Every year, billions of dollars in food production value literally go to waste—discarded in the form of orange peels, bruised apples, spent brewery grains, pork bones, and coffee grounds. According to a 2024 report by Second Harvest, nearly half of all food waste in Canada happens during processing, much of it in the form of byproducts like this. These byproducts aren’t useless, but they often end up treated that way. Not because they have no value, but because most businesses lack the systems to capture it.
Nature doesn’t have waste—every output feeds something else. The same can be true in food manufacturing, where byproducts are not inevitable, but rather a result of lacking the tools or systems to realize their hidden potential. Fortunately, new technologies and business models are making it easier than ever to turn what was once discarded into valuable new products.
Food manufacturers that treat byproducts as waste are leaving money on the table. The companies cashing in on their waste aren’t waiting for a perfect solution, they’re building their own. Here are four ways to do the same.
Forge Circular Economy Partnerships
In Halifax, Nova Scotia, a group of businesses have cracked the code on waste-free manufacturing by recycling each other’s byproducts into valuable inputs. This miniature circular economy includes Sustane Technologies (a solid waste processor), Smallfood (a microalgae ingredient developer), Oberland Agrisciences (an agrifood biotechnology company), and Sustainable Blue (a land-based aquaculture fishery).
Organic waste, like spent brewery grains, are salvaged by Sustane and incorporated into aquaculture feed developed by Oberland Agriscience. Oberland’s feed also uses unsaleable produce sourced from local supermarkets, and Smallfood’s microalgae—a sustainable source of protein and omega-3 fatty acids that is produced using far less land and fresh water than conventional animal protein sources. The feed is used by Sustainable Blue, who in turn send all of the waste from their closed-loop fishery to a methane digester to generate electricity.
This is just one example of how creative circular economy partnerships between food producers, processors, and ingredient developers can help unlock value from even the unlikeliest of byproducts. Take a page from this model by considering how like-minded businesses in your region could help you transform waste into new products, cut costs, and build more sustainable supply chains.
Tap into Existing Upcycled Ingredient Markets
More businesses are finding innovative ways to turn food byproducts into valuable ingredients, creating new opportunities for manufacturers to reduce waste and generate revenue. That’s exactly what LOOP Mission is doing in Montreal. For nearly a decade, LOOP has transformed rejected supermarket produce into cold-pressed juices and smoothies, rescuing over 20,000 tonnes of food that would have otherwise gone to waste. Now, with the launch of LOOP Synergies—a dedicated upcycled ingredients platform—they’re helping manufacturers monetize byproducts and incorporate sustainable ingredients into their own formulations.
Similarly, Nova Scotia-based RFINE Biomass Solutions is creating new value streams for the food industry by upcycling spent coffee grounds at the source. Using in-store drying systems placed in cafés and restaurants, RFINE transforms waste coffee into shelf-stable, nutrient-rich ingredients that can replace cocoa in brownies, cookies, protein bars, and beyond. By processing waste on-site and partnering with ingredient buyers, they’re closing the loop between foodservice operators and manufacturers.
Whether you’re looking to reduce waste disposal costs or develop products with sustainability in mind, innovators like LOOP and RFINE offer manufacturers a direct path into the growing market for upcycled ingredients.
Investing in Waste Stream Valorization
While circular economy partnerships and B2B upcycled ingredient markets can be great for selling byproducts with pre-existing demand, some of the biggest opportunities come from identifying and developing new uses yourself.
The dairy industry provides one of the most compelling examples. For decades, whey-laden cheesemaking wastewater was nothing more than an expensive—and environmentally destructive—disposal problem for processors. But, when isolated, whey is an exceptional source of protein and other essential nutrients. Once dairy processors invested in and developed new filtration, drying, and fractionation technologies, whey transformed from waste into a high-value ingredient for sports nutrition, infant formula, and functional foods. By 2030, the Canadian whey protein market is projected to hit $1 billion USD—a stunning reversal for an ingredient that was long considered a valueless byproduct.
But investing in new processes is only half the battle—the other half is defining the value proposition and finding the right buyers. Whether it’s extracting fibers, proteins, or bioactives from food byproducts, your biggest waste stream valorization wins will come from understanding market gaps, branding the ingredient effectively, and positioning it as a premium ingredient—one that you control and profit from directly.
Closing the Loop Back to the Land
Not all food waste can be upcycled into new products. Some byproducts are too perishable, contaminated, or lacking a clear market—at least for now. Circular economy partnerships and byproduct valorization take time to develop, and in the meantime, food manufacturers are still left with large volumes of organic waste.
But even here, waste is still an untapped resource. Investing in industrial food waste recycling and composting systems, like those developed by Food Cycle Science, allows manufacturers, restaurants, and even municipalities to reduce organic waste volume by up to 90% and bring the food cycle full circle. These units convert food scraps into a dry, odorless, nutrient-rich soil amendment, which can then be sold to farms, landscaping companies, or garden centres to return nutrients and organic matter back to the soil. Lower waste disposal costs, an added revenue stream, and stronger sustainability performance—it’s a rare win-win-win.
From Waste to Revenue: Where to Start
Shifting from seeing byproducts as waste to treating them as valuable resources requires both a mindset change and a strategic approach. The best place to start is by conducting a comprehensive waste stream audit. This allows you to identify and quantify your highest-volume and highest-potential byproducts. From there, you can explore which of these strategies aligns best with your operational realities and regional opportunities.
Waste is still too often seen as an unavoidable cost of doing business. But when you break it down, every discarded byproduct represents lost value and untapped potential. The food companies leading the way are finding ways to make waste streams work for them. By seeing waste for what it often really is—a misallocated resource, not a valueless byproduct—you too can start filling your pockets instead of our landfills.