Techno-Economic Assessment of APS-Based Poultry Feed Production with a Circular Biorefinery Process

Abstract

Poultry livestock profitability significantly depends on feed, accounting for 60–70% of the total production cost, of which protein sources are among of the most expensive ingredients. The maintenance of profitability while meeting feed demand and reducing the environmental impact represents a considerable challenge driving research of alternative protein sources (APS), such as insects and algae meals. This study employs, for the first time, techno-economic assessment (TEA) methodology to evaluate the technological performance and the industrial feasibility of an APS-based poultry feed production method based on the valorization of the pre-treated organic fraction of municipal solid waste (OFMSW) as a substrate for Hermetia illucens larval growth and microalgae cultivation. The Excel-based analysis, which evaluated the mass and energy balance as well as the income statement, was integrated with a thematic analysis focused on exploring how the overall value attributed to the sustainability concept is reflected in the willingness to adopt sustainable business models by entrepreneurs in the poultry sector. Despite the ability to generate revenues, the model cannot be said to be profitable for animal feed production due to the strong dependence of its profitability on scale economy logics. Enabling solutions could be derived from the recovery of abandoned infrastructures, government financial incentives, and integrated systems associating OFMSW treatment with poultry farming, thus resulting in marked economic sustainability and profitability: key elements from the poultry entrepreneurs’ point of view.

1. Introduction

According to the latest United Nations projections, the global population is set to reach 9.7 billion in 2050 [1], leading to a 60% rise in food demand and a 70% growth in the consumption of animal-origin products [2]. With a constantly growing trend, meat production has tripled over the past 50 years [3] and is projected towards 347 Mt by 2030, with poultry meat accounting for 52% of the global volume [4]. Livestock farming profitability significantly depends on feed costs, with them accounting for 60–70% of the total manufacturing cost [5], of which proteins are one of the costliest items in formulations [6]. With a relatively high protein content (44–49% [7]), soybean meal dominates the protein ingredient market. The repeated use of pesticide and fertilizer applications makes this type of cultivation environmentally harmful, lowering biodiversity and damaging ecosystem services [8,9].

European import dependency makes the livestock sector highly vulnerable to possible trade distortions, sustainability problems, scarcity, and the price volatility of soybeans on the global market [10]. Research on APS [11] is driven by considerable challenges, among which the priority to maintain livestock profitability and, at the same time, meet food demands and reduce the environmental impact of production and consumption patterns stands out.

Insects and algae meals are among the most promising APS in animal feed replacing fish and soybean meal thanks to their low ecological footprint, high conversion efficiency, biomass quality [12], and protein content (ranging from 40% to over 60%) [13,14,15,16,17]. In the poultry sector, most studies have involved broilers fed with a diet composed of 25% of housefly larvae meal, demonstrating no adverse effect on weight gain, feed intake, and feed efficiency [17]. Furthermore, insect-based bioconversion has been proposed as a marketable solution to reduce food waste by efficiently converting several tons of food waste into high value-added products, such as animal feed, fertilizers, and secondary industrial compounds [18].

Recent studies have focused on insect farming profitability showing its inefficiency due to the high costs of raw materials for insects’ feeding [19,20]. Even though the current European legislation only authorizes insects’ rearing on materials of vegetable origin and certain materials of animal origin, insects can grow efficiently on bio-waste and by-products [21,22]. Until now, no studies have performed a TEA of a poultry feed production model based on the maximization of material flows with a zero-waste circular biorefinery perspective in a local dimension. A TEA involves the modeling of an industrial process to evaluate its technological performance and economic feasibility, supporting decisions in research, developments, and investments [23].

Therefore, this study aimed to verify the industrial feasibility of producing APS-based poultry feed based on the valorization of the pre-treated OFMSW as a substrate for Hermetia illucens larval growth and microalgae production. The model under study—henceforth called “Smart Feed”—proposes a closing resources loop where the anaerobic digestion of OFMSW is combined with electrical and thermal energy from biogas, the valorization of anaerobic digestate (through the production of biomass of microalgae and composting), and the production of Chlorella spp. through the recovery of liquid anaerobic digestate. In particular, the Smart Feed model is the result of a project funded by a private banking foundation with the scope of validating at laboratory scale and in a controlled environment a novel feed formulation with high nutritional value by exploiting the pre-treated and selected OFMSW. Starting from the promising experimental results obtained, a full-scale production scheme has been simulated to evaluate its techno-economic feasibility in a hypothetical real-scale plant.

