Food waste

Sustainability Report: Combating Food Waste With Private Label Products

Retailers and suppliers are finding new ways to reuse food that would otherwise end up in landfills.
Zachary Russell
Associate Editor
Zachary Russell profile picture
Imperfect Foods

As retailers remain focused on sustainability, the topic of food waste is growing in the overall conversation, joining hot button topics including reducing carbon emissions, sustainable packaging and issues around how produce is grown and harvested.

According to numbers from Recycle Track Systems, about 30% of food in American grocery stores is thrown away, adding up to roughly 16 billion pounds of food waste every year. Food, including from grocery stores, restaurants and households, takes up more space in landfills than any other product.

At the intersection of curbing food waste and private label is Imperfect Foods. Founded in 2015, the online grocer works directly with farmers and producers to rescue and redistribute food, as well as develop private label goods across multiple grocery categories. Last September, Imperfect Foods was purchased by Misfits Market, another online grocer that recently launched its first private brand.

“Scale matters, especially in online grocery, so the increased scope of our combined organization and customer reach is a major benefit,” said Morgan Drummond, senior director of Private Label at Misfits Market. “As we integrate operationally, our purchasing power and customer reach will
grow, unlocking efficiencies in how we do business and how much more food we can rescue from lesser outcomes with a broader customer base.”

The process of diverting food waste, known as ‘upcycling’, has a large potential to change the game when it comes to sustainability. The Upcycled Food Association works with retailers, including Imperfect Foods and Misfits Market, and connects them with ingredient suppliers to create Upcycled Certified products. According to information from SPINS, a data organization focused on natural and organic products, the group’s certified products are gaining attention from consumers. Upcycled Certified product sales increased 21% year-over-year in 2022, outpacing other better-for-you and sustainable categories such as non-GMO, certified organic and plant-based.

Food waste

“While the majority of food waste happens in the home – nearly 40% – an additional 35% of food waste happens on the farm and during the manufacturing process,” said Angie Crone, CEO of the Upcycled Food Association. “This is where upcycling and the Upcycled Certified program can have an incredible impact as innovative businesses are learning to take imperfect produce or manufacturing byproducts that are nutritious and meet all the food safety standards, and upcycle them into creative, delicious foods for consumers. Examples include discarded cacao fruit, spent brewer’s grain, imperfect or slightly bruised produce that don’t meet rigorous retail specifications. The list goes on and on.”

Imperfect Foods’ and Misfits Market’s private label products include many canned goods and bagged snack items, showcasing how upcycled foods can be turned into unique products that consumers love.

Imperfect Foods
Imperfect Foods' seasonal private label products

“One of our most successful private label products is our Odds & Ends Organic Pumpkin Purée,” said Drummond. “Our supplier partner had an excess amount of purée from the recent harvest where the brix (sugar) content exceeded their specification for their own brand as well as other customers. While a bit sweeter than most canned pumpkin, it makes an even more delicious pie or pumpkin bread, and it is a fantastic value to our customers.”

Drummond added that she is also excited about the Imperfect Foods White Jasmine Rice, which will launch in the coming weeks. This U.S.-grown rice is sourced to rescue broken kernels, above the 4% tolerance typically allowed.

“Our ‘barely broken’ rice cooks the same as regular rice and has the same great taste we all love,” she said.

Drummond said that when it comes to creating new products, working closely with suppliers is paramount, as supply partners provide the raw ingredients that would otherwise be going to waste. According to the U.S. Department of Agriculture, the portion of the U.S. food supply that ends up being wasted is estimated at between 30% and 40%.

“As someone that focuses on product development across numerous categories, I can tell you that another challenge is just knowing where to start and what production streams result in various rescue opportunities,” said Drummond. “That drives me to lean on my supplier partners as subject matter experts – to educate me on where inefficiencies might exist – so I can act as a creative thought partner. Together, we find win-win solutions that expand our mission-driven assortment while providing another potential revenue stream to them.”

Kerry, a manufacturer of taste and nutrition ingredients for food and beverage products, is one supplier that has started to dabble in upcycling. The company’s powdered cheese offerings are made by repurposing cheese scraps in the production process, which avoids additional cheese production, saving further energy and emissions.

Kerry said that 10,000 kilograms (22,046.23 pounds) of its upcycled cheese powder helps avoid 11,856 kilograms (26,138 pounds) of cheese waste and 55,586 kilograms (122,546.15 pounds) of CO2e. This waste diversion is the equivalent to 312 wheels of parmesan cheese.

Kerry upcycled cheese
Some of Kerry's cheese offerings are produced through an upcycled process

“At Kerry, due to our novel sourcing model, scientific skill set and technical capabilities, we are uniquely positioned to upcycle this cheese into delicious, high-quality and shelf-stable cheese powders that deliver an authentic cheese taste,” said Carmel Collins, global portfolio director of Dairy Taste for Kerry in an announcement of the powdered cheese’s sustainability impact last November. “By doing this, we are maximizing the potential of the food source and the resource
it takes to manufacture the cheese in the first place, whilst simultaneously minimizing food waste.”

The company also recently announced its sponsorship of The Kerry Upcycled Food Foundation Fellowship in partnership with the association’s Upcycled Food Foundation nonprofit. The fellowship aims to educate consumers about the environmental and social benefits of upcycled foods.

Shortly after the acquisition of Imperfect Food, Misfits Market announced a food product development challenge with the Upcycled Food Association to continue its efforts of diverting food from landfills and into private label products. Food entrepreneurs sent the retailer products that repurpose excess food or waste, and finalists will pitch their creations to a panel of judges at the upcoming Natural Products Expo West convention in March.

While food waste will likely remain a problem for the foreseeable future, upcycling is beginning to play a major role in the future of sustainability, with plenty of opportunities emerging in the world of private label.

“In 2023 we are doubling down on building consumer awareness and demand for Upcycled Certified products,” said Crone. “New products are entering the space at a feverish pace. We are focused on ensuring the public is aware of Upcycled Certified, and how supporting businesses that produce these products can empower consumers to reduce food waste and enjoy nutritious, delicious products.”