A Little History

Chubby Mealworms began back in 2013 when there were only a handful of companies selling Dried Mealworms and Black Soldier Fly Larvae. As far as we know we were the first company to build a business and brand selling just dried mealworms and to make that brand fun and engaging. Since then, the market has grown dramatically and there are countless competitors who copied our concept and even tried to use our name in their advertising!

From the beginning all of our dried mealworms and BSFL were sourced in China and imported to the US. Over the years we have worked with just 2 suppliers in China who we have visited and have a great relationship with (you can find more information on that here) and will hopefully continue to do so for many years.

What about US Grown?

It was always apparent to us that a lot of consumers in the US wanted to have the option to buy domestically grown mealworms and we wanted to help provide this option.  We were lucky to be approached by a company called Beta Hatch who were growing mealworms firstly in Seattle and then in their flagship facility in Cashmere, WA. We were the exclusive seller of their mealworms and as such became the only company you could buy US grown dried mealworms from. We were always supply constrained, but the company had big plans for growth and we were ready to make these US grown mealworms available to the masses. Unfortunately, this company went out of business towards the end of 2023 as they could not raise enough investment to keep the capital intensive business going until it could increase volumes to become profitable.

After Beta Hatch went out of business we managed to find a company in Montreal, Canada who were in the early stages of growing mealworms and started working with them to bring these mealworms to the US and Canadian markets. As these were not grown in the US we re-branded them as North American Grown mealworms. The volume we have available to sell at the moment is small but this company is growing and we hope to have much larger quantities to sell in the near future.

All of this has shown us that it is difficult and time consuming to grow mealworms, and a lot more expensive than what it costs in China. There are quite a few growers and sellers of live mealworms in the US but as it takes 3 times the number of live mealworms to make 1lb of dried mealworms they tend to sell them live!

Honest and Transparent

We are always open and honest about where our mealworms come from and clearly separate the USA grown and Chinese grown products on our website and use different packaging and put ‘Grown in the USA’ in product titles. This cannot be said for other competitors who try to pretend that their mealworms or BSFL are grown in the USA when they are not. They will put things like ‘packed in the US’ on their packaging and use confusing images to try and trick customers, we have never and would never do this.

Tariffs

This brings us to the issue of the day - tariffs! While trying to remain politically neutral I believe tariffs have their place in specific targeted areas as opposed to a blanket rate on every product. As stated above companies have been trying to grow mealworms in the US for years and will continue to do so and eventually this will happen. Prices for those mealworms will however be more expensive than imported ones (without tariffs!) as wages, energy and other costs in the US are higher.

This cannot happen overnight though, but when it does, I believe both products can be sold alongside each other as a premium US grown version and a cheaper Chinese or overseas alternative, just as we have been doing.

Regardless of our thoughts on tariffs ,we have to deal with them. 25% has been in place on our mealworm imports since 2018 but this has now increased to 129% and seems to be changing on a regular basis which makes things even more challenging. At the moment the tariffs are stacked which means each additional tariff is added onto the previous ones unless specified. Right now this is:

25% Section 301 (from 2018)

20% IEEPA (International Emergency Economic Powers Act)

34% Reciprocal Tariffs

50% Retaliatory Tariff

What does this mean in $ Value?

Based on the above if we import $10,000 of mealworms we need to pay an additional $12,900 in tariffs to the US government. This is paid by us the importer, the US business, not China.

This more than doubles the cost price of the mealworms which we have no choice but to pass on to our customers as we would lose money on every order if we did not do so.

Unfortunately we do not have a lot of stock in the US already. We tend to import containers into Canada and then send stock to the US as required so that we are not charged tariffs on the stock we sell in Canada, this means however that we are exposed to the tariffs sooner than if we had a large volume of stock in the US already.

What does this mean for Prices?

As the tariffs are changing on a regular basis this means that they can vary by shipment. We need to both make sure that as a business we do not loose money and that our customers are not being over charged if tariffs do come down again. This means that we will have to make changes to our pricing as necessary without any notice based on the tariff amount charged when we have goods crossing the border. This is far from ideal and brings about it uncertainty for our customers but should ensure that we can also REDUCE prices if tariffs go down as quickly as we can.

Please understand that we do not want to put prices up and we do not benefit from this, we know that it is likely going to damage our business as it will put people off purchasing from us, but we cannot afford to lose money either. We have cut our profit margins already and will absorb as many costs as we can but we need to ride this storm out to make sure we are still in business for many years to come.

North American (Canadian Grown) Mealworms and BSFL

As we source our North American Grown mealworms and Black Soldier Fly Larvae from Canada we also had to put those prices up as they were subjected to a 25% tariff the last time they crossed the border. We believe this may now drop to 10% in which case we will be able to lower prices again, hopefully next week. Again we will have to respond to the tariff imposed on every shipment over the border.

The Future?

Nothing has changed for the long term goals of Chubby Mealworms. We want to bring you US and Canadian grown mealworms and Black Soldier Fly Larvae but we know that these will always cost more (in a zero tariff World) than imports from countries with lower costs, and as such we also want to offer a cheaper alternative for those with less disposable income so that the consumer can make a choice.

We have no doubt that mealworms will be grown in large volumes in the US in the future, but this takes time and investment, and we hope Chubby Mealworms can help make this happen.

We value every one of customers. We get some things right and some things wrong, but we believe we are always honest and transparent unlike some competitors.

I am sorry for making this so long but I wanted to give our customers a full overview of our situation and what we have been doing and want to do in the future. Thanks for reading and being a Chubby Mealworms Customer.

Many Thanks,

Ben Asquith - President