According to Toscano et al. [24], the economic dimension of sustainability represents the poultry sector’s key driver for the integration of new green practices into the production system. However, although the opportunity to increase profitability is a strong incentive, it has not been proven how governance and sustainability definition can pave the way to apply low-emission production models. Within sustainability studies, thematic analysis has proven useful for investigating specific sectors and limited geographic areas, such as the tourism industry workforce on sustainable tourism [25], the adoption of AI in agriculture [26], sustainability in African construction [27], and sustainable change management in Bahrain [28]. This study intends to integrate the TEA of the Smart Feed model with the investigation of poultry operators’ sustainability dimension by means of thematic analysis methodology with the final aim of understanding how the overall value attributed to the sustainability concept is reflected in the willingness to adopt organizational or business models such as the one studied.

2. Materials and Methods

2.1. Modelling Smart Feed: Techno-Economic Assessment Methodology and Procedure

In order to analyze the profitability of a full-scale plant according to the Smart Feed concept, a TEA was performed by modelling an integrated supply chain. The model was constructed to predict the quantity and economic value of the produced feed, as well as biogas, to be converted to heat and power via a combined heat and power (CHP) unit and wastewater. The model can be used to compute alternate scenarios for a cost/benefit analysis. An integrated TEA has been used to obtain an evaluation that is as accurate as possible, making linkages between different variables of the technical and economic units. A change in one input variable directly affects multiple-linked intermediate variables, which in turn determine the different output variables. Input and intermediate variables are extended by newly introduced sub-variables, which allow the modification of certain variables on a deeper technical and economic level and enable us to understand the variable-specific processes that affect the operating process of the technology. The integrated TEA has a dynamic multi-variable dimension of the integrated process, and it allows the variables to be adjusted based on the stage-specific conditions of the project without rebuilding the model.

Process Flow and Mass and Energy Balance

A full-scale, green field plant was simulated, assuming a location in Lombardy (Northern Italy) and commissioning during 2023.

Since the current European legislation (EC) No 1069/2009 [29] only authorizes insects’ rearing on high-quality materials, mass and energy balance was modeled using data found in the literature and performed using an Excel-based model incorporating four process stages: OFMSW pretreatment, insect meal production, a biogas plant integrated with microalgae cultivation, and feed formulation. Each stage was simulated using a different Excel sheet and, therefore, no full-scale plant and experimental activities were developed. For modeling the mass and energy balance, the sub-activities of each production stage were determined, for which energy consumption and mass input and output were calculated from the literature data. The data used for the mass and energy balance were compiled into a single spreadsheet entitled “Input Data Technical”.

Specifically, the model is represented by the following scheme: once the OFMSW is separated from the waste thanks to the pretreatment process, 5% of the pre-treated OFMSW is used as a medium for BSFL rearing and the remainder is directly piped to the biorefinery, where biogas and digestate are produced through anaerobic digestion. Biogas is used for CHP operations which allow the energy needed by the process to be generated, whereas digestate is treated by solid–liquid separation: the solid fraction is composted with minimal processing and the clarified liquid one is valorized through Chlorella spp. cultivation. Algal biomass is then dried, grinded, and combined with Hermetia illucens meal to produce the innovative broiler feed. The model is represented in detail in Figure 1.

In the model, the biorefinery plant is simulated considering an annual quantity of OFMSW of 20,000 tons (Fresh Weight (FW), 25% dry matter (DM), and 90% organic dry matter (ODM) [30]), which are subjected to pretreatment processes in order to separate the unwanted components from the organic fraction and pressing. A small fraction (5%) of the pre-treated OFMSW is used as a medium for black soldier fly larvae (BSFL) breeding and the remainder is diluted to 10% DM and directly used for anaerobic digestion. Insect rearing is simulated by using 6-day-old larvae (30% DM), grown for 21 days at 65 ± 5% relative humidity, 27 ± 1 °C, and a density of 20,000 larvae/crate, which corresponds to an annual processing capacity of 1988 crates 60 × 40 × 15 cm (16 production batches per year). Juveniles are weighed and transferred to individual crates and fed with a total of 8–10 kg of fresh weight OFMSW per crate until the first prepupa larvae (dark color) are observed. Then, the juveniles’ biomass (FW and DM) used to produce individual batches are determined. After 21 days, the larvae from the individual crates are separated from the insect frass (digested and undigested substrate) using a sieve crate with holes of 4 mm in diameter and weighed to determine the larval biomass [31]. BSFL frass (70% DM, 86% ODM [32]) is then piped to the biorefinery along with the diluted OFMSW and treated through wet anaerobic digestion at mesophilic conditions (i.e., 35 °C). The biogas plant model is equipped with a 3000 m³ bioreactor and operated in continuous mode with 8000 operation hours/year [33], a retention time (HRT) of 20 days [34], and 10% of DM concentration. Biogas (methane content: 60% [35], biochemical methane potential (BMP): 500 m³ biogas/t SV [35]) accumulated during anaerobic digestion (AD) is used for CHP operations. This allows the co-generation of the thermal and electrical energy needed by the process, considering a heat and power capacity of 3 kWh/m³ and 2 kWh/m³ [35], respectively. In this respect, the model considers an ideal commercial engine characterized by 100% CHP generation efficiency. After the recovery of the anaerobic digestate, solid–liquid separation is performed to isolate the liquid phase, which represents 90% of the total amount of digestate [36]. A fraction of the liquid digestate, corresponding to 11,000 t/y, is subjected to further centrifugation and directed to microalgal cultivation, while the remainder is sent to standard aerobic wastewater treatment. Solid fractions are composted with minimal processing along with the sludge resulting from the additional centrifugation of the liquid digestate. Algal cultivation is performed in raceway ponds (220 m³, depth: 0.02 m) for Chlorella spp. cultivation (growth conditions: 25 °C, HRT = 7 days, and pH 8.5 [37]). The process yield is modeled according to the study conducted by Chu et al. [38].

