The Next Economy
Upcycled Food Industry a Nascent Leader in Sustainability, Climate Solutions

One of my favorite parts of serving as CEO of Upcycled Food Association (UFA) is getting to know our Members and Associate Members — savvy, food system vets meet charismatic, likeable entrepreneurs in this emerging industry. Last month, we got to know our Membership a lot better via a first-of-its-kind upcycled food industry survey. After all, there is still a lot to learn about the fledgling industry, which creates new, valuable food products out of the overlooked nutrients falling through the cracks in our food system. The survey revealed several interesting findings, which I think demonstrates the scale of the upcycled food opportunity. 

Finding #1: Upcycled products are sold in at least 9,000 grocery stores across 10 countries. By comparison, organic items are sold in about 20,000 natural food stores, equal to about half of the 40,000 total food stores in the US. Wait, you mean upcycled food products are sold in almost half the number of US stores that carry organic products? Keep in mind, the organic category has been gaining momentum for decades, and the upcycled category hasn’t even been officially defined yet (UFA and its research partners will be releasing the first official definition of ‘upcycled food’ later this month). With such significant grocery store reach, why hasn’t upcycled food achieved the proportional level of ubiquity as organic food?

The answer is right on the labels of the food we buy while perusing the aisles: the USDA Organic seal. When you buy something organic, you know it. Companies spend a lot of money to make sure you know it, enduring the rigorous process of organic product certification. Grocery stores spend a lot to ensure you know it, installing permanent organic kiosks in stores. This is all because products labeled as organic can be sold for more — up to 300 percent more — according to Consumer Reports. This increased price is possible because of consumer preference.

Consumers increasingly want to align their food purchases with their social and environmental values. 95 percent of consumers want to reduce food waste in their lives, so there’s a strong argument that they deserve to know which products help to achieve this. UFA plans to make that a reality later this year through a product certification program.

Multiple recent studies, such as this one from the University of Otago, have shown that more than half of consumers want to buy more upcycled foods. But how can the average person do this without knowing which products contain upcycled ingredients? They are hiding in plain sight! This is the premise of the Certified Upcycled Program, which will be launched later in the year, giving the 400-and-growing upcycled products currently on the market (Finding #2) the ability to shine. A 2017 study from Drexel University showed that consumers assign even greater positive environmental impact with upcycled food than organic. The certified upcycled label will put this evidence to the test. Unlike organic, the upcycled certification will be based on outcome, rather than activity. In other words, we envision a food package that is able to explicitly say to the consumer, “Here’s how much food waste you’re reducing by purchasing this product.” What better way to allow food shoppers to vote with their dollars! I predict the certification program will greatly increase the prominence of upcycled food as a category. At UFA, we envision a grocery store of the future, in which upcycled alternatives exist alongside their organic and conventional counterparts. Upcycled food is the choice for consumers who want to participate in what could be the greatest solution to climate change every time they visit the grocery store. 

I’ve said the following on a few podcasts recently, and I’m dying for someone to prove me wrong: “In light of a capitalistic food system, reducing food waste is the only place where the values of the environment and the values of business inherently overlap.” Someone, please prove me wrong. Until you do, I’ll continue touting upcycled food as the best place for any impact investor to invest in food; or at least the investors who agree with the Intergovernmental Panel on Climate Change — which says that we have basically one decade to stop the most devastating effects of climate change; or the investor who believes Project Drawdown, the world leader on ranking climate change solutions — which ranks reducing food waste as the number one solution to the climate crisis.

And apparently, the upcycled food industry is ripe for investment. Finding #3: Most upcycled food businesses are in the startup phase, and many are actively fundraising in the next year. Last year, Future Market Insights produced a report in which it estimated that the value of the upcycled food economy was more than $46 billion, and predicted a five percent compound annual growth rate over the next decade. The UFA postulates that this growth could be accelerated by unifying the upcycled food industry under one tent.

As demand grows alongside the ubiquity of the upcycled product certification, these businesses are poised to provide a healthy economic return; though, the biggest return of all may be in the environmental benefit. Finding #4: Upcycled food businesses are preventing at least eight million pounds of food waste per year, equivalent to millions of pounds of CO2 emissions prevented, and millions of gallons of water saved. Imagine the impact when larger, established brands begin to include even small amounts of upcycled ingredients in their recognizable products. I predict that within the decade, upcycled food will prevent at least one billion pounds of food waste per year. 

Finally, the survey revealed something we already knew. Finding #5: There’s still a lot to learn. The larger food waste movement is still in its adolescent wild west phase of disorganization and fragmentation. The upcycled food industry needs to do its part by unifying under one tent. That means using a singular, collaborative lexicon — co-creating our messaging strategy, and implementing better systems to track environmental impacts. It was to serve this purpose that upcycled food businesses co-founded the Upcycled Food Association late last year, and with these tools that we’ll build a world-class sustainable food category.