Arari

The world’s population is expected to grow to 9.7 billion people by 2050, and the demand for animal-based food (ABF) will likely surge by 70-80%. This trend poses a significant challenge as meat production alone is responsible for 60% of the greenhouse gas emissions (GGEs) in the food industry. In fact, this number should be even higher when considering the entire meat industry supply chain. Moreover, meat production, both in livestock and fish, is responsible for significant biodiversity loss and constraints on natural environments. This problem is not only limited to emissions; it is also a major concern for global food security, especially in the context of the impending compounded crisis of climate change and the loss of ecosystem services, crucial to sustaining our economic systems.

In addition, two-thirds of cleared land in the Amazon and Cerrado (Brazilian Savannah) biomes have been converted to cattle pasture, making the Brazilian cattle sector responsible for one-fifth of all emissions from commodity-driven deforestation. Moreover, in 2017, Brazil produced 16.3 million tons of soymeal for its domestic market, and more than 90 percent of that became animal feed. From 2013 to 2016, more than 75 percent of all direct soy crop expansion was accomplished via native vegetation clearance in the north of Brazil.

Arari is founded on an innovative principle that aims to tackle the issues of meat decarbonization and deforestation in the Amazon through a combination of a unique business model and the use of insect protein as animal feed. The company envisions itself not only as a viable economic model but also as a social enterprise, engaging with local communities and integrating them into value chains, through the establishment of fair trade principles and equal partnerships. Arari’s main innovation is engaging these communities within the macro agricultural supply chains to produce insect protein. The idea of using insects as feed is not something new, but Arari plans to produce insect-meal at scale, which has yet to be done in the Global South.

Arari’s business model involves engaging smallholder farmers, who have historically been excluded from global value chains, to produce insect protein alongside its proprietary industrial facilities. The company intends to install about 10 sqm of insect production per family, which could produce almost half a ton of feed per month, producing monetary gains for communities through a sustainable, consistent cash flow model. The community engagement within an equal partnership model is central to Arari’s business model, and we truly believe it is a main differentiator to incumbent competitors, that will greatly help scale production.

The company also aims to solve the problem of meat decarbonization and deforestation through both the producer and community stakeholder sides. With over 85 million tons of feed being consumed in Brazil every year, Arari aims to make Brazil one of the world’s largest insect protein producers by 2030. As a first mover in the Brazilian market, the company will have an immense advantage in quickly scaling its business, and taking significant market share.

Arari’s approach builds on existing solutions as it accounts not only for the economic and business aspects of the solution but also for addressing local community needs. We intend to work closely with both producers and underlying communities to better understand how the production process can be improved as well as the suitability and quality of our product. We plan to have a plug-and-play modular system for community producers where they are supplied with the necessary inputs while creating a viable supply chain to absorb their output fully.

Arari aims to engage local communities, especially within the Amazon rainforest and Cerrado (Brazilian Savannah), in the insect-protein supply chain. Scaling up insect-based protein production has been a significant constraint for this burgeoning new industry. As it intends to bring a sustainable solution to animal feed, and with Brazil alone consuming 85 million tons/year of animal meat, the biggest challenges lie in being able to supply the industry with protein at scale. However, the current biggest players within the insect-protein industry have not been able to reach 100,000 tons/year in factory production.

Arari’s business model aims to reach high-scale production by taking advantage of partnerships with smallholder farmers that will be part of a cooperative of suppliers. The company intends to engage local communities, both to raise the supply of insects that can be processed in its future plants as well as to distribute Arari’s animal feed to end consumers (meat producing farmers). We are already in talks with local producers, for the present project we intend to test Arari’s ability to produce alternative protein sources for meat producers. Working with a local organic farm in the Cerrado region, Fazenda Malunga, we intend to engage with the local traditional Quilombola communities (Afro-Brazilian settlements first established by fugitive slaves) that already serve as suppliers for the farm, hoping to learn more from their relationship and engage them in insect-protein production.

Beatriz and Ingrid, both young Brazilian nationals, feel a sense of responsibility in aiding Brazil’s development in a sustainable manner. As a key player in the agricultural industry, Brazil faces the challenge of balancing the needs of its large meat industry with the need to address climate change and biodiversity/ecosystem collapse. Ingrid and Beatriz’ passion for this project stems from their belief that Brazil has the potential to be a leader of the new net-zero carbon economy, and they see Arari as a highly scalable, sustainable, and socially inclusive solution to the pressing issue of decarbonizing food systems.

They first learned about insect-based protein through Beatriz’s mother, who had colleagues at the World Bank working on insect farming in West Africa. The World Bank runs projects to engage smallholder farmers, especially in conflict areas, in insect farming. The project has been successful in reducing the loss of crop and animal production, especially in conflict areas, by providing farmers with a stable supply of both high-protein feed for livestock and biofertilizers, instrumental in maintaining crop yields. As Ingrid and Beatriz learned more about insect farming they saw the incredible potential for sustainable animal feed production in Brazil, and felt the need to start developing this idea.