Aerobic wastewater treatment is carried out to break down organic impurities and other pollutants still contained in the sewage downstream of algal cultivation. Recirculation of the aerobically treated water, for example as a diluent for the OFMSW prior to AD, can be considered as a means to reduce the overall operations’ water consumption. However, this option has not been implemented in the current version of the model.

The harvested biomass (20% DM [39]) and BSFL larvae are oven-dried (65 °C) [40], milled, and then mixed (10/90 ratio) along with water and additives to obtain a raw feeding material with a 20% moisture content. Finally, the mixture is extruded to obtain pellets with 5% humidity, which will be ready for sale after the last oven-drying step.

Furthermore, the required input energy for each process stage and the output energy for biogas production) were computed. To calculate the energy balance and determine the process’s degree of self-sufficiency, biogas was assumed to be entirely fed to the CHP unit and heat and power outputs were computed. Next, the power and heat demands of the plants’ unit operations were subtracted to the available pool of heat and power. The net available pools of heat and power were calculated using the raw biogas energy content and the assumed conversion efficiencies and subtracted by an estimated 10% loss for the anaerobic digestion plant’s self-consumption. Finally, it has also been assumed that the eventual power surplus would be fed into the grid and sold, whereas the heat surplus is dissipated, based on the low assumed probability of integration with a heat-requiring plant or a district heating network which would allow its distribution.

The plant was assumed to operate for 8000 h/year and be manned by five units of personnel.

2.2. Definition of Sustainability: Thematic Analysis Methodology

Thematic analysis is a method that dates back to the philosopher of science Gerald Holton, author of On the Role of Themata in Scientific Thought (1975). The fields of application are very diverse, ranging from marketing [41] to nursing care [42].

In this study, the research for exploratory purposes involved a sample of 14 Italian poultry supply chain operators interviewed between May and October 2021 during an annual poultry fair (Fieravicola 2021, Rimini, Italy), and four farmers visited their premises. Specifically, the poultry supply chain operators were employees of both broiler and laying hens farms. Each interviewee was asked to define sustainability, indicate the sustainability practices adopted within their company and indicate what they considered as the main obstacles or facilitating factors in embracing or not embracing sustainability practices.

The interview had the dual purpose of detecting the spontaneously adopted sustainability practices and explaining the factors that intermediate the relationship between belief and behavior. Taking into consideration the indications of the literature on the subject [43], in the present work, four general phases of the thematic analysis process were followed: transcription, corresponding to the drafting of the interviews and notes produced during the data collection; analysis, consisting of breaking down the text into self-sufficient components and into meaning units that cannot be further broken down, to which a code is assigned; thematization, corresponding in recomposing within areas, uniting text fragments belonging to the same thematic area; interpretation, consisting of a critical reading of the content of the themes, but also of how the themes relate to each other, relate to the codes, and how the codes relate to each other.

To ensure the internal coherence of the system of categories and themes [44], three evaluators were involved, the first of whom decomposed the text into strings and hypothesized codes and themes; the remaining evaluators were subsequently asked to indicate for each string of text which themes were attributable to each response.

3. Results

3.1. The Outcomes from the Techno-Economic Assessment

The results of the techno-economic analysis of this study are presented in the following sections.

3.1.1. Process Flow and Mass and Energy Balance

The assumed flow of 20,000 tons/year of OFMSW was reduced by 3.5% (19,313 t/y) after the pretreatment process. Five percent (966 t/year) of the pre-treated OFMSW is used as a medium for BSFL growing, whereas the remainder (18,347 t/year) is diluted with 27,521 t/year of water and directly piped to the biorefinery. The BSFL rearing model is built using 39 t/year of 6-day-old larvae (FW), resulting in 128.8 t/year of BSFL and 200 t/year frass, as reported in Figure 1.

