Currently up to half of all food produced is wasted. The food waste is treated with commonly used methods. Due to emissions associated with biomass decay and extensive transportation and storage necessities, this entails a negative effect on the environment. Modular systems of food waste treatment, applicable for a range of instances along the food supply chain might be a potential solution. By evaluating economic and environmental aspects, this study focuses on the configuration and assessment of solutions based on insects specifically for the conditions in Germany. Insects are selected because of their ability to convert low value food waste into biomass (rich in proteins and fats) and frass which can be sold for other purposes. Tenebrio molitor and Hermetia illucens are fed on side streams composed of brewery grains, potato peels or expired food from retail. For T. molitor, no life cycle assessment (LCA) is performed, as this species did not fulfil the design requirements of the modular system. For H. illucens the results of the economic analysis and LCA show that the system performance depends on the type of waste. The environmental and economic efficiency of H. illucens feeding on brewery grains or expired food is higher than the one of incineration and anaerobic digestion. Compared to composting, H. illucens is environmentally more efficient and economically comparable to the operating costs of composting. If potato peels are considered as feed for insects, the commonly used waste treatment methods show better results in all aspects.