic Canvas Model. Finally, the risks and
opportunities of the proposed BSF-production business model are discussed.

Results and discussion

Insect-feed (BSF) value chain

The BSF value chain refers to the process by which BSF larvae are raised and processed as ingredients into
feed for animals. This process can efficiently supply protein in a circular production system (Dicke, 2018).
BSF larvae can be raised on organic waste, such as food scraps and agricultural by-products (Huis et al., 2020).
That is possible due to their ability to convert side streams into biomass rich in fat and protein (Surendra et al.,
2020). The value chain typically includes several stages, including insect production; harvesting and
processing; byproducts obtention (such as frass which can be used as fertilizer in sustainable agriculture
(Barragán-Fonseca et al., 2022)); distribution and sale; fodder (insect feed is consumed by animals such as
chickens, fish and pigs); food (animal products such as eggs or meat are purchased by wholesalers, retailers,
supermarkets and consumers).

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Maastricht University Press • New Business Models Conference A sustainable business model for Black Soldier Fly production in the feed
Proceedings 2023 supply chain

Actors involved
Insect farmers represent the 'focal firm' of the here described insect industry value network. The focal firm is
defined by Frostenson and Prenker (2015) as a company that rules the supply chain, provides direct contact
with customers, and designs products or services that are offered. The insect farmer is at the centre of the value
chain and plays a critical role in ensuring the success and sustainability of the overall business model. The
success of the BSF business model is heavily dependent on the insect farmer's ability to produce a consistent
and high-quality supply of larvae.

Feed producers are the customer of the processed insects. They are intermediary actors of the BSF business
model. The producer must adapt to the focal firm's innovation before it reaches the end customer. Regarding
the market for insect protein, currently, the aquaculture sector is the most relevant (Sogari et al, 2019). The
intangible resources of feed producers are nutritional and customer knowledge. The end customer is
influencing the demand and products of the feed producer. They create demand on the customer's side. Besides,
the feed producers act as a consultancy for their customers (farmers) regarding the best feed for their animals'
efficient growth. Their customers are not demanding insects in the feed yet, so they have no pressure to bring
this product to the market yet (Fanter, 2020).

Waste management companies provide the substrate on which the BSF can be grown (Surendra et al 2020). In
this way, companies also help to reduce greenhouse gas emissions and other environmental impacts associated
with waste disposal. Moreover, they can generate revenue by selling processed waste as feedstock.

Animal farmer represents the target segment in this model, including the aquaculture, pig and poultry sectors
since these are the relevant markets for BSF. Until 2015, only 25% of farmers indicated an intention to use
insects as feed (Verbeke et al. 2015). Nevertheless, an increased use of insects in Europe as a replacement for
conventional animal-derived proteins for aquaculture and soybean is expected to (Gasco et al. 2020). The main
resources of these actor segments are the animals and knowledge about consumer demand. The farmer creates
demand for the feed producer. This demand is triggered by the end-consumer, costs and/or legal requirements.
Currently, the dependence of animal farmers on 'insects as animal feed' is minimal. The dependence will
increase if the demand rises and could be stronger as soon as insect feed has to be produced at a consistently
high volume due to demand (Fanter, 2020).

EU government is the current legislative framework. The European Food Safety Authority (EFSA), represent a
source of scientific advice and communication on safety risks associated with the food and feed chain. The EU
government's core activity as a stakeholder in the insect-feed sector is the development and adjustment of laws
and directives to enable the agro sector to produce safe and competitive food. Recently, the European Food
Safety Authority (EFSA) has expanded the acceptability of insects as a feed source, not only for fish but also
for poultry and pigs in the European Union (EFSA, 2017). This expansion of the use of insects as feed opens
up new possibilities for the use of insects as a protein source in the animal feed industry.

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Maastricht University Press • New Business Models Conference A sustainable business model for Black Soldier Fly production in the feed
Proceedings 2023 supply chain

Actors and relationships

To visualise the relationships between the involved actors a simplified Network tool was drafted. The figure is
helpful to describe the BSF model particularly because collaboration between the involved actors is necessary
in order to achieve the common goal.

