Wasted food is a major drain on business and on the planet. Shelf Engine, a perishable food forecasting specialist, estimates that supermarkets alone discard more than 43 billion pounds of food each year and that excessive food waste costs the grocery industry more than $50 billion in lost profits annually. Project Drawdown, a nonprofit dedicated to climate change reduction, also estimates that 8% of human-cause greenhouse gas emissions come from food loss and waste and 28% of agricultural land goes to grow food that is never eaten.

These facts and figures led social entrepreneurs-activists Ben Gray and Turner Wyatt to found the Upcycled Foods Association (UFA) in 2020. In just three years, UFA has enlisted as many as 230 members worldwide and says it has diverted an estimated 840 million pounds of food waste from landfills. Along the way, it created a third-party validation process and has officially certified as many as 236 upcycled food products and ingredients.

Consumer Appeal

It was several years ago when Innova Market Insights first saw signs of growing consumer interest in upcycling. One-quarter of participants in the 2021 Innova Trends Survey agreed that “a product that contains upcycled ingredients is more appealing to me than other products.” Furthermore, respondents perceived that sustainability, healthiness, and freshness helped improve the quality of upcycled ingredients. Nearly all of those surveyed also said they would actively prevent or reduce food waste.  

These findings were consistent in 2022. Innova’s consumer research shows that in many parts of the world, the health of the planet has taken over as the top consumer concern—even ahead of health of the population. Consumers continue to say that efforts to minimize food waste are the most important in which they address their own impact on the environment. They likewise agree that upcycling, recycling, and repurposing also are positive steps.

More than one-third of consumers polled for the 2022 Trends Survey (including higher proportions of Generation Z and Millennial consumers) claimed that upcycled products are more appealing than regular products in regard to sustainability, health and taste. However, only one-quarter of all consumers (particularly younger cohorts) are prepared to pay more for such products. Interestingly, another 25% of those surveyed said they expected to pay less for finished products with ingredients that would have been wasted.

In the end, consumers can only go so far by themselves. Many focus on buying less and/or making the most of what they buy—either by using every part of the food or sharing surplus with people around them. Industry, in turn, has a clear role to help consumers eat more sustainably. This is where upcycling comes in.

A Continuing trend

One of Innova Market Insights’ Top 10 Trends for 2022 was “Upcycling Redefined.” It acknowledged growing consumer interest in food waste reduction as well as the positive perception of upcycled ingredients.

As mentioned, this trend demonstrates the rise of a growing circular economy and use of byproducts that previously were considered waste—but are now recovered as ingredients. This overall trend provides manufacturers with opportunities for storytelling.

Although we did not explicitly name upcycling as one of Innova’s top trends for 2023, the practice fits in several of this year’s themes. One of this year’s trends, “Redefining Value,” recognizes the various trade-offs consumers are willing to make—including their support for products with upcycled ingredients. Another trend, “Positively Imperfect,” acknowledges that consumers are not seeking perfection in their quest for sustainability. Upcycled ingredients certainly could gain the acceptance of consumers who might view upcycled ingredients as less-than-perfect as waste stream products—but still perfect in terms of fit in a circular economy.    

According to data from our Innova Market Insights Database of global food and beverage launches, North American food and beverage launches with a food waste and/or upcycling claim experienced 52% average annual growth between 2017 and 2021. Globally, new product launches tracked with mention of “upcycling” or “waste reduction” demonstrated indexed growth of 84% from 2018 through 2021 and compound annual growth of 62% between the second half of 2017 and the first half of 2022.

Interestingly, even indulgence categories such as confectionery are participating in the upcycled ingredients movement. When it came to new chocolate confection launches between 2016 and 2021, 33% of those new products touted use of the whole cocoa pod rather than just the bean.

Ingredients, Angles

The upcycling universe is fascinating on many levels. One interesting aspect is that it involves companies occupying as many as three distinct roles. Some are pure suppliers who convert byproduct and sell upcycled ingredients. Many more are true food and beverage manufacturers who simply buy and incorporate upcycled ingredients into finished product formulations. And then there are those companies equally invested in both ingredients and finished products. 

One of the most active upcycled ingredient areas involves brewers’ spent grains. A byproduct of beer production, spent barley and wheat grains are rich in protein and fiber. Upcycled Foods Inc., Berkely, Calif., purchases and refines spent brewers’ grains for its own ReGrained SuperGrain+® ingredient, which it sells. Meanwhile, the company also uses the ingredient in its ReGrained retail packaged products, developed to demonstrate proof of concept for a range of upcycled foods such as bars, puffs, bakery mixes and co-branded pasta. Or how about this story at an even larger scale? After several years of preparation, global brewer Anheuser-Busch InBev, St. Louis, created EverGrain, a separate entity, to capture, refine and market its own spent brewers grain barley protein. Last year saw EverGrain open its own dedicated facility to process and sell EverPro® as an ingredient for nutritional bars, drinks and other products.

