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Trends Point To Food and Ag Waste As Revenue, Not Cost

Trends Point To Food and Ag Waste As Revenue, Not Cost

New report finds food and agriculture companies are finding new ways to handle and generate revenue from waste

A new Rabobank report looking at waste valorization in the food, agriculture and agribusiness industry examines how F&A companies are increasingly focusing on ways to generate value from waste. 

Paul Bosch and Justin Sherrard, Rabobank analysts who authored the report, say organic wastes generated in the food and agriculture sectors were once seen as a problem, but leading companies are successfully shifting these wastes from the cost to the revenue side of the ledger. 

New report finds food and agriculture companies are finding new ways to handle and generate revenue from waste

"Food, agriculture and agribusiness companies should be thinking about waste – and many are – but while they once aimed to minimize waste and its associated costs, there are now examples in all sectors and all parts of the supply chain of waste being utilized to access new markets for energy and materials, and to generate higher returns in the process," the authors say.

"While there are different business models and success criteria that apply, we believe that more F&A companies will follow because the drivers behind this shift are too important to ignore.  Leader and early adopters are most likely to get the best returns," they add.

In the report, titled "Don't Waste a Drop!", the bank's Food & Agribusiness Research and Advisory group looks at factors behind the F&A industry's changing view on waste, and examines how some notable companies are investing in waste valorization. 

Factors driving this renewed focus on F&A waste: 

• Rising agricultural commodity costs

• Resource scarcity concerns

• Customer and consumer expectations around sustainability

• Companies' own sustainability goals

• Growing regulatory pressures around waste disposal


• Technological developments that create new markets for fuel, feed and fiber

Factors Shaping the New Waste Paradigm

Rabobank's report says that where F&A waste was viewed as a cost under the old paradigm, the new paradigm views F&A waste as a potential revenue source.  Factors driving this shift are:

• "Push" factors such as resource scarcity and regulation

• "Pull" factors like consumer expectations and incentives such as new revenue streams

• Enabling factors that include technology improvements and scale

Various Waste Valorization Pathways

Rabobank says that while these changes are driving F&A companies to recognize the benefit in placing more value on their waste, many are struggling to decide on which valorization pathways to follow.  The report compares and contrasts various pathways to waste valorization, including:

• Discharge – using external parties to treat/clean waste

• Waste reduction – improving process management and efficiency

• Composting – using waste as organic fertilizer

• Feed – livestock farmers using protein-rich waste to enrich animal feed

• Onsite energy generation – either combustion or anaerobic digestion, with a higher value than discharged waste that gets incinerated by third parties

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