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Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.
While wandering through the local supermarket, it was impossible to miss the cornucopia of food on display for this week’s Thanksgiving holiday. Enormous turkeys, stacks of pies and mounds of onions and sweet potatoes made the aisles nearly impassable.
Yet much of that food will be thrown out: an estimated 143mn kilogrammes, or $556mn worth of groceries from Thanksgiving alone. It is part of a much larger problem that sees the world waste up to one-fifth of its food and contributes 8 to 10 per cent of global greenhouse gas emissions, according to the UN.
Much can and must be done to convince individual householders to buy less and use purchases more wisely. New York City adopted mandatory composting last month, and programmes such as City Harvest are making it easier for restaurants and grocers to donate leftovers to the needy.
But cutting waste cannot rely on charity or stop with end users. Companies should seize the burgeoning opportunities created by improved technology and changing tastes. Some are already finding profitable ways to prevent waste or convert it into products people want to buy.
Irish start-up Senoptica prints inexpensive sensors on ground beef packaging to help identify meat at risk of going bad and reduce waste caused by arbitrary “use by” dates. Raw beef is packed with oxygen gas to preserve freshness, so if a sensor detects a leak during packing, the meat can be immediately rewrapped. Later on, packages with falling oxygen levels can be discounted for quick sale or thrown out, while the sensors allow sellers to continue to confidently stock the rest.
The sensors will get their first real world test when a large online grocer starts rolling them out this spring, says co-founder Brendan Rice. A deal with a bricks-and-mortar retailer is also expected soon.
Elsewhere, investment group Butterfly Equity is putting its chips on “upcycling”, the process of converting food byproducts into something more appetising. Two years ago, it bought what is now known as Actus Nutrition, a company that purchases whey left over from cheesemaking and turns it into food, including protein powder and nutritional ingredients.
Big cheesemakers have been doing this in-house with their own byproducts for years. What makes Actus interesting is that it gathers whey from midsized dairies that cannot afford to process it and so had previously treated it as waste or sold it cheaply to animal nutrition companies.
The company is now well positioned to profit from the rising interest in protein supplements that has been supercharged by the extra protein needs of users of “GLP-1” weight-loss and diabetes drugs such as Ozempic. The sports nutrition market is growing at 8 per cent a year, four times faster than cheese.
Another Butterfly company, Chosen Foods, is trying to pull off a similar trick with unwanted avocados. Specimens that were too damaged for sale or use in guacamole used to be spread on the fields or discarded. Now Chosen processes them into a cooking oil that is gaining popularity for its high smoke point and neutral flavour.
That use provides farmers with additional income, and helps wring extra value from the massive amounts of water already being used to grow avocados for immediate consumption. It also creates local jobs. Given that it is so much cheaper to ship oil than avocados, Chosen’s supplier has started investing in oil processing plants near where the fruit is grown.
The company expects to benefit from the election of Donald Trump. His new health tsar, Robert F Kennedy Jr, has campaigned vociferously against canola and other seed oils that compete with Chosen Food’s products. “Demand is going through the roof,” says Aaron Kirkbride, a Butterfly managing director. “More and more people are understanding its benefits every day.”
Not every company can count on political tailwinds. But those that want to profit from sustainability must do more than just appeal to consumer idealism. A recent poll commissioned by Sodexo found that the share of shoppers worldwide who have a positive view of sustainable food dropped 6 percentage points to 38 per cent this year, and is now below 30 per cent in western economies where inflation has hit hard. And no matter where people live, they are three times more likely to cite price over environmental impact as a driver of their food choices.
Waste not, want not, the adage goes. Perhaps it is time for a capitalist update: waste less, earn more.
