From Maggots to Millions – How AgriProtein, A South African Business, is Making Amazing Products from Maggots
Written by smallstarter InspireMe! Saturday, 18 October 2014 16:54
Photo credit: ebaumsworld.com
In South Africa, one young business is
doing the unthinkable. AgriProtein is breeding billions of flies on a
farm to mate, lay eggs and produce maggots. Yes, maggots, those horrible
looking creatures that are likely to make you want to vomit. These
maggots are fed on organic waste material - producing a nutrient-rich
fertilizer in the process - before being harvested and dried into a
natural and sustainable animal feed. AgriProtein’s maggot-based animal
feed is more than 15 percent cheaper than other alternatives and has
been proven to be highly nutritious for livestock, especially chickens (poultry), fish and pigs.
The company recently attracted more than $10 million in capital to
build more fly farms in South Africa. This article reveals the lucrative
aspects of this business and why it’s a multi-million-dollar idea. I’ll
also show you how AgriProtein successfully grows its maggots and three
key lessons you should learn from the success of this business.
Why should anyone be interested in the animal feed business?
Many of you reading this may be wondering
why AgriProtein is going through the hassle of raising maggots to target
the animal feed market. Do you have any idea how huge the animal feed
business really is? Allow me to break it down for you…
Before a piece of beef, chicken or pork
ends up on your plate, it was fed on animal feed to produce the meat
that now sits on your plate. Animal or ‘livestock’ feed, like human
food, is a booming international business.
In June 2013, I wrote an interesting article about the huge opportunities in the billion-dollar animal feed business. The growing demand for meat and fish worldwide is driving up the demand for animal feed used by livestock farmers to grow chickens (poultry), fish and pigs.
The amount of money spent on animal feed every year is huge because on
average, farmers around the world spend between 45 to 75 percent of
their total costs on animal feed alone.
The international trade in animal feed has
an estimated turnover of nearly $400 billion every year. Despite
Africa’s huge demand for animal feed, it produces less than one percent
of global animal feed output. The small amounts we produce locally are
not enough to satisfy domestic demand. As a result, the African market
currently depends heavily on imported feed from the USA, Europe, South
America and Asia (especially China).
AgriProtein wants to shake up the
international animal feed business by producing a cheaper and more
valuable product that will help farmers around to world to make extra
profits by reducing some of their feed costs. This is definitely a
product that will interest farmers around the world who have been
suffering the burden of rising animal feed prices for many years. If
AgriProtein can pull this off in the $400-billion animal feed market,
the company could easily be worth millions of dollars in just a few
years.
Why maggots?
I know what you’re thinking and I totally
agree with you; maggots are very disgusting and the sight of them could
easily make me vomit. But to a chicken or fish, for example, maggots are
a juicy treat. Apart from its good taste, maggots are very nutritious
and rich in proteins, a vital element in every animal feed. Proteins are
important because they are a critical component in developing muscles
in these animals which eventually become the meat that we humans eat.
Interestingly, maggots are hardly, if ever,
used in animal feeds that are used by livestock farmers around the
world. For decades, proteins in animal feed have come from two main
sources: Soybeans and Fishmeal. I’ll
use the next paragraphs to take a quick look at these two protein
sources and how important they are to the global animal feed industry.
Soybean
is the major source of plant protein for animals. About 85 percent of
the world’s soybean crop is processed into meal that is used in animal
feed. Only about two percent of the soybean meal is further processed
into soy flours and proteins for human food use. The problem with
soybean is that cultivating the crop requires a lot of land and water,
and the intensive monoculture involved is creating adverse environmental
impacts on our planet.
Worse still, as you will notice in the
chart below, the price of soybean has risen sharply over the last
decade. This means that farmers have been paying a lot more to buy
animal feed that contains sufficient protein (soybean) to grow their
livestock to market size.
In recent years (2002 – 2014), the price of soybean has skyrocketed beyond all levels in history. (source: crops.missouri.edu)
Fishmeal
is the major source of animal-based protein for livestock. More than 20
percent of fish caught in the seas and oceans are crushed and processed
into fish meal which is added as a protein provider in animal feeds.
This fishmeal is fed to pigs, cattle, poultry and farmed fish. Fishmeal
has remained a popular ingredient in animal feed because of its high
protein content (it actually contains more protein than soybean). image credit: tradeindia.com
The problem with fishmeal is that natural
fish stocks in the oceans are reducing drastically across the world. Due
to overfishing and the negative effects of climate change, using our
fish stocks as a source of raw materials for the animal feed industry is
no longer sustainable under the current conditions. If we continue to
harvest fish from the seas and oceans at the current rate, we could run
out of fish in less than 30 years. Evidence of this scarcity is already
showing in the price of fishmeal on the international market. From 1999,
the price of fishmeal rose from less than $500 per metric ton to over
$2,000 in 2012. That’s a 500+% growth!