AD produces 5,220,330 m³/year of biogas and around 41,461 t/year of digestate. Digestate centrifugation allows for the isolation of 37,315 t/year and 4146 t/year of liquid and solid fractions, respectively. Then, a fraction of the liquid digestate, corresponding to 11,000 t/year, is subjected to further centrifugation and directed to microalgal cultivation, reaching a final concentration of around 1.82 g/L and producing 17.4 t/year of algal biomass. The remainder of the liquid digestate (26,315 t/year) is sent to standard aerobic wastewater treatment (Figure 1). Oven-drying allows for 38.6 t/year of BSFL powder and 3.9 t/year of microalgae meal to be obtained; finally, once the additives and 10.6 t/year of water are added, the raw feeding material is extruded to obtain pellets. The annual productivity is estimated at around 50.5 tons of novel feed.

Considering the intake of 10% of the energy output for the plant self-supply, the process model allows for the co-generation of 14,095 MWh of net disposable heat and 9397 MWh of net disposable power. The total power and heat consumption (except for the AD plant) is equal to 460 MWh/year and 306 MWh/year, respectively, as reported in

Table 1. The table summarizes the annual power and heat consumption (MWh/year) of the whole process, specified based on the equipment or the process phase; gaps refer to operations that do not require electricity or heating. The table excludes the energy consumption of the AD plant, which was calculated as 10% of the annual energy production.

Equipment/Activity	Power Consumption (MWh/Year)	Heat Consumption (MWh/Year)
Waste bag opener	69.26	-
Discs sieve	9.99	-
Iron separator	9.99	-
Screw press	10.66	-
Sludge trap	10.66	-
BSFL rearing plant	103.32	120
Solid–liquid digestate separation	63.94	-
Centrifuge (liq. digestate clarification)	111.95	-
Chlorella spp. oven-drying	-	8.45
BSFL oven-drying	-	56.33
Chlorella spp. cultivation (raceway ponds system)	28.65	120
Wastewater aerobic treatment	32.08	-
Grinding machine (BSFL)	0.71	-
Grinding machine (Chlorella spp.)	0.07	-
V-type mixer	0.33	-
Pellet extruder	7.97	-
Pellet oven-drying	-	1.66
Total	459.56	306.44

. Thus, the energy balance results showed that the system is highly functional, with a heating and power surplus of 13,788 MWh/year and 8937 MWh/year, respectively.

3.1.2. Economic Results

The economic evaluation considers year-by-year capital and operating costs and the revenues for treating OFMSW and selling electrical energy and the novel feed. The economic and financial assessment of the whole plant configuration was carried out based on different economic indicators, as defined below.

Initial Total Investment Cost (Fixed Cost)

The initial total investment cost is computed as the summation of the unit costs related to buildings, equipment, land, and working capital [45]. It is also known as the investment value, which represents the total amount of money spent for the commissioning of the entire plant. The plant model was set up considering a building land size of 10,000 m², considering an average cost of land of EUR 600 €/m². The plant facilities include spaces for insect rearing (1000 m²), microalgae cultivation (1000 m²), for which the building costs per gross area are estimated at around EUR 500 /m², wastewater treatment, and an anaerobic digestion facility equipped with an OFMSW pretreatment area and a 1.36 MW_e CHP section.

The investment cost of the AD facility, considering a 3000 m³ digester, was estimated to be EUR 10,000,000. The investment costs of the pilot for microalgae cultivation include a 1100 m² raceway pond, a greenhouse (containing an open pond and a separate space for processing), blowers, pumps, centrifuges, and pipes. The total costs allocated to this facility are equal to EUR 143,000 [37], whereas EUR 300,000 is estimated for the wastewater aerobic treatment plant. The total estimated investment cost (buildings, equipment, and land) corresponds to EUR 18,227,275, as presented in detail in

Table 2. The table summarizes the total estimated investment cost (EUR ) allocated to equipment and infrastructure.

Equipment/Infrastructure	Cost (EUR )
AD facility (pretreatment, digester, CHP section)	10,000,000
Composting system	50,000
Air purification system	2175
Collection tanks	100,000
Centrifuges	249,606
Screw presses	51,662
Microalgae cultivation facility (raceway pond infrastructure, mixing equipment, sparging equipment, process control, and biomass harvest infrastructure)	143,000
Industrial mixer V-type	2420
Ovens	9880
Grinding machines	8065
Pellet extruder	3865
Total equipment	10,677,275
BSFL rearing warehouse	500,000
OFMSW pretreatment warehouse	250,000
Wastewater treatment facility	300,000
Building land	6,000,000
Microalgae cultivation warehouse	500,000
Total infrastructure	7,550,000
Total investment (equipment and infrastructure)	18,227,275

.

