A safe, efficient, environmentally friendly process for producing isomaltulose is needed. Here, the biocatalyst, sucrose isomerase (SIase) from Erwinia rhapontici NX-5, displayed on the surface of Bacillus subtilis 168 spores (food-grade strain) was applied for isomaltulose production. The anchored SIase showed relatively high bioactivity, suggesting that the surface display system using CotX as the anchoring protein was successful. The stability of the anchored SIase was also significantly better. Thermal stability analysis showed that 80% of relative activity was retained after incubation at 40 °C and 45 °C for 60 min. To develop an economical industrial fermentation medium, untreated beet molasses (30 g/L) and cold-pressed soybean powder (50 g/L) were utilised as the main broth components for SIase pilot-scale production. Under the optimal conditions, the productive spores converted 92% of sucrose after 6 h and the conversion rate was 45% after six cycles. Isomaltulose production with this system using the agricultural residues, untreated beet molasses and soybean powder, as substrates is cost-effective and environmentally friendly and can help to overcome issues due to the genetic background.