8 steps for food companies towards a more sustainable future through a circular economy

circular economy

Over the last 30 years, factors such as global population growth, shifting demographics, and continual change in consumer demands have fundamentally transformed the food industry. Sadly, with the degrading impact on natural resources and the climate. As the worlds largest industry, food is currently creating an imbalance by taking up more resources than it’s creating. In order to transform this system into a more sustainable and modern approach, the way how food is grown and produced needs to change, However, this system by itself is incredibly complex and also interlinked with other industries such as health, production, energy, and climate. The required resources to sustain the food industry are vast: 50% of the planet’s habitable land and 70% of freshwater demand is taken up by agriculture.

This is where the principle of the circular economy comes into play, where all resources must be used and managed effectively and waste production is kept to a minimum.

How can the principle of a circular economy help the food industry to become more sustainable?

1. Design & market new products

A circular economy is relying on industries being proactive and regenerative in structure while carrying out system-wide innovations. Essentially, for the food industry, it should aim to redefine products and services in a way that focuses on reducing waste and minimizes the negative impact on the environment. Radical innovation will play an important role in building entirely different designs, from process to materials, such as artificial protein and 3D food printing. These R&D projects are already taking place across the globe, indicating the food industry is shifting its design to effectively use, re-use and recycle its resources.

2. Change production to fit a sustainable model

Food production is a cross-sector activity. Businesses need to collaborate and coordinate across all different sectors to reduce waste, greenhouse effects, and fossil fuel use. The current production model that is being used to produce and distribute most of our food is not using current resources effectively and consequently creates a number of problems like waste. The industrialization of food has increased worldwide food production, but this came at a price.  The food industry should embrace circular characteristics such as establishing shorter supply chains between the farmers and retailers or even consumers. This is to reduce waste associated with transport and increase local urban resilience in food production.

3. Profit from smart distribution

The global food distribution network is huge, with established long value chains of stakeholders. Food distributors can offer products that could be simply re-used, -cycled, but with a shorter shelf-life. By separating supply chain distributions into two streams, agricultural and urban, the distribution circle can be shortened to maximize efficiency.

4. Consumer choice impacting circular economy

By making more conscious food choices, the consumer can help steer towards a circular economy. Through a change in consumer behaviour, consumers can have a strong impact on the food industry. Consumers are already starting to impact and create a new supply-demand model that shifts to a more food-conscious one. This can also lead to the acceptance of new food production technologies that are more environmentally friendly.

5. Availability of re-usable products

Food producers are responsible to create a model that enables for optimally re-usability of their products or excess products as a result of the production process. Processes such as packaging can be adjusted to allow either a limitation of excess waste or material used or alternatively, the re-usability of the packaging can be considered and optimized.

6. Recycling agricultural and food waste

Recycling is another important driver for the circular economy. A well-established, cost-efficient recycling process turns all waste materials into reusable goods. For example, starch can be produced from wastewater, orange peels can be used for brewers, stale bread for fermentation, and also glass, cardboard and PET recycling are just a few of the possibilities within the immense potential of recycling in the food industry and the impact on the environment.

7. Preventing food losses with actionable results

Waste prevention is valued more highly than using energy from waste. There are a lot of initiatives being done in essence, none of them contribute to the fight against waste but these seldom just treat the symptoms without actionable results. There is a serious need for mapping the results of food waste and to create actionable plans on how to prevent these from happening, in the long term. Clearer insights in for example quality management and food tracing & tracking can effectively prevent food wastage and help environmentally friendly options.

8. Raise more awareness towards a circular economy

By 2050, the Dutch government is planning to switch to a fully circular economy. In order to achieve this, several ministries will need to cooperate. With the food industry covering multiple supply chains, the awareness of this new economical method will impact stakeholders at all levels. The situation of the planet’s environment makes an incredibly strong case for change and to realize this vision at full scale. It is very likely similar initiatives will be set in motion across different national governments, forcing the local food businesses to adapt as well.

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Resource Credit | Foodware 365 

The ingredients for a circular economy in the food industry

The circular economy, the economic system of closed cycles, is becoming more and more popular, in the food industry as well. A great development, looking at the increasing world population, increasingly scarce materials, heightened price volatility and supply chain risks. No better time than the present to make use of the advantages of a circular economy. And we all need to contribute to this.

The circular economy versus the linear economy

First things first, what does a circular economy mean? Simply, the circular economy is an economic system that is meant to maximize the reusability of products and raw materials and minimize value destruction. A continuous flow of materials that keeps going round in a ‘circle’. This idea is directly opposite t the linear system that we’re used to: here products are destroyed at the end of their life cycle (thus, quickly losing their value). Well-known subjects in the food industry like recycling and sustainability are part of the circular economy, but the principal is much larger than that. Maintaining the value of resources (raw materials, water, energy) while paying attention to prevention, efficient use of the resources, environmental performance, sustainable procurement, and customer awareness.

The biological and technical cycle

The circular system consists of two different cycles: the biological cycle and the technical cycle. In the biological cycle, residuals materials safely return to nature after use and in the technical cycle, product (components) is made in such a way that these can be reused at a high-quality level. And the food industry can contribute to this. Examples are the breeding of potatoes that have the right shape of crisps or chips in order to prevent unnecessary loss of the harvest during peeling/cutting, using rejected fruit and vegetables from manufacturers and farmers to produce juices or soups (for example, our customer De Verspillingsfabriek); using parts of the animal that aren’t sold as food for other purposes like animal feed and making biodiesel for renewable energy. Mainly large food multinationals like PepsiCo, Nestle, and Mars are already working hard on a circular economy.

The 7 key elements of the circular economy

Does your food company want to get started with this, but you’re unsure about where to start? Because the term “circular economy” is used in so many different ways, Circle Economy has defined seven key elements that apply to every industry. These elements are a good guide to start with:

  1. Prioritize regenerative resources
  2. Preserve and extend what’s already made
  3. Use waste as a resource
  4. Rethink the business model
  5. Design for the future
  6. Incorporate digital technology
  7. Collaborate to create joint value

Producing more efficiently with technology

Technology can help you produce more efficiently. For example, through the purchasing of products, inventory management, quality control, and tracking and tracing. In addition to all of this functionality, in Foodware 365 you can also have the option to set up one or more co-and/or by-products in your software system. Co-and/or by-products are, for example, cutting waste, residual dough that is reused with bread and pastry, or registering other sizes that come out of production in addition to the standard sizes of products. This can be directly registered in Foodware 365 and used again in a later production process. A good example of a circular economy with the help of technology.

Is your food company working on a more sustainable future? allonline365 can help guide your company into the future. You can contact us on  info@allonline365.com or call  +27 (21) 205 3650.

www.allonline365.com

Resource Credit | Fodware 365

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