Arari stands at the intersection of economic and social gains, which has been the focal point that brought Beatriz and Ingrid together. Both of them were interested in beginning a startup venture that would help address climate change, but that could also have a significant social impact in Brazil. Insect farming provides a solution not only for animal feed production but also for decarbonizing food systems. As food waste is for 40-50% of GGE emissions related to the supply chain, ways to upcycle wasted food are paramount, and insects are the perfect solution. Insects consume the food that would go to waste (produce significant emissions), turning it into high-quality protein that can be used as a soy and fish meal substitute.

Beatriz’s experience in founding a real estate investment company and a search fund focused on sustainability, has given her the necessary entrepreneurial skillset and local connections. Her main clients and investors include large players within the Brazilian meat and agricultural industries, from soybean farmers to meat, chicken, and fish producers, giving her a unique perspective on our ideal customer as well as the connections to get the product to market. Furthermore, Beatriz’s mother has worked within the Amazon for the past 30 years, especially in conservation and building relationships with local traditional communities. Ingrid’s father has also worked with deforestation monitoring in the Amazon with satellite imaging and has imbued in her a sense of responsibility to help curb the destruction of this vital biome. Ingrid, an MBA student, brings an important business/culture perspective to the building of Arari.

Their goal is to primarily address the feed market, providing meat producers with a viable, cheap, healthy, and palatable solution for their animals that also aggregates value to their business.

The Arari team has already identified a partnering organization in Brazil to put its pilot into practice. Starting in June, we will be working with Malunga, a chain of organic farms and supermarkets, to develop the pilot insect farm on their property in Brasilia, Brazil. Malunga was created in 1985 in Brasilia by an environmental engineering student called Joe Valle, who was unhappy with the destructive methods used by large-scale agricultural farms in Brazil. With support from his dad, Joe started a small farm right outside Brasilia to put into practice the sustainable production methods he had learned as a student. Today, Joe and his wife, Clevane, manage 120 hectares of organic farms and count with a workforce of 190 employees. Joe and Clevane sell their products in four stores owned by the couple in Brasilia. Joe was also a key player in developing an organic certification for agricultural products in Brazil. Malunga's website can be found here: https://www.mercadomalunga.com 

It is important to highlight that Beatriz Klink, the team lead, is graduating with a Masters in Engineering from MIT this May and will relocate to Brasilia in June where she will be working full-time on the project on the ground. 

The Arari team is working with the Malunga farm in Brazil to create the first insect farm in the Brazilian midwest in June, but we currently do not have an operational insect farm. 

When applying to study at MIT, Ingrid and Beatriz spoke with former students who made them feel welcome at this school even before they stepped into Kendall for the first time. After these conversations, they were eager to come to MIT hoping to become a part of this community in which students support each other’s ventures, share insights about their areas of interest, and show excitement about putting their innovative business ideas into practice. When they first heard about the Solve program, they experienced the same feeling they had first encountered when discussing MIT’s graduate programs with the school's alumni: a desire to become part of a community of solvers who want to provide meaningful change to the world. The financial and mentorship provided by the Solve Global Challenge would be a significant enabler for Ingrid and Beatriz to accomplish Arari's goals; however, they also hope to become part of a community of hard-working and creative individuals who believe in the power of entrepreneurship and innovation in tackling social issues in emerging markets.

Assuming Arari is selected as a Solver, the resources received by the Solve Global Challenge would be primarily used for (A) final PMR trips to conduct in-loco with farmers in Brazil; (B) obtention of the first batch of raw materials; and (C) Produce pilot batch of insect-based protein.

Currently, Venture Capital funding has focused on investments in meat substitutes, which, although laudable, does not solve the true underlying issues. While changes in eating patterns in rich, western countries may continue, the same cannot be said for the Global South. It is unreasonable to believe in a complete substitution of animal-based food (ABFs) in the developing world by 2100. Therefore, efforts to decarbonize ABFs are extremely important for maintaining the climate goals set by the 2015 UNFCC Paris Agreement.

Moreover, somewhat counterintuitively, while humans in the West are engaging in plant-based diets, pets still consume vast amounts of meat. Substituting meat with soy-based pet food, which is currently the norm, has been shown to be highly detrimental to their health, whereas insects have been proven to better gut health and boost the immune systems of both cats and dogs. Aside from trying to redefine consumer habits through plant-based meat alternatives and offsetting meat production emissions, not much has been done to address this issue. Small incremental solutions have been suggested, such as contraptions and feed additives to reduce cow’s methane emissions, but little has been done to significantly decarbonize the industry.

The major player in the space today is InnovaFeed, a French-based startup that has been building insect-producing factories across Europe as well as one plant in the US. This is the only company actively pursuing insect-based protein as a substitute for soy and fishmeal in animal feed at scale. To date, they have been able to raise over 450M USD in venture capital backing and have gained the attention of agro-giants such as Monsanto and Cargill. Arari plans to be a direct competitor to InnovaFeed, and dominate the Brazilian market, which is the 2nd largest meat producer in the world only after the USA, expanding its business alongside local communities.