The steady rise of fishmeal from 1999 to 2014 has led to high animal feed costs for livestock farmers across the world (source: UndercurrentNews)
Maggots,
unlike Soybean and Fishmeal, are very new to the scene as a suitable
source of protein for animals. They are very rich in proteins and
contain a wide range of amino acids and minerals that provide the
necessary nutrition for livestock growth. The best part is, producing
insect-based protein (maggots) doesn’t come with the adverse
environmental consequences of producing animal protein (fishmeal) and
plant protein (soybean) which require more land, water and energy
resources.
Unlike the prices of soybean and fishmeal
which are currently going through the roof, maggots are abundant and
readily available. As long as you have organic waste, maggots can
literally be ‘farmed’ in your backyard. This outcome will help farmers
to save costs on animal feed while providing their pigs, poultry and
fish with high-value protein. (image credit: theblaze.com)
The Amazing Unique Selling Propostion for Maggots
For any new product to succeed in any
market, especially an established one like the animal feed industry, it
needs to have a Unique Selling Proposition (USP) that makes it different
and preferable to other products already on the market. Interestingly,
Agriprotein believes that it has a strong USP that will revolutionise
the international animal feed business.
According to AgriProtein’s infographic
below, for each ton of fishmeal or soybean replaced by its maggot-based
products, an environmental saving of between $2,550 and $3,250 per ton
is achieved in the form of avoided fossil fuel consumption , land use
and carbon emissions.
The Smart Guide to Maggot Farming – The AgriProtein Way
AgriProtein’s facility in Cape Town (South
Africa) is the world’s largest fly farm and houses roughly 8.5 billion
flies that produce more than 20,000 kilograms of maggots every day. To
feed the army of maggots it produces, the farm collects over 100 tons of
organic waste every day. This includes leftover and uneaten food from
restaurants and hotels, blood and waste from abattoirs and animal
manure.
Within
the farm, the flies are kept in over 300 cages that are designed to
maximise mating. Within these cages, the temperature, humidity and
lighting are closely controlled to encourage the flies to mate and lay
eggs. A single fly can lay up to 400 eggs in a single day. Every day,
the eggs are gathered from the cages and hatched in a separate place. Image credit: eadt.co.uk
As the maggots grow, they feed on the
organic waste and convert it into protein. In fact, their growth rate is
astounding; maggots increase in size nearly 5,000 times in the span of
just a few weeks. Their fast growth and efficient conversion of waste to
protein is the biggest miracle in the entire process. These maggots
recycle smelly organic waste (like blood and animal manure) into
odourless humus that can be used as fertilizer to replenish farmlands.
After feeding on and digesting waste for a
couple of weeks, the maggots reach the optimum size for harvest and are
separated from the residue. Afterwards, they are washed, dried and
crushed to extract oil, which is very rich in fatty acids. The rest is
milled into a flaked product that is packaged and sold to animal feed
mills.
At the end of the process, these are the four main products that emerge as AgroProtein’s market brands:
MagMeal™
This is the core product consisting of dried and defatted maggots that are ground into a high protein meal. It has a dark rich texture with a slightly nutty flavour. MagMeal can be blended into a variety of animal feeds and used just like any other protein such as fishmeal, its nearest nutritional equivalent. It is specifically useful for the feeding of monogastric animals including chickens, pigs and fish.
This is the core product consisting of dried and defatted maggots that are ground into a high protein meal. It has a dark rich texture with a slightly nutty flavour. MagMeal can be blended into a variety of animal feeds and used just like any other protein such as fishmeal, its nearest nutritional equivalent. It is specifically useful for the feeding of monogastric animals including chickens, pigs and fish.
MagOil™
This
is the purified fat removed from the maggots and has a high
palatability for animals. It has a light golden brown colour with a
medium viscosity at room temperature. MagOil™ can be blended into a
variety of animal feeds as any other animal or vegetable fat or oil.
This
is the purified fat removed from the maggots and has a high
palatability for animals. It has a light golden brown colour with a
medium viscosity at room temperature. MagOil™ can be blended into a
variety of animal feeds as any other animal or vegetable fat or oil.
