Upcycling is becoming a popular trend. Its growth is eye-opening and creates many prospects for food and beverage companies.
So, what is upcycling? Well, it’s the opposite of downcycling, which involves converting materials and products into new materials of lesser quality. The practice of upcycling is transforming by-products, waste material and unusable or unwanted products into value-added products.
The upcycled food waste industry was worth US$46.7 billion in 2019, and it has an expected CAGR of five percent for the next ten years, according to Future Market Insights. Born in the fashion industry, the term “upcycling” is perceived to be a form of recycling and bestows many environmental virtues.
Upcycle Market Value
According to a Mattson survey, 39 percent of consumers currently wish to buy food and beverages using upcycled ingredients. That number surges when looking to the future, with 57 percent of consumers planning to buy more next year. A Drexel University study found consumers would pay more for upcycled products than conventional products.
Why is upcycling a growing trend? Simple – it solves several sustainability challenges. The United Nations estimated $400 billion of food is wasted before it even gets delivered to stores. On average, an individual American wastes one pound of food each day. The problem is most significant in the US, with 133 billion pounds of food thrown out each year, according to the US Department of Agriculture (USDA).
When we waste food, we also waste all the energy and water it takes to grow, harvest, transport and package it, according to the World Wildlife Fund (WWF). And if food goes to the landfill and rots, it produces methane – a greenhouse gas. About 11 percent of all the greenhouse gas emissions from the food system could be reduced if we stop wasting food. 2020 PwC’s 23rd Annual Global CEO Survey shows industries that invest in climate initiatives will boost reputational advantage and afford significant new product and service opportunities.
The most significant barrier to success is consumers not recognizing the value of food waste. Researchers at the USDA analyzed eight years of food data to see where food is wasted and what members of the public say they do at mealtimes. The study found consumers don’t see the cost when they throw food in the trash.
In contrast, upcycled products tend to be more expensive to produce than their counterparts. Demand is growing but not at a fast enough pace to bring down the prices of products made with upcycled ingredients. However, many consumers believe they should be cheaper, as they think the ingredients are made from leftovers and waste.
Upcyled Food Success Stories
That said, several food and beverage companies are exploring upcycled ingredients and finding success. For example, the company WTRMLN WTR finds a home for what the industry refers to as “discarded melons” – watermelons discarded due to blemished – and creates a melon water. The company believes by giving a home to these discarded melons, farmers could turn a loss into a profit.
Another example is Toast Ale which turns leftover bread into a long-lived and lucrative craft ale. Using roughly one slice per bottle, the team of three has recycled 3.6 tons of bread in its first 15 months.
Upcycled ingredients could be a big opportunity, especially if a brand is targeting Millennial and Gen Z consumers. These demographics tend to be most concerned about climate change and sustainability. However, to be successful, a product will require a significant investment in consumer education. It is important to deeply understand the wants and needs of a target market, along with the barriers and benefits to purchasing, and then properly tailor strategies and messages.
Highlighting the product’s positively-viewed attributes, such as innovativeness, novelty and nutritional value, will be key in addressing any appearance and cost scrutiny. With the right message and marketing, an upcycled product could command a higher price than conventional products.