Upcycling food production byproducts and overlooked agricultural sidestreams into higher-value ingredients is nearing an inflection point as startups develop technology to more efficiently capture nutrition, functionality and economic value from materials traditionally destined for animal feed, compost or, in some cases, landfills.
While repurposing would-be waste or by-products is deeply rooted in human history, with early examples including feeding scraps to livestock or using stale bread to thicken a soup, the term ‘upcycling’ gained significant traction in the food industry in the 2010s as a tool to combat climate change and feed a growing population.
The movement gained further momentum during the pandemic when the Upcycled Food Association formalized a definition for upcycled foods, launched the Upcycled Certified program and sought to distinguish meaningful innovation from greenwashing.
Many early commercial efforts focused on relatively straightforward applications, such as incorporating spent brewers’ grain into snacks or giving cosmetically imperfect produce a second life in soups, sauces and other prepared foods.
But at IFT FIRST in Chicago last week, startups demonstrated how advances in extraction, refining and on-site processing are shifting the focus from waste prevention to engineering premium ingredients with targeted functionality. Technologies and ingredients showcased at the expo converted everything from sheep hides and wool to produce pomace and bakery scraps into premium ingredients with in-demand health benefits, including specialty proteins, functional fibers and bioactives.
The business case for the next generation of upcycling
While each company showcased a different solution and addressed different end markets, they all shared a common goal of extracting more value from agriculture before nutrients degrade or valuable compounds are lost.
And the size of the prize for startups, established ingredient companies, CPGs and investors working together to solve common challenges in upcycling is enormous, according to Elliott Notricia, the founder and CEO of the startup Symbio Bioculinary, which creates turnkey fermentation platforms that he says enable circularity at scale by turning disposal costs into revenue streams.
Presenting during a pitch slam on the main stage at IFT FIRST, Notricia estimated the opportunity at $137 billion annually.
He explained that is how much is lost in the food and ag processing industries from production and ag excess, including husks, shells and other byproducts that “despite years and years of established academic research and promising innovations” have yet to be successfully commercialized, according to Notricia.
Why? Because the infrastructure is missing, he said.
Building the infrastructure to make upcycling profitable
While he acknowledged that building machinery is the “least sexy idea,” and may not sound interesting, he argued it “is the key to unlocking the scientific potential of enzymatic processing and upcycling technology.”
He explained that the company’s vertically integrated stack includes a product discovery platform, AI-powered automated biorefineries and “high-performance fungal strains [that] are optimized for sides-stream specific enzymatic secretion profiles” for “stable, high-titer performance in industrial applications.”
As a proof of concept, Symbio Bioculinary has a pilot system in the bakery industry that Notricia said converts all the excess trimmings and product, both uncooked and baked, and converts it into sugar that can be used in house.
“By doing this pilot, we demonstrate that upcycling is the key to unlocking the economics of food waste valorization because 80% of the food waste that is produced is highly perishable. We have hours from the time it comes off the line to the time it becomes inedible and unusable,” he said. “By capturing this value on site before it becomes waste, we are able to create food-grade human edible lipids, antioxidants and sugars that go into existing markets.”
Even if a company didn’t use the output, the technology could deliver return on investment by eliminating hauling, associated emissions and challenges associated with disposal, he said.
Turning one waste stream into multiple ingredients
As Symbio reimagines where ingredients should be recovered, other startups – like Hyfé – are rethinking what valuable compounds can be upcycled in the first place.
Hyfé has created a proprietary, solvent-free refining process that can convert side streams from produce and nut processors, such as peels, seeds, pits and skins, into high-value functional ingredients, including soluble fiber and bioactives, said Megan McEvoy, chief of staff at Hyfé.
For example, she said, the company has explored creating soluble fiber that dissolves clear into beverages with minimal taste impact and which is more easily digested as well as stable at high pH and high temperatures – allowing it to go into shelf stable products.
“On the bioactive side, we have antioxidants, polyphenols, antimicrobial solutions that could be used for food preservation,” including as a replacement for BHA and BHT, she said.
While it is still early days for Hyfé, the company plans to build out a whole supply chain and is in talks with upstream partners with fruit and vegetable waste and downstream partners, such as CPG companies, that could use the ingredients.
“One of the biggest challenges with upcycling is the consistency of the supply. When you are starting with a waste stream that varies in volume and quality, managing that upstream supply is key for downstream offtake partners. They don’t want something that is only available certain months out of the year or might be available this year but not next year. And that is a priority for Hyfé,” McEvoy said.
As a seed stage company, Hyfé does not have commercial product available yet, but is operating a pilot scale and running benchtop trials. It is seeking partners on both sides of the value chain.
Discovering hidden functionality in overlooked materials
While Symbio and Hyfé are focused on building the platforms and processes needed to unlock value from a broad range of agricultural side streams, other startups are identifying entirely new ingredient opportunities hidden within overlooked materials.
One example is Tertiary Extracts Otautahi, which is transforming a traditionally low-value animal byproduct into a highly specialized bioactive ingredient – Ovitage – designed for women’s health.
“Ovitage is a brand new peptide upcycled from sheepskins, wool and quite critically from the follicles in between. That means we get protein from the skin, from the wool which is 95% protein, and we are also getting really interesting, powerful signaling peptides from the follicles,” said Paul Sapsford, co-founder and CEO of Tertiary Extracts Otautahi.
He explained that Ovitage “is a collagen, but not as you know.”
For example, he said, signaling peptides are different from other peptides in that they trigger a repeating impact, whereas other peptides offer a one-on-one impact before they are assimilated.
“We have well over 100 different peptides in our mix, so it is somewhat hard to isolate them. But our extraction process keeps the signaling peptides. We don’t know too many other companies, if any, that are able to extract and incorporate these signaling peptides into their product. So we are pretty excited about using that a differentiator,” he said.
Ovitage is high in cystine, tyrosine and glutamic acid, for a combined impact that supports gut, joints, mood, cognition and muscle, according to the company. It is also highly bioactive, very soluble and a clear protein.
The ingredient and company also standout from the competition because they target women’s health.
“We all know that only about 2% of research is done on women. So we’ve worked hard to find a lab that does have female cells. We’ve done in vitro work with them, and all of our human clinicals are done with women as well,” said Sapsford.
The targeted research includes Ovitage’s impact on the gut.
“Seventy percent of women experience gut issues at some time during their lives and in particular during perimenopause. It tends to wreck the gut lining. But we’ve shown that our material can support and even repair the gut lining from the mucosal surface through the basement membrane and the tight junctions in between,” Sapsford explained.
The ingredient also can bolster the structure of the hair follicle and the company has demonstrated it helps anchor hair more strongly to reduce loss, which is a challenge for 40% of women, he said.
Ovitage has GRAS status and can be used in supplements and as a functional ingredient in food, said Sapsford. He added that it is available now as the company has a factory in New Zealand, a warehouse in the US and “a couple of big commercial leases coming in the next quarter, so we are perfectly poised to help American women.”
Takeway
Collectively, these companies show that food upcycling is moving beyond its first chapter, in which success was measured by how much waste could be diverted from the landfill, and into a phase defined more by the ability to recover high-value ingredients with specific nutritional and functional benefits.
As the technologies continue to mature, tomorrow’s most valuable food ingredients may not come from newly cultivated crops, but rather from agricultural sidestreams that processors have long overlooked or been unable to access.