Finally, the working capital was equal to EUR 97,179 and was calculated considering consumables and personnel costs based on a three-month period.

Operating Costs

The yearly cost for plant operations can be determined by the sum of the direct and indirect costs for operation and maintenance (O&M). Direct costs are, in turn, represented by consumables, personnel, maintenance, and contingencies. Consumables include water (EUR 1.4 /m³), BSF larvae (EUR 2 /kg) [46], wastewater disposal (using aerobic treatment), and feeding additives, the cost of which can reasonably be assumed to be 15% of the Novel feed selling price. Waste disposal costs include wastewater derived from digestate clarification and algal cultivation; it was considered equal to EUR 1.1 /m³ of waste. Personnel cost comprises annual operating, maintenance, and administrative and support labor. A total of five employees were assumed for plant operation management: a plant manager (yearly cost of EUR 60,000 /year), three operators (one person/shift, EUR 48,000 /year per person), and a maintenance technician (EUR 30,000 /year). Finally, maintenance and contingency costs were assumed to equal EUR 24,000 /year and EUR 20,000 /year, respectively.

Indirect costs are, instead, represented by general administration expenses (assumed to be equal to EUR 10,000 /year), insurance (EUR 20,000 /year), staff training (EUR 4500 /year), and plant security contributions (EUR 3000 /year).

Thus, the whole yearly cost for plant O&M equals EUR 470,216.

A summary of the annual plant O&M costs is reported in

Table 3. The table shows the annual plant operation and maintenance costs composed of direct and indirect costs.

Cost Item	Unit	Annual Cost
Water	EUR /m3	38,544
6-day-old BSFL	EUR /kg	78,795
Wastewater aerobic treatment	EUR /m3	32,079
Feed additives	EUR	5298
Total Consumables	EUR	154,716
Personnel	EUR	234,000
Maintenance	EUR	24,000
Contingencies	EUR	20,000
Total direct costs	EUR	432,716
General administration	EUR	10,000
Insurance	EUR	20,000
Staff training	EUR	4500
Plant security contributions	EUR	3000
Total indirect costs	EUR	37,500
Total costs	EUR	470,216

.

Revenues

The primary income of the plant comes from the sale of the electrical energy produced by the CHP system. The power production is reduced by the power needs of the process and guarantees an energy surplus equal to 8937 MW_eh/year. The sale cost was assumed to be EUR 105 /MWh, evaluated as the weighted average Italian power exchange price until 2019 (EUR 60 /MWh) and in 2022 (EUR 150 /MWh) [47].

Regarding OFMSW disposal, which represents a source of revenue, a gate fee of EUR 50 /t was prudently assumed to evaluate the base-case scenario. However, a sensitivity analysis on the gate fee could be also performed. Finally, revenues from the novel feed sale were evaluated considering the conventional feed bulk price (approximately EUR 0.70 /kg [48]). The novel feed selling price was assumed to be EUR 1 /kg, considering the process complexity and raw materials’ production cost. However, a sensitivity analysis on the minimum selling price could be performed. In conclusion, the yearly revenues are estimated to be EUR 1,988,843.

Table 4. The table summarizes the income derived from power production, feed sale, and OFMSW treatment.

Revenue Item	Unit	Annual Revenue
Electric energy	EUR /MWh	938,388
OFMSW treatment	EUR	1,000,000
Smart Feed	EUR	50,455
Total revenues	EUR	1,988,843

summarizes the income derived from power production, feed sale, and OFMSW treatment.

Financial Assumptions and Profitability Metrics

The key milestones and the main financial assumptions considered in this work include an amortization rate of 8.33%. Different profitability metrics to approximate the cash flow have been applied to assess the sustainability of the firms’ management. Among these, the annual gross profit was determined by subtracting direct costs from revenues, resulting EUR 1,556,127 (i.e., 78% of revenues). Furthermore, earnings before interest, taxes, depreciation, and amortization (EBITDA) was considered, which is defined as a valuable metric to measure a company’s financial health and ability to generate cash flow. Specifically, it was calculated by subtracting the total costs from revenues and was equal to EUR 1,518,627 per year, which is 76% of the revenues.

Finally, earnings before interest and taxes (EBIT), which focuses solely on the model’s ability to generate earnings from operations, was deduced by subtracting the amortization from EBITDA. Its calculus (yearly based) provided a null value throughout the amortization period (12 years, specifically) which allows the break-even point to be identified, beyond which the company begins to generate a profit.

