Meeting The Upcycled Supply Chain Challenge
By Antony Bruno
Consider this… you're looking at two products that seem nearly identical, like a jar of ketchup. The ingredients they contain are the same. But only one has the upcycled certification. Why?
There are three main criteria for becoming Upcycled Certified™. The first, and most obvious, is that upcycled foods must use ingredients that otherwise would not have gone to human consumption. Another is that the ingredients used must have a positive impact on the environment. But the criteria that is the most easily overlooked, and least understood, is that the ingredients must be procured and produced using verifiable supply chains. And this is arguably the most difficult criteria of the bunch.
If it can’t be verified how ingredients get to the product, we can’t certify it as upcycled. For instance tomatoes are a pretty important ingredient in ketchup. If one jar uses “ugly” tomatoes that grocery stores don’t want to put on shelves that otherwise would be wasted, and the other uses conventional ingredients, then the “ugly” ketchup will get the Upcycled Certified™ Mark. Creating a new supply chain that redirects food byproducts and keeps them within the system for human consumption is perhaps the biggest friction in the upcycled food economy.
“It’s not about desire, as there’s not a company out there that wouldn’t jump on the chance to turn waste into profit. It’s not about demand, as 95% of consumers want to do something about food waste, and 70% say they are as or more likely to buy upcycled compared to conventional products. ”
That’s because the current supply chain wasn’t created for a circular economy. The established process assumes a linear progression, where waste is common. The supply chain must be modified and adapted to move upcycled ingredients from the producer of those ingredients to the manufacturers that can use them. It’s not about desire, as there’s not a company out there that wouldn’t jump on the chance to turn waste into profit. It’s not about demand, as 95% of consumers want to do something about food waste, and 70% say they are as or more likely to buy upcycled compared to conventional products.
It’s about how, and how much. If it costs more to upcycle food byproducts than throw it away, companies will continue to discard them. If the end product costs twice as much as a conventional option, most consumers won’t buy it. The solution to both is a functioning supply chain that turns desire into action. But there are barriers. One is location.
Many food production operations are located in rural areas and therefore cut off from easy distribution. Another is communication—knowing who needs the upcycled ingredients and when. For some ingredients, there are stability and preservation issues involved in transportation and storage. These are the main supply chain components the third party certification look at. But there are other considerations to the supply chain worth noting. For instance, solutions that make it easier for food product manufacturers to find the source of certified upcycled ingredients are an important component, such as online marketplaces or brokers. Using such solutions isn’t a requirement for gaining an upcycled certification. But they make it a lot easier to meet the supply chain requirements and create the products that do.
While the ingredient will always play the biggest role in the upcycled economy, let’s take a moment to celebrate the links in the supply chain that play a critical role moving these ingredients through the ecosystem in different ways.
The Producers
Upcycled ingredients come from a large number of sources, making the job of connecting the supply to the demand incredibly complicated. Fortunately, there are companies who aggregate this supply by acquiring the raw upcycled ingredients and preparing them for sale to others. They play an important role, eliminating the need for consumer packaged goods or food service companies from tracking down suppliers of upcycled ingredients directly. Examples include Agricycle Global, International Fragrances and Flavors, PURIS Proteins, and many others.
The Facilitators
One of the key challenges of any supply chain is logistics. In a relatively nascent ecosystem like the upcycled food network, there is a great need for services that can help move upcycled ingredients through the system. These include online marketplaces, distributors, brokers, and technology providers greasing the wheels to make it easier and more efficient for upcycled ingredients to get from the point of creation to the point of use. Examples include suppliers like the Upcycled Beauty Company, Misfits Market, and more.
Tech platforms obviously don’t make or sell certified upcycled products themselves. But they play a role here as well by better connecting the upcycled demand with the supply, making it easier for producers and manufacturers to find each other. One example is ReFED a leader in the development of supporting data, insights, and even capital for the upcycled industry. Another is PlanetFWD, a carbon management platform and product database.
The Creators
The last link in the supply chain is the brand selling the product—consumer packaged goods brands and food service companies who used upcycled ingredients in their products.
Some do so by focusing on “unseen” ingredients that traditionally aren't considered as valuable, such as the fruit around the cacoa nibs, avocado seeds, and so on. Examples include Hidden Gems, Blue Stripes and Riff. Others focus on accepting unwanted “ugly” produce that aren’t the right size or color for grocery stores to sell, such as Del Monte Foods, Shameless Pets and Diana's Bananas.
And while many brands are adapting their legacy supply chains to incorporate upcycled ingredients, new brands have emerged who built their systems and processes from the ground up specifically to accept upcycled ingredients made from byproducts… thus providing a roadmap for others to follow. Examples include Good Sport, Abokichi and many others, with more emerging at a rapid clip.
To discover more companies redefining the food ecosystem through supply chain innovations like these and others, visit the Upcycled Food Association’s membership directory.
Antony Bruno is a freelance food, wine, and travel writer when he’s not ghostwriting thought leadership pieces for technology executives. He is an avid cook, gardener, skier, and father (not necessarily in that order), as well as a music business refugee and journalism vet. He resides in Denver, CO with his wife and daughter.