Although previous solutions have harnessed the benefits of insect farming as an alternative source of protein for animal feed, players in the space have missed the great opportunity to ally other elements that are intricately connected to this all-encompassing approach to meat decarbonization (such as engaging with local communities). Brazil gives Arari the unique opportunity to provide a sustainable alternative to soy and fishmeal for animal feed, while directly contributing to stopping the advancement of deforestation in the Amazon and in Cerrado.

As there is only one significant player in the space today, the industry is still welcoming incoming players. Moreover, previous solutions forget to consider other important aspects like geographical location. For example, keeping 1 hectare of the Amazon rainforest from being repurposed is highly different from doing the same in Europe or the US. Biodiversity and carbon are increasingly seen as instrumental building blocks of the ecosystem services on which our society fully depends.

Arari's timeline for the next year is the following:

- June 2023: Finalize in loco research with farmers in Brazil.

- July 2023: Start building a facility for insect farming at the Malunga farm.

- August 2023: Obtain raw materials to produce the first batch of animal feed with the Malunga team.

- August/September 2023: Develop sustainable packaging for the first batch of insect-based protein and a sustainable supply chain for product distribution. 

- October/November 2023: Produce the first batch of insect-based feed, hoping to sell products to clients before January 2024. 

For the first three years, Arari's goal is to primarily address the feed market, providing meat producers with a viable, cheap, healthy, and palatable solution for their animals that also aggregates value to their business, making it sustainable and potentially net-zero (which has been proven to generate increased financial gains by adding a premium to product value). In the next five years, we plan to expand into the pet-food market, biofuels, and even insect protein for human consumption.

Indicators:

- Local community surrounding the insect farm understands the impacts of insect-protect meal for the protection of the Brazilian environment;

- Brazilian congress starts providing federal incentives for projects hoping to decarbonize the meat industry and reduce the reforestation of the Amazon and of Cerrado;

- Local community surrounding Arari's insect farms learns how to start their own insect farming capabilities. Outcomes from their production can be sold to the Arari team, which will facilitate the increase in insect-based meal production in Brazil;

- Arari team can quantify the reduction in emitted greenhouse gases with the substitution of soymeal for insect-based meal using the metrics developed by the World Bank; and 

- Reduce the adverse per capita environmental impact of meat eaters in Brazil and in countries that purchase Brazilian meat.  

According to the World Bank, by substituting soybean with protein obtained from black soldier flies, global warming potential (GWP) is reduced by at least 10%. Similarly, when broilers are fed with insects, the GWP impact is reduced by up to 22%. In addition, a cricket farm only requires two liters of water per gram of produced protein. For comparison, livestock requires 112 liters of water to produce one gram of protein. Finally, the World Bank also affirms that, when farmed animals are fed with insect-based protein, there is a 56% decrease in total land requirement.

Arari’s goal is to establish the first insect farm in the Brazilian mid-west, where it will be closely located to most meat producers in the country. At the farm, insects will be converted into insect meal for livestock feed, akin to commonly used fish and soy meals, that will be transported to farms across the country. Our insect farming efforts require an extremely small plot of land in Brazil. A single square foot can harbor more than 5,000 crickets producing 10 pounds of protein. Insects farmed by our team will include black soldier flies, mealworms, and field crickets. In addition, our team will produce biofertilizer, made from insect farming waste, which has a comparable nutritional value as traditional fertilizers but with a fraction of the energy and fossil fuel requirements. Our production of animal feed and biofertilizers will lead to a fully circular business. 

The Arari team is following the exact guidelines described by the World Bank Group in its project report, "Insect and Hydroponic Farming in Africa".

Arari is formed by two young Brazilian female business leaders who are acting in one of the most male-dominated industries in Latin America: farming. Our goal is to continue to hire women for positions of leadership in the company and to work with indigenous and local communities in Brazil to empower them to utilize insect farming to increase their financial surplus. 

As a means to protect Brazilian biodiversity and forests, it is essential to engage its people in global value chains that allow them to gain output from keeping the forest standing. From indigenous communities who are the true guardians of the forest and must have the right to keep and care for their own land, to small producer communities. Brazil, and the rest of the world, need to start attaching a monetary value to nature-based services, and Arari is a step in the right direction, aiming to include and involve these stakeholders in developing a profitable business that can generate income and allow them to participate in global supply chains.

Arari’s goal is to establish the first insect farm in the Brazilian mid-west, where it will be closely located to most meat producers in the country. At the farm, insects will be converted into insect meal for livestock feed, akin to commonly used fish and soy meals, that will be transported to farms across the country. Our insect farming efforts require an extremely small plot of land in Brazil. A single square foot can harbor more than 5,000 crickets producing 10 pounds of protein. Insects farmed by our team will include black soldier flies, mealworms, and field crickets. In addition, our team will produce biofertilizer, made from insect farming waste, which has a comparable nutritional value as traditional fertilizers but with a fraction of the energy and fossil fuel requirements. Our production of animal feed and biofertilizers will lead to a fully circular business.

Our solution will be monetized by selling our animal feed to meat producers for prices lower than the animal feed available in the market. Currently, 20kg of animal feed is sold for 150 reais (around 30 USD) in Brazil. Our company aims to reduce this cost to 120 reais (around 24 USD).