3.2. How Poultry Supply Chain Operators Define Sustainability: The Outcomes from the Thematic Analysis

After all of the interviews were transcribed (phase 1: transcription), the text was broken down into strings to which codes were assigned (phase 2: analysis); one pieces of evidence found during the coding phase was the impossibility of establishing an unambiguous correspondence between textual unit and code, which is why some strings were assigned multiple codes. This can be considered in line with the idea that natural discourse categories, unlike logical-scientific ones, are fuzzy sets, as indicated by linguists (e.g. Ramat, 2009 [49]) and cognitive psychologists [50]. The analysis phase resulted in 58 codes, listed exhaustively in

Table 5. The code column indicates the codes assigned to the definition strings; the theme column unifies different codes based on a semantic affinity in the same theme.

Code		Theme
Model Institutional framework Organizational view	General reduction of impact We do not deal with it
		General model
Animal welfare Health Cleanliness and hygiene No human exploitation	Environment Nature/ecology Overview	Environment, health, and welfare
Resource consumption No exploitation of land	Reduction of waste	Resource consumption/exploitation
Reduction of pollution	Pollution avoidance	Pollution
Reduction of energy consumption Renewable energy sources Saving/avoiding waste	Switch off machinery Automation	Energy consumption
Traceability of ingredients Ingredient selection Selection of raw materials	Supplier selection Customer selection	Supply
Logistics Transport optimization	Reduction of transportation costs Reduction of costs	Storage and transportation
Waste management Waste reduction	Reduction of disposal costs	Waste/scraps
Economic sustainability Marginality Costs of sustainability	Market dependence Economies of scale Foster the market	Company cost/benefit
Attention	Established practice	Effort/habit
What we do As we understand it	Brand	Identity
Officinal plants Antibiotics with essential oils Reduction of antibiotics	Replacement of chemical components Natural products Reduction of additives	Natural products
Single packages Packaging reduction Eco-friendly packaging	Avoiding plastic Recycled packaging	Packaging

.

At the reassembly stage (stage 3: thematization), the referenced codes and textual units were juxtaposed to form sets characterized by semantic closeness; for example, the statements “In our production, we have introduced...”, “The company has adopted...”, and “Our idea of sustainability is...”, corresponding to the first two of the code “What do we do to be sustainable”, the third to “How do we mean sustainability”, were juxtaposed based on a semantic affinity criterion, within the theme “Identity”. Statements such as “The only move in the direction of sustainability/change is related to antibiotics that are beginning to contain essential oils...” and “The production of products (including industrial products) that replace chemical, antibiotic-free products (that deal with prevention and not exclusively with treatment)” coded as “Reduction of antibiotics” and “Reduction of chemicals” were themed as “Natural products/chemicals”.

Table 5 summarizes and explains the themes that emerged, concerning which the two external evaluators reported a Cohen’s K value of 0.65 and a % of agreement of 90.7%.

General model. It is the leitmotif of all the codes, which, in turn, refers to the general definition of sustainability. Only one interviewee considers the three aspects of sustainability (social, economic, and environmental) to be integrated, while the others tend to show a perspective that depends on their particular experiences and context, with a preponderance for the environment. One subject defines it as “A way of living and working”, while two subjects could define it because they work in contexts that do not practice sustainability. Finally, only one interviewee refers to the legal–institutional framework that regulates sustainability practices as “Sustainability is the reduction in the use of medicines, especially antibiotics, which has also been requested by the EU”.

Environment, health, and animal welfare. Some respondents overlap the definition of sustainability with that of environmentalism and environmental stewardship «Everything related to the environment is sustainable», which goes hand in hand with other similar definitions such as “For me, sustainability is the set of all those who have a 360-degree view of the environment”. In other cases, sustainability is associated with human and animal health and hygiene, “Human well-being”, “Complete cleanliness and hygiene allow us to be much more sustainable”, and “Sustainability is what takes into account animal welfare in the first place”.

Resource consumption/exploitation. The depletion of resources is the central part of the definition of sustainability, combined with pollution and energy consumption, with which it has two different relationships: before–after (consumption and exploitation of resources are causes of pollution) and entirely in part (energy consumption is a particular consumption of resources). The theme also includes a reflection on social sustainability, “Social sustainability, on the other hand, refers to the choice of suppliers who do not exploit local populations and do not over-exploit the territories”, and a proposal for reduction strategies, “Sustainability is reducing the waste of a product as much as possible and using as few antibiotics as possible”.

Pollution. As one of the most tangible impacts of sustainability, pollution is considered part of a corporate strategy to avoid or reduce waste generation, «Everything produced in our segment that has no impact on global pollution is sustainability”, such as “Sustainability is trying not to pollute”.