Farmers provide organic waste to feed BSF larvae to rear it on their farms. They obtain insect products and
byproducts. Waste management companies, provide the necessary infrastructure for the breeding and
processing of larvae. In addition, they collect organic waste from farmers and other sources. Feed producers,
process the larvae to obtain protein powder and fats as feed ingredients for livestock and fish. Animal farmers,
use such products as feed for their livestock and fish, potentially reducing their dependence on traditional
protein sources. Finally, EU government agencies, regulate and monitor the BSF production industry, providing
incentives for sustainable and environmentally-friendly production methods.

Sustainable business model

According to Jonker and Faber (2021), organizations are rarely able to organise value creation, delivery and
capture on their own, because without exception, organisations work in a chain of suppliers, buyers and
partners. In contrast to conventional business model innovation, which focuses on economic value creation for
customers and direct stakeholders, sustainable business model innovation ties the concerns of a broad spectrum
of stakeholders and multiple forms of value together in reorganizing their business models (Chesbrough, 2010;
Jonker & Faber, 2021). A sustainable business model for a farm balances economic, social, and environmental
sustainability to meet the needs of the present while preserving the ability of future generations to meet their
own needs. For this case study the triple-layered business model canvas is used as it includes ecological and
social values (Joyce & Paquin, 2016). The proposed sustainable business model for BSF is based on the
conversion of organic waste into high-quality protein using the BSF larvae (Fig 1).

Fig 1. Triple Layered Business Model Canvas tool

The Triple Layered Business Model Canvas tool provides a comprehensive framework for designing and
analyzing a business model that incorporates social, environmental and economic sustainability. Using this tool
to describe the BSF business model highlights the interdependence and synergy between the three
sustainability layers. The economic layer emphasizes the importance of generating revenue, reducing costs, and
creating value for customers and investors (Joyce & Paquin, 2016). The environmental layer focuses on
reducing waste, promoting resource efficiency, improving ecosystem health, and promoting biodiversity. This
aligns with the concept of the circular economy, which emphasizes the importance of reducing waste and

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Maastricht University Press • New Business Models Conference A sustainable business model for Black Soldier Fly production in the feed
Proceedings 2023 supply chain

promoting resource efficiency (Kirchherr et al, 2017). Finally, the social layer emphasizes the importance of
creating value for local communities highlighting the role of local community engagement in promoting
sustainable business practices (Palomares-Aguirre et al, 2018). By considering all three layers, the tool
provides a holistic approach to designing and analyzing a sustainable business model that can deliver long-term
benefits for the economy, the environment and society.

To address environmental and societal challenges, businesses and their partner organizations may need to
develop new competencies and activities; constrain or shift their position in the value chain; or even adjust
their organizational purpose. This requires an understanding of organisational boundary alignment, which is a
highly challenging process for businesses (Velter et al., 2020). Velter et al. (2021) conducted a case study that
delved into how a company engaged in boundary work, and the study revealed that there is no set formula for
developing a sustainable business model. Rather, it involves a collaborative process of exploring and
negotiating value opportunities within each stakeholder's organizational boundaries.

Oportunities and risks

The market for BSF and its applications is growing rapidly, driven by increasing demand for sustainable and
environmentally friendly protein sources. The insect industry has grown in the global market, mainly in Europe
and the United States and is on track to become a successful protein resource that will lead the global market
(Kim et al., 2020). It is expected to reach a volume of 730,000 tons and USD 8 billion in 2030
(Alliedmarketresearch, 2019). The forecasts of the market research institutes show an optimistic double-digit
market growth for the next few years.

However, there are also several risks associated with the implementation of the BSF-based business model.
Among them, the cost of larvae production at a commercial scale are substantially higher than other protein
sources, such as soy and corn (EFSA, 2020). Additionally, there still is uncertainty about ensuring consistent
quality and supply volumes for customers, as well as regulatory issues surrounding their use as a feed
ingredient (EFSA, 2020).

Conclusions
Adopting a BSF-based business model holds promise for promoting sustainable agriculture and reducing
environmental impact. Specifically the increased demand of protein as feed and food due to a growing world
population and global meat production will fuel the debate for alternative protein sources. Political, economic,
social, and cultural challenges must be considered, along with stakeholder engagement, to choose the right
approach. Realizing the triple transition towards sustainability requires the development of new business
models. We have seen however that one important aspect to reach sustainability potentially is the engagement
with all stakeholders to be able to develop multi-stakeholder value propositions. More research and
development are needed to address the commercialisation risks.

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Maastricht University Press • New Business Models Conference A sustainable business model for Black Soldier Fly production in the feed
Proceedings 2023 supply chain

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