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Food Waste
Overview
Food waste deserves better than landfills
Global food waste continues to rise, and the US alone has seen food waste triple over the past five decades. Consumers have noticed and have begun voicing their concerns and increasingly taking action by demanding attention from corporations and regulatory bodies. The UN and the US governments have set the goal of halving food waste by 2030. This bodes well for a group of companies that are attempting to create a business out of food waste. The food waste management tech ecosystem includes developers of products that 1) prevent food wastage (i.e., reduce the volume of surplus food), 2) optimize food surpluses (resale or donation of food waste and oversupply), and 3) recycle waste for food, beverages, animal feed, or industrial use.
Industry Updates
Market Sizing
The US food waste management market could reach USD 18.6 billion–25.2 billion by 2027
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Use cases
Food Waste-based solutions are focused primarily in the Consumer Staples industry. This specifically includes the Consumer Staples Merchandise Retail subsegment, followed by Agricultural Products and Services. However, we believe use cases across diverse industrial segments like Healthcare, Communication Services and Information Technology are relatively sparse at present, it nevertheless indicates potential for Food Waste solutions to expand within these industries.
The adoption levels for upcycling surplus food/food processing waste/by-products are relatively high, considering they provide a means to generate value from waste that would have typically ended up in a landfill while generating a positive environmental impact and capitalizing on rising consumer demand for upcycled food products. Additionally, demand management/inventory planning solutions have been popular with businesses, as they provide a data-driven approach to streamline operations and minimize waste while delivering financial benefits to businesses.
We have identified key Food Waste use cases below:
Market Mapping
Recycling startups account for more than one-third of food waste industry disruptors and incumbents. The majority of these companies focus on recycling food waste into edible food and beverages. Despite having attracted the least amount of funding, these players are at either the go-to-market or expansion stages of product development and customer acquisition.
Businesses focusing on redistributing surplus food via online platforms represent 33% of the industry’s disruptors and incumbents with several such as Misfits Market and Hungry Harvest reaching relatively high levels of brand awareness.
Waste prevention technology is a highly funded segment of the industry, after redistribution, with funding of around USD 623 million as of March 2021. The majority of these providers offer edible coating, smart packaging, or tracking systems to manage and prevent waste in the early stages of the food supply chain.
Waste Prevention Technologies
Redistribution
Recycling - Industrial Use
Upcycling - Food and Beverage
The Disruptors
Most startups in the food waste management industry focus on recycling food that is being wasted or redistributing them via online platforms. Most of these companies are in the expansion stage, with successfully commercialized products and international expansions underway. In contrast, a smaller number of players focus on food waste prevention technologies such as packaging that extends shelf life, protective food coating, and devices that track and monitor food wastage. These startups are also mostly at the go-to-market or expansion stage and have existed for several years or longer compared to players in the other segment. This dynamic can largely be attributed to the longer timeline required for food protection technologies.
However, food prevention technology companies have attracted nearly USD 623 million in funding, more than the recycling segment of the industry—in part due to high R&D, prototyping, and regulatory costs.
Funding History
Competitive Analysis
Incumbents
Incumbents are mainly traditional waste management and food industry giants
Most food waste industry incumbents are already established as providers of general waste management services and are now developing smart waste management techniques that involve recycling or redistributing food waste. Some leading food industry companies are also starting to adopt food recycling methods to prevent wastage including Kellog’s, Tyson Foods, Kroger, and Unilever.
There is a lack of incumbent activity in the food prevention technologies or online platform spaces, implying that these are still emerging trends within the industry. However, major IT firms like IBM are developing smart waste management solutions.
Overall, incumbents mostly appear to be developing their food waste management services in-house, although there are a few notable partnerships and acquisitions.
Notable Investors