Energy consumption. The interviewees see it as one of the most important sources of impact and, therefore, of denial of sustainability; in this sense, they cite various strategies, general or specific, to reduce energy consumption: “In the context of labelling, electricity could be reduced”, “We could resort to the use of renewable energy sources”, “It could be adopted in a plant through a machine that can be turned off when not in use”. The respondents addressed this theme in an entirely concrete form, while in the previous themes, the concrete aspects were juxtaposed with abstract aspects.

Procurement. Considered not as a closed system but as interdependent with the entire production system, according to the interviewees, companies guarantee sustainability only if it is present along the entire supply and distribution chain. Sourcing “Concerns the environmental aspects, logistics, waste management, the choice of raw materials [...]”, or “Economic sustainability concerns the company’s internal processes, the production chain, the choice of suppliers and customers”. Procurement is also linked to social sustainability to the extent that suppliers who ensure fair treatment of human resources and territories are chosen.

Transportation and storage. They have a particular interest in breeders and packaging companies, contributing to the reduction of emissions, the depreciation of the production flow and the possibility of exploiting full-load transport.

Waste/Scraps. The theme is defined in the sense of reduction (e.g., creating forms of the circular economy within the company (e.g., turning biowaste into a fertilizer).

Company cost/benefit. Economic sustainability takes precedence over environmental sustainability, as the market does not seem to be oriented towards sustainability in and of itself, “Sustainability is an additional cost for the company”, “The sustainable market in the poultry sector is 4- 5%, so I do not care”. However, some interviewees recognize that reducing waste and energy consumption has value if included in the economies of scale approach, “People tend to buy large quantities of goods to obtain an economic advantage, this allows the use of larger and more sustainable packaging”.

Effort/habit. Some respondents report that adopting sustainable practices is outside the scope of custom, and in that sense, they are an effort to be paid more attention; for others, however, they are usual practices that do not cost effort once adopted.

Identity. All of the interviewees, including those who declared that they do not adopt green practices, discuss sustainability, which is considered as an unavoidable challenge. The dialogue on this issue leads to expressions that denote an interpretation according to one’s abilities and skills, through statements such as, «In our production we have introduced” or “For us, sustainability is […]”.

Natural products. Several interviewees consider sustainability coinciding with reducing chemical components in feed, inks, or antibiotic drugs, for which alternative products based on essential oils and medicinal plants are available on the market.

Packaging. Some interviewees disagree on the subject of packaging, as for some, it is an expression of sustainability to package products individually (for example, individual eggs), as this reduces downstream waste for the consumer; for others, however, it means adopting larger packaging in order to reduce the amount of cardboard used.

4. Discussion

The Regulation (EU) 2021/1372 [51] approved the authorization of insect-derived processed animal proteins (insect PAPs) in poultry and pig feed. This achievement, set out in the International Platform of Insects for Food and Feed (IPIFF) policy roadmap, fosters circularity in food production and resource-closing loops while improving the sustainability and self-sufficiency of the EU livestock sector. The concept of “closing loops”, referred to the integration of upstream and downstream activities of the supply chain, is one of the options envisaged to guarantee the sustainability of supply chains. A more efficient use of resources, meant as responsible waste management and prevention coupled with reuse and recycling of materials, can potentially bring net savings to businesses, leading to a reduction of the environmental impact [52,53], especially for highly intensive production systems. The closed flows of materials and resources, such as the one proposed by the Smart Feed model, can result in more economies and efficiencies whilst reducing externalities, including waste, emissions, and energy leakages through the use and reuse of resources [54]. However, the development of economically viable circular APS production models, such as those based on the bioconversion of organic biowaste, faces several regulatory and technological challenges to ensure safety and efficiency. According to the European legislation on animal by-products (1069/2009) [29], farmed insects fall within the definition of “farmed animals” and can only be fed with products of high quality, such as materials of vegetable origin, processed eggs, milk, and their derivatives. It is forbidden to feed farmed animals with the products of other slaughterhouses or to supply derived products, manure, or catering waste. Furthermore, current insect-based animal feed technologies do not ensure industrial scalability and continuous supply, resulting in uncompetitive insect meal prices compared to other protein sources. Identifying the most suitable insect species for economic industrial-scale protein production, together with innovative technologies for rearing, harvesting, and post-harvesting procedures, are essential prerequisites to achieve the techno-economic sustainability of insect APS production [55].

In the context of this study, the Smart Feed model has proven to be a fully circular system in which material inputs are converted into animal feed and compost, and the wastewater produced is treated to reduce the environmental impact and the discharge of waste into surface waters. The model has proven to be able to generate revenues thanks to the provision of services that represent a consistent source of revenue: AD of OFMSW combined with the operation of co-generation and the sale and distribution of energy. It is highly functional and self-sufficient, with a thermal and power surplus of 13,788 MWh/year and 8937 MWh/year, respectively. The electricity surplus, which represents 85.6% of the total electricity production, would be fed into the network and sold, while the thermal surplus would be dispersed, given the absence of a capillary of district heating network distribution. Furthermore, the combination of BSFL rearing and Chlorella spp. cultivation for the production of APS-based poultry feed, avoiding the use of soybean, guarantees a low ecological footprint, a high-quality feed composition, and a high protein content (up to 60%) [16].

