Key takeaways:
- The biggest roadblock isn’t the science – it’s scaling and stakeholder buy-in.
- Nutritional benefits, not just eco claims, will convince shoppers to pay.
- Collaboration works best when IP, data and supply reliability are nailed down early.
Food manufacturers love to talk about upcycling. The idea of turning spent grain, surplus bread or crop leftovers into snacks, flours or even biofuels is irresistible in an era where both margins and sustainability targets are under pressure.
But here’s the rub: while pilots keep popping up, large-scale rollouts remain the exception rather than the rule. Too often, byproducts are still shunted into animal feed or energy, safe but low-value options that miss the bigger commercial prize.
According to Dr Justin Weeks, consultant at Sagentia Innovation, the gap between ambition and reality comes down to two things: complexity and coordination. “Detailed scientific knowledge of the byproduct or waste composition is needed to identify the nuggets of gold,” he says. “This should be combined with a broad view of different markets so you don’t limit the opportunity to what you are familiar with.”
And even when companies do find that nugget? Dr Weeks warns: “It’s not uncommon for a successful small-scale demonstration to fail when it comes to scale up. Failure often boils down to a lack of alignment between production, commercial, and legal management teams.”
Tech vs market: why ‘safe bets’ can hold you back
Most companies, says Dr Weeks, stick to approaches that present the lowest commercial risk, which explains why animal feed and low-tech waste streams remain dominant. “However, this limits the exploration of new technology-led solutions that may generate more revenue,” he argues.
Take dried lignocellulosic waste from milling. As feed, it’s a commodity. But repurposed for biochemical applications, the returns could be far greater. The catch? Tech-led approaches aren’t guaranteed moneymakers. “A viable upcycling process won’t necessarily generate decent returns,” cautions Dr Weeks.
What is dried lignocellulosic waste?
When grains like wheat, corn or rice are milled into flour, there’s more left behind than just the good stuff. You also get a pile of fibrous material – bran, husks, stalk bits – that’s rich in cellulose and lignin (the compounds that make plants tough). This is known as lignocellulosic waste.
Once it’s dried, it’s typically sent to animal feed or burned for energy. But researchers say it has far bigger potential: it can be processed into bioethanol, biochemicals and even food-grade ingredients that add fiber or functional value.
In other words, it’s the forgotten byproduct of milling that could be a goldmine if the right technology is applied.
The big three byproducts to watch
So where should bakers and snack players focus? Dr Weeks puts lignocellulosic biomass top of the list. “This can be used in second-generation bioethanol production for fuel or alcoholic beverage applications.”
He also points to cellulosic sugars from crop waste, with potential across food, beverage and chemicals. Extraction technologies are improving but yield and cost efficiency still need work.
Finally, economics are shifting around biomethane. With the European market poised for rapid growth, diverting food waste to anaerobic digestion could soon make commercial sense. Byproducts with high nitrogen content also hold promise for fertiliser production – particularly relevant as fertilizer costs rise.
From ‘waste’ to ‘worth’
Consumer buy-in is often underestimated. Dr Weeks stresses that sustainability alone won’t shift products. “Ideally, an upcycled product needs to offer additional value beyond sustainability claims,” he says. Fortification with fiber, protein or micronutrients is a smart way to win over shoppers in bakery and snacks.
Collaboration is another hot button. Done well, it accelerates innovation. Done badly, it derails projects. “The sharing of data and IP is a core aspect,” he adds, warning that nutrition data must be on the table early and supply reliability checked thoroughly. Existing contracts with waste handlers can be a silent killer, blocking new routes for by-products.
The road to 2030
Despite the hurdles, Dr Weeks believes bakery could be leading the pack by 2030. “Many bakery companies have set food waste reduction targets for 2030 and are making progress towards these goals.” The commercial case is strengthening, too: upcycling is one of the rare sustainability plays that can deliver tangible revenue.
Enablers will include demand growth in biomethane and fresh biotechnologies for more efficient fermentation. “Ambitious companies that approach upcycling with a strategic mindset and invest in technologies to accelerate adoption will set the pace for the wider industry,” says Weeks.
Case in point
Aldi has shown how bakery byproducts can be transformed into something shoppers genuinely want. Partnering with Toast Brewing and Freedom Brewery, it launched two beers brewed from surplus Tiger bread and ‘wonky’ fruit.
The move will save an estimated 4,000 loaves of bread and a tonne of fruit from waste every year. Aldi’s UK buying chief Julie Ashfield calls it “a perfect example of how we can make a positive impact on the environment while still delivering great value and taste.”
For Toast Brewing cofounder Louisa Ziane, the message is even sharper: “By using Aldi’s surplus Tiger bread to prevent food waste, this is a big win for nature and Aldi’s carbon footprint.”
