The Challenge:
– Upcycled products utilise ingredients that otherwise would not have gone to human consumption, are procured and produced using verifiable supply chains, and have a positive impact on the environment. The past decade has seen an increase in plant-based alternatives, oat milk, electric cars and compostable packaging. The food system is transitioning from a commodity-driven supply chain to a consumer-centric and value-added food and agriculture ecosystem. This presents a profitable for NPDs to reimagine the food system and create products that use upcycled food scraps. – There are striking inefficiencies in the global food system – approximately ⅓ of food produced annually is lost or wasted. Upcycling provides a unique opportunity for NPDs to reduce food waste to create value added products. – 50% of CPG growth from 2013 to 2018 came from sustainability-marketed products. The emphasis on sustainability is extending beyond packing, ESG aligned businesses and shipping methods. New product start-ups are incorporating waste food scraps into their supply chains to create value added plant-based products. While consumer trends imply that the revenue potential for upcycled products is promising, increased investments from government and stakeholders towards sustainability initiatives adds to the profitability potential.Main reasons for food waste?
Food loss/waste can be categorised into the following sectors. Some which can be integrated in the production of a new food product:- Agricultural production: losses that occur in the production process. Roots and straws of crops can be converted to plant-based protein powders.
- Livestock production: losses and inefficiencies in the conversion of feed and grass into animal products.
- Handling, storage and transportation: losses due to spillage and degradation during storage and distribution.
- Processing: losses during the processing of commodities.
- Consumer waste: losses and waste between food reaching the consumer and being eaten.
- Over-consumption: the additional food intake over that is required for a healthy human.
Steps 1 and 2 have been integrated by companies such as Canadian company Outcast Foods, which creates plant-based protein powders from food waste. Other consumer packaged goods companies like Planetarians collaborate with plantain producers to convert “ugly” plantains into single serve plant-based chips.
Converting “low-value” but food grade goods into high-value products can be profitable if the correct upcycling technologies are used. Biofermentation has been used to convert waste from dairy products into a more sustainable alternative to palm oil by Capro-X.
Creating Space in the upcycled food industry
- In the US, 81% of people believe that the appearance of food impacts their buying decisions when shopping for fresh produce, yet the consumer conscious towards purchasing less attractive foods is increasing. Thus, upcycling “ugly” produce into value added, processed products such as plant-based protein factors makes consumers more likely to purchase the product
- Lindt and Nestle are exploring ways to incorporate cocoa pulp into their products, creating a ripple effect for other large food and beverage companies and encouraging greater investments and attention to upcycling focused start-ups.
- Plant-based proteins – the global demand for plant-based products is increasing and upcycled food scraps happen to be plant-based, setting optimal conditions for NPDs to launch plant-based protein powders, protein bars, burgers etc. into the market.
- Ultimately, food trust is a decision maker in purchasing new food and beverage products. Thus, great storytelling and transparency of the supply chain through social media and packaging compels consumers to trust and thus purchase the product.