How 3 Businesses Are Transforming Food Waste into Profit

One-third of all food produced globally never gets eaten, whether it is lost along the supply chain or thrown away by households and businesses. Meanwhile, 1 in 10 people around the world don't get enough to eat.

It's a tragic irony with a devastating impact. People who could be fed are going hungry; food that could be saved is rotting in landfills releasing planet-warming emissions; and livelihoods and economies that could be thriving are taking financial losses to the tune of $1 trillion a year.

But what if food waste were seen as raw material?

Three startups working with WRI's Partnering for Green Growth and the Global Goals 2030 (P4G) - an initiative that helps early-stage climate businesses become investment ready - have built successful business models based on tackling food loss and waste. They are proving that it's possible to turn inedible or surplus food into profit while simultaneously creating local jobs, reducing hunger and avoiding harmful emissions.

With more political and financial backing, models like these could be scaled to help tackle food waste and food security challenges around the globe.

Chanzi Turns Food Waste into Sustainable Feed and Fertilizer

In 2019, Sune Mushendwa and Andrew Wallace joined forces to create Chanzi, a company that uses fly larvae to convert food waste into sustainable, affordable protein for animal feed and fertilizer.

It all starts with sourcing: Chanzi, which began in Tanzania and has since expanded, contracts with local waste management companies (such as Taka Taka Solutions in Kenya) and even started its own (Okota, in Tanzania) to ensure a steady, high-quality supply of organic waste. It also set up waste separation schemes in local markets to gather spoiled crops from vendors and smallholder farmers and sources waste from local companies, such as food processors and breweries.

People pick through large piles of produce at a market in Arusha, Tanzania. Chanzi has set up waste separation schemes at local markets to collect spoiled crops that would otherwise be destined for the landfill. Photo by robertharding/Alamy Stock Photo

The collected waste is then fed to black soldier fly larvae on Chanzi's insect farms, which are harvested and processed into high-protein, low-carbon animal feed that can be fed to poultry and other animals, including fish and pigs. The feed is both cheaper for farmers and more sustainable than traditional options like soymeal and fishmeal, which contribute to deforestation and overfishing.

The only byproduct of this process is insect manure, a fertilizer that Chanzi distributes to smallholder farmers at a price point 80% below synthetic fertilizer to help increase their crop yields.

A key factor in Chanzi's ability to scale is its production model, which relies on a mix of automated and labor intensive-activities that is specifically tailor-made for the African context - both allowing for profitability and creating new jobs for people who need them.

"We're a fairly labor-intensive business, especially when it comes to collecting and sorting the waste. And that's employing people from marginalized communities, people involved in waste collection and management, and waste pickers." -Andrew Wallace, Co-founder, Chanzi

To date, Chanzi has collected more than 10,000 tons of organic waste in Tanzania and Kenya, benefiting more than 6,000 farmers through fertilizer distribution and training. It has created about 800 jobs for local people through employment in its facilities and construction-related work, offering much-needed employment opportunities for youth and women. And Chanzi's work has prevented more than 250 metric tons of methane from being released into the atmosphere - equivalent to removing over 1,000 cars from the road for a year.

Chanzi's long term vision is to replicate its model across sub-Saharan Africa and help dozens of cities reach a point where they are sending zero organic waste to landfills.

EatCloud Helps Surplus Food Reach Those in Need

Donating unsold food from stores and restaurants to those in need is a powerful strategy to fight hunger and avoid waste; in the United States alone, restaurants produce more than 915,000 tons of food waste every year. But redistributing food effectively is a challenge. There are liability concerns from the food industry, existing food and tax policies that make donations challenging, and food banks have limited capacity to engage with restaurants and grocery stores.

Two people load donated food onto a truck for transport. Photo courtesy of EatCloud

EatCloud, a Colombian-origin startup led by Jorge Correa, offers a digital platform to make donating food easier at scale. To automate the redistribution process (for which retailers pay a monthly fee), EatCloud uses artificial intelligence to connect the entire food ecosystem - supermarkets, convenience stores, restaurants, hotels, catering services and even farmers - with food bank networks and community nonprofits. Surplus food, still in good condition but which cannot be sold, is announced through the EatCloud app to local food banks or social organizations that can collect and deliver it to vulnerable people.

Since its launch in 2020, customer data analyzed by EatCloud shows that the company has redistributed more than 40,000 tons of unsold food in Colombia and Mexico, equivalent to 92 million meals. Keeping this food out of landfills has avoided more than 85,000 tons of carbon emissions, equivalent to about 10,000 U.S. homes' energy emissions for a year. Customers in the food industry have saved more than $39 million through logistics savings and tax benefits.

Stacks of surplus food donated through EatCloud's platform, which connects retailers with food banks and other organizations working to fight hunger. Photo courtesy of EatCloud

The company is also collaborating closely on zero-hunger efforts with city and national government agencies in Colombia and Mexico. It acts as a connector between food donors and recipients and helps governments track the impact of their food security and surplus management programs.

