Harnessing the power of nature to reduce food waste in the circular bio-economy
A circular bio-economy would reduce the amount of waste our economic model currently generates. We believe this presents one of the largest investment opportunities that makes up the Natural Capital theme. Losses due to food waste amount to over $1 trillion a year, according to the World Resources Institute, and this food waste also accounts for 6% of global emissions.
Using the circular bio-economy to cut food waste is good for the environment and good for profitability. This can be achieved by finding ways to reduce waste through the use of natural ingredients, for example. By using bio-based solutions to offer a sustainable solution to food preservation, companies are both preserving and harnessing nature.
Nearly a quarter of food waste – 24% – occurs in the food supply chain. We have identified a number of established, profitable innovative companies that have developed effective means of addressing these challenges.
One solution is the addition of bio-cultures, which provide a natural, anti-microbial function that reduces spoilage and boosts the shelf life of food. Market research shows 66% of consumers check labels before purchasing.
Dairy is the number one category where consumers check the expiry date and it is also one of the most wasteful areas of food. As much as 80% of wasted yoghurt is linked to the expiry date and 1.5 million tons of yoghurt is thrown away every year. Bioprotective cultures can add another 7 days to the shelf life of yoghurt and reduce wastage of yoghurt by 30%.
The Lombard Odier Natural Capital strategy has identified 150 companies creating solutions for the circular bio-economy, including nature-based solutions for the food industry.
Nature-based ingredients can present an effective approach to reducing food waste while supporting the environmental balance. This creates a strong foundation for a positive impact on the Natural Capital and the global economy.
The Circular Bio-economy is one of four key investment themes where we have identified long-term growth small and mid-cap global companies. The other three themes are the Outcome Orientated Economy; Resource efficiency; and Zero waste.
Source: LOIM analysis, Chr. Hansen Capital Markets Day 2016
Source: LOIM analysis, Chr. Hansen Impact study (2016)
losses a year are due
to food wastage
check expiry dates
tons of yoghurt
is wasted each year
of waste occurs in the food supply chain