When operators ask us to model a 200-tonne annual output facility, the first conversation is always about assumptions. A cost model is only as useful as the honesty of the numbers inside it. This post walks through the main cost categories in the model we use for advisory engagements, flags where the numbers are robust, and flags where they are genuinely uncertain.
The fixed cost structure
At 200 tonnes per year of dried mealworm output, the facility we model is roughly 2,800 square metres of rearing and processing space. Fixed costs across a five-year horizon look like this:
- Building lease or annualised build cost: 160,000 to 220,000 GBP per year, depending on location
- Climate control installation (HVAC, humidification): 280,000 to 340,000 GBP capital, annualised at roughly 52,000 GBP over ten years
- Rearing equipment (racks, trays, automated feeding lines): 380,000 to 420,000 GBP capital
- Compliance and certification setup: 25,000 to 40,000 GBP one-time, with 8,000 GBP annual maintenance
- Platform and data infrastructure: 18,000 to 24,000 GBP per year
The range in most of those figures is real. We have seen building costs vary by 35% within a 50-mile radius in the East Midlands alone.
Variable costs per tonne of output
This is where the model earns its keep and where assumptions matter most.
- Substrate and feed inputs: 420 to 580 GBP per tonne of output, the single largest variable cost and the one most sensitive to commodity prices
- Energy (heating, lighting, ventilation): 180 to 260 GBP per tonne, depending heavily on energy contract and insulation quality
- Labour (rearing, processing, QC): 320 to 400 GBP per tonne at UK living wage plus on-costs, assuming 60% automation of routine tasks
- Packaging and distribution: 80 to 120 GBP per tonne for bulk B2B supply
At the midpoints, total variable cost sits at approximately 1,100 GBP per tonne of dried output.
The number that moves a business case is not the cost per tonne. It is the cost per tonne at your actual, realised yield rate.
Where we are uncertain and will say so
Feed conversion ratio is the assumption that most models paper over. We use 2.2 kg of substrate per kg of live larvae as our central estimate, based on our own facility data and a small number of comparable operators who have shared their numbers. Published figures in the literature range from 1.8 to 3.1, and that range translates directly to a 40% swing in substrate cost per tonne of output.
Energy costs are similarly exposed. Our model uses a blended rate of 0.18 GBP per kWh, locked into a fixed contract. Spot prices in 2022 and 2023 were a reminder of what that assumption can do to a P&L if the contract rolls at the wrong moment.
The model is available to advisory clients as a working spreadsheet. We would rather share a model with honest uncertainty ranges than a polished projection that hides them.