This year, EatCloud won the International Award for Best Practices in Sustainable Development, promoted by UN-Habitat and Dubai, and is a finalist in the Seoul Smart Cities Prize for its Zero Hunger alliance with the city ​​of Medellin, Colombia. Looking ahead, the company is working to expand its operations to 10 countries and develop strategies to help local governments achieve their food security and waste reduction goals.

WasteX Uses Waste to Boost Farmers' Yields

Agricultural waste - byproducts like crop leaves and stalks and animal manure - can be a big challenge for farmers, leading to poor soil and water quality and increased carbon and methane emissions if left to break down. In countries around the world, many farmers burn agricultural waste leftover from the previous harvest to prepare their fields for the next planting season, which also worsens emissions and air quality.

WasteX helps farmers turn agricultural waste into biochar, a sustainable soil enhancer that can help reduce reliance on harmful chemical fertilizers. Photo courtesy of WasteX

Pawel Kuznicki, founder and CEO, launched WasteX in 2022 to help farmers in Southeast Asia convert their agricultural waste into higher-value products that also deliver a climate benefit. The company does this by offering farms and corn, rice and sawmills an end-to-end solution for turning waste into "biochar" - a charcoal-like substance that, when mixed with soil, can improve crop yields, increase soil water retention and improve fertilizer effectiveness. Biochar can replace a portion of the chemical fertilizers farmers traditionally use, which are highly carbon-intensive and can pollute waterways. It can also be added in small quantities to poultry feed to reduce pathogens and improve gut health.

Over a four-month product trial in Indonesia on 20 plots, WasteX found that adding biochar and reducing chemical fertilizer by 50% improved corn yields by as much as 95%, significantly increasing farmers' incomes. The company's proprietary technology also produces fewer emissions and is cheaper than similar technology from the U.S. or Europe.

"Lots of agricultural residue ends up being burned because farmers don't know they can create value out of their waste. We've found that farmers are keen to adopt new practices if they can see the benefits first-hand and appreciate someone supporting them with it." -Pawel Kuznicki, Founder & CEO, WasteX

WasteX operates facilities at partner locations and provides equipment and training directly to farmers, primarily in Indonesia. The company is intentionally working with local women's farmer groups, teaching them how to apply biochar to chili, tomato and other crops and improve their yields. From January to September of 2024, WasteX transformed 38 tons of waste into 14 tons of biochar, avoiding almost 20 tons of carbon emissions. By 2025, the company aspires to remove more than 1,000 tons of carbon emissions annually.

Women farmers in East Java, Indonesia apply biochar to crop rows. Photo courtesy of WasteX

WasteX has also been endorsed by Carbon Standards International, allowing its clients to generate carbon credits without going through the lengthy and costly certification process. WasteX can sell these carbon credits to international buyers and share the proceeds with farmers using its equipment.

To Succeed and Scale, Food Loss and Waste Solutions Need More Funding

These businesses are making a real impact: reducing food waste, cutting emissions, tackling hunger and supporting livelihoods around the world. In all three cases, significant financial support was critical to their success and scale-up: the three companies have received more than $7 million in commercial investments and grants combined, signaling a growing confidence in their business models.

But food waste solutions have not received the same level of buy-in on a broader scale. It would take around $48-$50 billion per year to address food loss and waste globally; today, relevant solutions receive only about $0.1 billion a year in climate-related finance. This is less than 1% of tracked investment in agriculture and food systems writ large, which are already severely underfunded.

Startups in low- and middle-income countries often face a host of challenges attracting the investment needed to launch and grow their businesses and make an impact. They may lack the expertise needed to prove and document their business's viability for investors, the funds to invest in impact monitoring and measurement, or knowledge about the local policy or regulatory environment. There is also a lack of access to good quality finance that is structured for startups working in low and middle-income countries.

WRI's P4G initiative helps address some of these challenges by providing grant funding and technical assistance to early-stage climate startups to help them become investment ready. Through this work, P4G has found that investing in businesses which tangibly improve lives and the environment can create a virtuous cycle: By supporting social, climate and environmental goals, businesses can garner political backing from local and national governments. This in turn allows them to contribute to policy interventions that improve the market environment - not just for themselves, but also for others in the sector. This increases the competitiveness of the entire sector while reducing perceived risks for investors and enabling finance for more startups.

Unlocking a Zero Food Loss and Waste Future

Chanzi, EatCloud and WasteX are proof that food loss and waste reduction can be a viable, scalable business - and that food systems solutions are especially effective when they are rooted in the local context and can show tangible benefits to residents.

With the right policy environments and investors willing to broaden their risk appetite and portfolios, these kinds of solutions can help propel the world into a more food secure future.

WRI's P4G initiative connects investors with pipelines of investable locally led climate startups. Early-stage businesses can apply to P4G's open call for partnerships to receive support.