Broadly speaking, a food waste business is one that combats food waste – be it through its operations, services or products. The business is centered around creating a product or service out of food that might otherwise be headed to the trash. This could be at any point in the supply chain: from the producers in farmers' fields all the way to distribution centers, restaurants and retailers.
In 2011, the Food and Agriculture Organization estimated that around a third of all food produced each year – approximately 1.3 billion tonnes – is wasted at various stages of the supply chain, amounting to losses of up to $940 billion. Meanwhile, food waste accounts for about 8% of total human-generated carbon emissions, making it a major contributor to global warming.
Clearly, the scale of the problem is massive – but so is the business opportunity. Recent analysis of 700 companies tackling food waste by coalition Champions 12.3 reveals that the median return on investment was 14:1 – which means that for every $1 these companies invested to reduce food loss, they saved $14 in operating costs. What's more, the food waste industry was worth $31 billion in 2019 and is poised to reach a massive $43 billion by 2024.
It continues to be a space ripe for innovation. Restaurants are using offcuts to create inventive dishes, startups are delivering subscription boxes filled with ‘ugly’ produce, and tech companies are launching apps that connect users with unwanted or unsold food. And, on the B2B level, initiatives include extending the shelf life of fresh produce and harnessing AI to better measure demand (and therefore limiting overbuying and reducing wasted produce).
Low Jia Yu is a marketing and business development executive at CRUST, a Singapore-based startup that turns surplus ingredients like bread and fruit peel into beer and other drinks. Here, she sheds some light on how businesses can get started upcycling food waste.
Knowledge: For Jia Yu, technical know-how isn't essential when starting a food waste business. ‘Having the passion and the determination is more important. Our CEO started learning how to brew beer from YouTube,’ she shares. That said, some knowledge of food waste and the circular economy will come in useful.
Cost: This will depend on your product, as well as the scale of your business. ‘The main costs to factor in would be production costs, marketing and branding costs, manpower costs and operational expenses,’ says Jia Yu.
Infrastructure: ‘This will depend on what your business is offering. In CRUST's case, we need a lab to carry out our research and development, as well as manufacturing facilities to produce our beers and beverages,’ says Jia Yu.
What's your business model?
OK, this is a biggie. Do you want to upcycle leftover food into new products, or redistribute unsold meals from shops and restaurants? How about setting up your own subscription box service? The possibilities are (almost) endless.
What infrastructure will you need?
Based on the above, what will you need to create your business? For example, if you're looking to launch a food waste app, you'll have to invest in tech infrastructure such as servers and databases. And if you're thinking of creating a new food product, you'll need the relevant food processing equipment.
Which producers will you work with?
Food waste streams range from ugly produce and offcuts to surplus meals. You can work directly with farmers to reduce food waste at the primary production stage, or with restaurants and retailers to tackle food loss further along the supply chain.
Can you get external support?
Many governments and organizations are funding businesses in this space. In the UK, the Waste and Resources Action Programme (WRAP) provides small-scale infrastructure and revenue support to organizations redistributing surplus food. In the US, the United States Department of Agriculture offers grants to projects focused on food waste.
Will you become a B Corp?
Many businesses in this space are B Corp certified – meaning they're verified to have met certain standards of social and environmental performance, transparency and accountability. It's a rigorous undertaking to achieve – but comes with plenty of benefits.
What messaging will you use?
How you communicate your mission will be critical to your success. Demonstrate exactly how your business is combating food waste, and quantify your efforts with figures and data where possible.
With this popular mobile app, people can purchase surplus food from restaurants and bars – at a fraction of the price it would normally cost. The Too Good To Go app currently has more than 51 million users across 17 countries.
This UK-based service works directly with farmers to deliver thousands of boxes of wonky-looking (but nonetheless delicious) fruit and vegetables – produce that would otherwise be destined for the bin.
Based in California, this food tech company has created a protective layer that can be applied to the surface of fruits and vegetables to help them stay fresher for longer. The plant-based coating is tasteless and odorless to boot.