Upcycling: Can food waste be transformed into profit?
Upcycled foods turn traditional waste streams into savvy consumer products. This opens a potential to have your cake (environmental impact) and eat it too (at a profit).
The USDA estimates that 133 billion pounds of food, equal to $161 billion dollars, is not used or consumed in the U.S. That represents 30%-40% of all food grown. Food waste is a big, complex problem and a growing cadre of food processers are working to be part of the solution.
Let’s look at the coffee industry as an example. The coffee bean is harvested from within a coffee fruit called cascara. Cascara is often brewed into a fruity caffeinated alternative within coffee producing regions. However, 70% of cascara is wasted because there is very little international demand for this product. Coffee fruit often fills local waterways and landfills, generating up to 13 metric tons of carbon dioxide equivalent, internationally, according to an article posted by Edible-Alpha. However, a collection of companies is now buying cascara to turn into fruit coffees, nutrition bars, and baked goods. A consumer market for unused by-products reduces waste overall.
Cascara is hardly the only application. Surplus bread product is being used by some breweries instead of barley, and a Mexican-Canadian company creates jerky from an otherwise unused food source - an invasive fish. And that, well, leads to there being less invasive fish. Many businesses are also using ugly food ingredients that are often unsellable to picky consumers.
Food businesses that turn traditional waste streams into value-added products, ultimately helping the environment are starting to be referred to as upcycled. The Upcycled Food Association defines this category as, “Upcycled foods use 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.” These products have the potential to sustainably lower food waste.
Consumers base buying decisions on their values. The better your product reflects your customer’s values, the more loyal your customers will be. This can also justify charging a higher price. While “good for you, good for the planet” foods generally command higher prices, it’s important to ask who your customer is before bringing a new product to market. It’s only a certain type of consumer who will pay extra for a triple bottom line. For example, Gen-Z consumers (those born after 1996) over-index against the general population on the importance of a brand reinforcing their image and representing their personal values, according to Mintel. Nearly 90% of the Gen-Z generation also worries about the environment and the planet, according to Sustainable Brands. A food business that targets environmentally leaning Gen-Z customers in Traverse City for example, who also buy xx or yy related product is better positioned for success than one who markets to a generic “environmental person.”
A product should be designed for its users. If you connect the upcycled product to the right customer, you have a potential high impact, high profit business future.
MSU Product Center
Waste streams are a potential source of cost savings or even upcycled products. There are, however, significant costs associated with processing a new product and bringing it to market. For determining product feasibility and processing needs, consider working with the Michigan State University Product Center. The MSU Product Center is an organization that brings together on-campus expertise in the sectors of food, agriculture, and natural resources to help entrepreneurs define and launch innovative products. Field-based innovation counselors advise entrepreneurs on business planning, regulatory requirements, and product development needs. To access business development assistance, select the request counseling tab on the MSU Product Center website or call 517-432-8750.