Woven Network, a trade body representing the edible insect businesses, says bug-based foods have made more than £6 million ($7.8m) in revenue in the UK in the past decade.
The groups predicts the sector could reach an annual revenue of more than £112m by 2025 if regulation issues are resolved.
“Insects are a very sustainable, low impact, highly nutritious alternative source of protein to meat,” said Nick Rousseau, a director at Woven Network.
“The UK consumer should be able to choose what they want to do in terms of their source of protein. At the moment, they can’t choose insects.
“This is the barrier to innovation that we’re now facing, as a result of Brexit and novel food changes.”
Insects are high in protein, need little space and are a low-carbon source of nutrition because of their small requirements for food.
While eating bugs such crickets and mealworms are more commonplace in Asia, edible insect industries in western Europe and the US have grown in recent years.
Meanwhile, UK traders have complained of hurdles in trading, particularly in the aftermath of Brexit.
Confusion over trade laws has left businesses unsure of how to sell bugs as food and ministers are being asked to update food standards legislation to stop British traders falling behind their European Union counterparts.
A decision on the matter from the Food Standards Agency (FSA) is expected in June, which may allow domestic trade on a temporary basis.
Until then, bug-based businesses are in limbo as local food standards officials can prevent companies from selling insect produce if they believe it is not safe to eat.
Difficulties for edible insect traders began in 2018 when the EU introduced food regulations classing edible insects as a “novel food”, meaning that they had to undergo new safety checks, including in the UK.
Temporary arrangements were discussed by the bloc to allow sales of bug-based foods while permanent trading applications were lodged.
But when the UK officially left the EU in early 2020, no transition for edible insects had been agreed to, and while traders on the continent have since been given approval, UK traders have not.
Before the new EU food regulations, people were able to eat and trade insect products in the UK, and were doing so “entirely legitimately over many years”.
“We have total confidence they are safe. The FAO, the global Food and Agriculture Organisation says they’re safe, so long as your farming and product development practices do not introduce contaminants or other risks. So inherently, they’re edible,” said Mr Rousseau.
Michael Wight, head of food safety policy at the FSA, said: “We are aware that edible insects, as part of the alternative proteins market, can offer benefits, most notably for the environment.”
“We are working hard to support and advise businesses and trade bodies so that they can provide high-quality dossiers and evidence as part of their novel foods applications.”