Yet another active industry leader is Renewal Mill, Oakland, Calif. In this case, Renewal Mill focuses on the various byproducts of plant-based milk production (i.e. “okara” soybean pulp, oat pulp, and almond pulp). The company dries and mills the pulps into fiber- and protein-rich ingredients such as organic okara flour, oat protein, and high protein sunflower seed meal. Likewise, Renewal Mill also packages and sells its own gluten-free flours, bakery mixes and finished cookies. 

Ingredients, Innovation—On Display

Upcycled ingredients were showcased at the 2022 IFT FIRST Annual Event and Expo. UFA had its own pavilion. One of those companies showcasing upcycled ingredients was FruitSmart, Inc., Prosser, Wash., which markets upcycled fiber and seeds left over from its production of fruit concentrates, juices and purees. Other processors tapping into their own ingredient streams were Dole Specialty Ingredients, which upcycles pineapple cores and pulp, green bananas, and papaya seeds after fruit cocktail production; and juice processor Ocean Spray Cranberries Inc., which upcycles cranberry seeds for inclusion in baked goods.

Global chocolate giant Barry Callebaut supplies a wide range of ingredient chocolate and cocoa products to large and small manufacturers as well as chocolate artisans. In 2020, it created a separate entity, Cabosse Naturals, to process and effectively upcycle all of the cacaofruit not used for chocolate (everything after the seeds / beans). Today, Cabosse offers cacaofruit pulp, juice and concentrates for a range of finished products including beverages, ice creams and confections.

Having first researched how to recover barley protein from brewers’ spent grains, Apparo Inc., Eden Prairie, Minn., applied the same process to sunflowers. After sunflower oil is processed, Apparo says it converts leftover seed into usable protein and other micro-nutrients.

Another on-trend, upcycled ingredient involves whey, the protein-rich liquid byproduct of cheese and Greek yogurt production. It is highly desirable for its protein content, as well as its functional properties that include water binding, browning, foaming, emulsification, flavor enhancement, and texture shortening. At a time when processors also might be looking to eliminate allergens or reduce supply chain costs, whey proteins also can function as a partial or full egg replacement.

In Finished Form

It’s no surprise that many finished food and beverage companies are incorporating upcycled ingredients as an important competitive point of difference—and appealing to those consumers who value planet-friendly sustainability. 

Montreal’s Still Good specializes in the upcycled foods space—offering cookies, flour, and granola all produced with spent barley, oat, and wheat flour from beer production.  Its website notes, “Our transformation processes allow us to upcycle all sort of by-products, such as spent grain, fruits and vegetables and pulps… We also transform residues from the production of coffee, cider and bakery products.”

Products that incorporate dairy whey range from beverages to cookies and snacks. Kuhl LLC, Springfield, Mass., was among the first to market with its Superfrau line of whey-based “sparkling functional” drinks. The Spare Food Co., New York, N.Y., says it “sees ingredients where others see waste.” Its first four-item line features an effervescent drink called Spare Tonic made from whey, fruit, spice, and honey. Wheyward Spirit LLC, Portland, Ore., created an entirely new specialty alcohol fermented spirit incorporating the lactose in whey.

On the food side, Whey Better Cookie Company, Brighton, Mich., markets whey protein-rich cookies. Another Michigan company, Snack House Foods, Monroe, Mich., appeals to keto adherents and uses upcycled whey in its high fat, high protein, low carbohydrate snacks and cereals.

Imperfect fruit offers tremendous opportunity. The Ugly Company LLC, Kingsburg, Calif., won the 2022 Kroger Go Fresh & Local Supplier Accelerator award for dried fruit snacks made from upcycled, “ugly” fruit. Products include upcycled dried white nectarines, kiwis, cherries, peaches and apricots. The company’s website notes that thousands of truckloads of ugly fruit are thrown out in California every year, including “more peaches … than the state of Georgia produces annually.” Another company with the same mission is RIND Snacks Inc., New York, N.Y. Launched in 2018, RIND says sources produce that would have been discarded and “gently dehydrates” the whole fruit with its nutrient-rich skins intact.

Also following the same path is The Frozen Farmer, Bridgeville, Del., which makes ice cream and sorbet products with imperfect produce from its own farm.

Looking across the global food and beverage industries, the number of products with upcycled ingredients far exceeds those that display the Upcycled Food Association’s certification. Based on Innova’s tracking of product launch data, we predict that the upcycling movement will continue to expand and incorporate new kinds of previously-wasted raw materials and ingredient concepts.

Lu Ann Williams is Global Insights Director at Innova Market Insights, provider of market research services including the Innova Database. With more than 25 years’ experience in the food industry, Lu Ann is a trend expert and frequent public speaker at events worldwide. She leads a team of analysts and works with global clients. Contact her at luann.williams@innovami.com.