Large amounts of food are wasted, and valuable contents are not utilized completely. Processing such wastes into biomass of defined composition is possible using insects. However, automation and decentralization of insect-based processes are necessary for certain applications. This study presents a modular design for rearing larvae of the black soldier fly, Hermetia illucens. A life cycle and economic assessment are carried out to check whether the process may be viable. A sales price of 3.55 € per kg of the product would make it profitable within five years. Production of 1 kg of dried larvae would be associated with 2.77 kg CO2 eq emitted, 55.24 MJ of non-renewable energy use, and occupation of 0.68 m2 of organic arable land. Per kg protein, the insect biomass appears more sustainable than database benchmarks. These results indicate that even small-scale insect production processes have sustainability benefits when using food waste.