Despite its ability to generate revenues, the Smart Feed model cannot be said to be profitable for animal feed production, representing a negligible part of annual revenues. In fact, OFMSW processing, power distribution, and feed sale account for 50.3%, 47.2%, and 2.5% of revenues, respectively. High investment costs, 54.9% and 41.2% of which are allocated to the biogas plant equipped with the CHP section and infrastructure, undermine the profitability of such a complex production model. High investment starting costs, associated with an amortization coefficient of 8.33%, negatively affect EBITDA and EBIT and, consequently, the break-even point. Based on these observations, the break-even point of the Smart Feed model would not be reached before its thirteenth year of activity: a condition that is certainly not profitable and economically feasible for small breeders and investors producing animal feed.

However, some considerations and assumptions are possible to unlock the potential of the Smart Feed model. Firstly, investment costs could be significantly reduced through the takeover of decommissioned infrastructure, leading to substantial savings, at least regarding facilities’ construction (brown field project). Secondly, governmental incentives and regulatory tools to develop technologies to make OFMSW safe for APS production for food and feed purposes are essential. Finally, considering the low annual feed production and related revenues, the profitability could increase considerably, assuming the implementation of the model in an integrated system, which associates feed production with poultry farming. In these terms, Smart Feed would be used directly on-site, and the poultry farm would benefit from a free feed supply without logistics costs, reducing maintenance costs and increasing its economic sustainability.

The market uptake of a Smart Feed model integrated with OFMSW treatment plants and animal feed production is consistent with what emerges from the thematic analysis conducted by the study. Farmers confirm the efficiency and energy saving, combined with economic sustainability that exploits scale economy priorities, to achieve sustainability in the sector. Through thematic analysis, the definitional effort by the interviewees, i.e., the attempt to define sustainability, does not constitute a flat and uniform surface at all but, on the contrary, it reveals areas of contradictions. The definitions spontaneously produced by the subjects reflect some of the paradoxes also highlighted in the literature [56,57]; in particular, for some subjects, sustainability coincides with cost, for others, with a business benefit. The expulsion of the social and economic components in favor of the environmental component represents a point on which almost all definitions converge. From this point of view, the concept of sustainability constitutes an object of technical-scientific knowledge, which is redefined and re-semanticized based on personal experience, media image, and conversations, or rather a repertoire of knowledge transmitted orally [58] which generates new definitions, distinct from the official ones.

From this first nucleus of themes a positive connotation of sustainability as an affirmation of health, well-being, and ecology also emerges; with respect to the theme of resources, the theme of reducing exploitation and pollution emerges, ideally grasping the inputs and outputs of production processes in abstract terms.

On the other hand, the second nucleus of themes is more concrete and operational and is located specifically in organizations. In particular, the themes seem to reproduce the production phases, starting from the procurement and passing through the packaging up to the transport. The possible relationship between management control and sustainability is thus highlighted, which could benefit from strategies such as big data analysis [59], but also the role that technological innovation can bring in replacing polluting chemical components or providing more efficient machinery.

All of the companies interviewed, despite their differences in size and roles within the poultry supply chain, demonstrated that they have sustainability in mind as a criterion with which to compare themselves [60,61]; this may suggest a need for expertise on the part of companies that is not always met.

5. Conclusions

The profitability of the Smart Feed model has shown to strongly depend on scale economy logics. Smart Feed has proven to be fully circular and technically feasible considering mass and energy flows, as well as mass and energy input and output balance, energy self-sufficiency, and large energy surplus generation. Its high functionality could generate substantial revenues from the distribution of excess energy, as well as from OFMSW treatment and feed sale.

Despite the advantages demonstrated, the model, as sized, is economically unsustainable due to the volume of feed being inadequate to meet market demand, with no significant impact on annual revenues. In addition, a brake on the system’s profitability is due to the very high investment and depreciation costs compared to the annual feed production. However, economic feasibility could be achieved by assuming three enabling solutions. Firstly, the investment costs could be significantly reduced by recovering abandoned infrastructure. Secondly, it is essential to underline the importance of adopting a regional and/or national incentive policy system, reducing investment costs in the first years of operation. Finally, implementing an integrated system that associates the treatment of OFMSW with poultry farming, in which the company would benefit from a free supply of feed and energy. Therefore, adopting an integrated system would result in marked economic sustainability and profitability: key elements from the farmers’ point of view.