MagSoil™
This is the residue that is left after the maggots have recycled the nutrients in the organic waste. It is a fine and homogenous soil enhancer that is high in bio‐available nitrogen, minerals and nutrients. Farmers use MagSoil™ as an organic fertiliser to improve their soils.
This is the residue that is left after the maggots have recycled the nutrients in the organic waste. It is a fine and homogenous soil enhancer that is high in bio‐available nitrogen, minerals and nutrients. Farmers use MagSoil™ as an organic fertiliser to improve their soils.
Whole Dried Larvae™
This is simply de-hydrated maggots that are supplied in bulk to the pet food industry and small organic farmers. It can be fed to insect-eating reptiles and birds. It can also be used as a protein and energy source in formulated diets for monogastric animals like chickens, pigs and fish.
This is simply de-hydrated maggots that are supplied in bulk to the pet food industry and small organic farmers. It can be fed to insect-eating reptiles and birds. It can also be used as a protein and energy source in formulated diets for monogastric animals like chickens, pigs and fish.
What’s next for AgriProtein?
AgriProtein’s
products have been approved for sale in South Africa and the company
expects to secure distribution licenses in the European Union within the
next two years. Product approval is being considered on a
state-by-state basis in the U.S. and Canada, with Ohio already having
granted permission for them to be sold.
In terms of funding and expansion, the
company has received more than $10 million to build more fly farms in
South Africa. It intends to build another 38 fly farms across the world
and has had expressions of interest from over 40 countries. In fact, the
German government has offered AgriProtein one million Euros to set up a
plant in Germany. In the long run, the company plans to license its
proven technology for industrial-scale maggot production to similar
farms across the world.
Here’s a short documentary featuring David
Drew, Co-founder of AgriProtein as he runs through the science of the
business and its considerable social and environmental impact. It’s very
interesting and you’ll learn quite a lot from it.
3 Key Lessons to learn from the success of AgriProtein
We love to share success stories on
Smallstarter but what’s most important for you, the reader, is to learn
and apply the key lessons that led to success in all the stories. We
have identified three key lessons from AgriProtein’s journey to success
and we hope you learn something from them. Here they are:
1. Always think long term
Many entrepreneurs rarely take the time to
digest and polish a business idea to make viable for the long term.
David Drew and his partners at AgriProtein first had the idea for
maggot-based animal feed in 2004. However, to solidify their business
idea, they knew it had to be backed up by sufficient scientific and
business evidence to make it investible.
To achieve this, they partnered with the
University of Stellenbosch, South Africa and sponsored Masters and PhD
level students to provide cutting edge research in the innovative field
of nutrient recycling and animal nutrition under the guidance of the
University.
After five years of parallel academic and
manufacturing research, AgriProtein was finally ready to launch its
business plan on an industrial and commercial scale. Today, its long
term thinking has paid off and the company is on track to great and
astounding success.
2. Work with the right partners
Working with the right partners can bring a
lot of value to a new business. The right partners can provide access
to capital, customers, promotion and even important market data.
AgriProtein’s partnership with the University of Stellenbosch, South
Africa helped to provide the critical research, analysis and credibility
that has helped the company.
AgriProtein also enjoys a strategic
partnership with the Bill & Melinda Gates Foundation and has
received financial assistance from the Foundation to support its work.
3. Green business ideas can be profitable too
The threat of climate change and its
adverse effects on the environment has made green business ideas very
attractive to investors, governments, NGOs and even consumers. Any
business idea that promotes recycling of waste, protecting the
environment or harnessing natural and renewable energy sources has a
high likelihood of success in today’s world.
Popularly
known as ‘Mr. Rabbit’ in Kenya, Moses Mutua grew up in a poor family
and couldn’t further his education because his family couldn’t afford to
pay for it. Although he always wanted to become a policeman, he never
reached that dream. Instead he got a job as a security guard and worked
at it for five years before he got fired.
The growing rate of heart disease and related ailments has increased awareness of the harmful effects of 
Rabbits
don’t need any elaborate preparation or huge capital to start up. You
can start with two rabbits (male and female) using a basic cage made of
wood and chicken wire. Unlike chickens, cattle and pigs, rabbits are not
noisy animals. They are very clean animals and don’t easily get
attacked by diseases. Above all, rabbits don’t require a lot of space
like other livestock; it’s the ideal animal to raise in your backyard or
any place with little space. 
This
article has shown you how three rabbit farmers in different parts of
Africa achieved remarkable success in the rabbit farming business. We
also looked at three reasons why more African entrepreneurs should
consider joining the rabbit farming business. And finally, we shared
some valuable resources that would help you get started as soon as
possible. 