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Innovative platforms spur a circular economy but uncover its challenges too

06 May 2021
EIT Food West
6 min reading time

One of the substantial challenges to make our food system more sustainable is tackling food loss and food waste. Innovative market platforms, like Get Wasted and Circado, solve this problem by making sure food surpluses, residual flows and waste streams keep their market value. A step in the right direction, but one that also reveals the challenges that still need to be overcome.

From a circular perspective, the waste of one player is the raw material for another. As marketplaces, both platforms facilitate supply and demand by matching residual products with their ideal sales market. The overall goal is to upcycle food surpluses and side streams so they generate money rather than costing it.

Get Wasted, a platform built by EIT Food West and hospitality CRM platform Growzer in 2020, aims to make it possible for hospitality, industrial kitchens as well as social economy actors - like schools, hospitals and elderly homes - among others to buy surpluses from agriculture and wholesalers at favourable rates. Get Wasted allows organizing the chain so that social employment places can be included to transform these surpluses into soups and meals. Once processed, they can use the platform to put these products on the market. Furthermore, Get Wasted also focuses on the valorization of residual flows by offering them as raw materials to circular start-ups and food processing companies.

Circado, founded in 2018 by former Rising Food Star Rethink Resource, looks at the industry as a whole to find new applications for surpluses and side streams. Many industries, like cosmetics and construction, use food in their products, so founder Linda Grieder, “doesn’t perceive it as a challenge to open the platform up to all industries.”

Value assessment and pricing

This promising circular model receives a lot of interest from inside and outside the industry, but just like Get Wasted, it has to deal with a lot of challenges before it can become fully operational.

“Companies don’t always know that they can sell their waste streams, or what price to ask for it”, explains Linda Grieder, founder of Rethink Resource, “we help to change their perspective and see all streams as primary resources. This not only increases the value of the factory, but also makes re-use easier as waste streams are treated in a clean and safe way following official regulations.”

“Companies don’t always know that they can sell their waste streams, or what price to ask for it” - Linda Grieder, founder of Rethink Resource

Get Wasted faces the same need to raise awareness and explain the potential of connecting leftover foods and waste streams with new industries. “Wholesalers want to valorise their surpluses and waste streams to reduce waste and save money, but are still figuring out the cost versus benefit and efficiency ratio”, states Frank De Meulder, Managing Director of Growzer.”

To be able to use food surpluses or waste streams, companies might have to make some investments in order to keep leftovers fresh and cooled until they are sold. That’s a very different approach from collecting waste in bags and pay for processing it into biofuel. But it’s an investment that will pay itself back when waste streams keep their value through preservation.

(Un)expected volume supply

On the demand side, different concerns are at stake, experiences Frank De Meulder during exploratory talks with potential future users. “Hospitality and social actors among others are interested parties but they are worried the supply will fluctuate too much”, he explains.

To resolve this issue, Get Wasted will be a very dynamic platform that can both process and push static and ad hoc volumes. To connect demand and supply, users will be able to indicate what kind of surpluses they are looking for or offering. Once these are offered on the platform, they will be notified.

"it is a lot about talking to people and opening their eyes to this new opportunity in front of them.” Frank De Meulder , Managing Director of Growzer

Through pilot projects, Get Wasted is collecting more knowledge on specific volumes to set up recurring chains between supply and demand. “We are currently preparing the first pilot between two different wholesalers to get a better understanding of volumes”, Frank De Meulder, states. “In a next pilot, we will involve schools and elderly homes and make sure we have enough supplying partners to match their needs.”

Both Circado and Get Wasted experience that getting these exchanges operational is the most expensive phase of launching the platform. “This phase is as much about collecting data as it is about talking to people and opening their eyes to this new opportunity in front of them”, Frank De Meulder continues.

Logistics: complicated aspect in an open circular model

The perception of market value and coordination of volumes are unfortunately not the only complications of setting up a circular platform. The main difficulty is, in fact, organizing logistics. “The side streams we work with are complicated cases. They are difficult to treat or have a complex lifetime or stability. Furthermore, the quantity they come is in usually either too big or very small which makes organizing logistics a complicated puzzle”, summarises Linda Grieder. The challenge for Get Wasted is similar, as they both supply the same type of product.

The challenges are related to distance and to volume. “Depending on the volume of the waste stream, they may or may not be worth enough to transport once you factor in the price of transportation”, continues Linda Grieder. Circado solved this problem by adding a kilometer radius to the platform. Companies can then make sure they only offer and buy products at a competitive price. This comes down to selling cheaper goods only to buyers close to the supplier.

"The quantity waste streams come is in usually either too big or very small which makes organizing logistics a complicated puzzle." - Linda Grieder, founder Rethink Resource

A second challenge is to connect big volumes with small demand, or the opposite. “It’s a matter of pooling and scattering side streams to connect supply and demand”, Grieder states. “For example, a cosmetic brand needs only a small batch of pomegranate for its products, while a pomegranate supplier wants to get rid of all his surpluses at once. To solve this issue within the platform, Circado is testing the feature how they can allow various parties to self-organize their logistics and incorporate it into existing models.

Get Wasted is exploring the potential of reverse logistics and passive cooling. “Reverse logistics is promising for local partners that have a recurring collaboration”, explains Frank De Meulder. “They can basically save space in their existing logistics network to include space for surpluses and waste streams.”

A second option is the creation of centralized hubs where leftovers can be collected. “Working with a hub solves the issue of volume as you can reorganize and redistribute it in the hub”, Frank De Meulder continues. “As decentralized food hubs are not existing yet, we consider working with passive cooling as this guarantees the conservation of the cold chain, without the need to build a special warehouse.”

The potential for circular platforms and the repurposing of food waste as a primary resource is as promising as it is necessary. But the struggles these platforms need to overcome clearly show the adaptions that still need to be made on various levels before these circular solutions can become part of everyday reality.  

 

Learn more about creating value from food waste in this podcast episode with RethinkResource:

 

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