Japan's Food Waste Fix: Uplifting Upcycling #2
Discover the pioneers shaping Japan's upcycled F&B market.
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What’s up Market Shakers? Upcycling, that’s what. Specifically, upcycling in Japan.
Last week we met the companies and startups who are defining the market for upcycled foods around the world. We found that grains and fruit and veg waste, which are produced in high volumes by F&B manufacturers, are the ingredients that innovators are upcycling mainly. But what about in Japan?
Upcycling is still on the up
Interestingly, Japan has been upcycling foods since way before it was “cool”. Commonly consumed Japanese foods such as motsu, or organs, and sake kasu, leftover sake lees, have been making use of byproducts for hundreds of years. The development of these foods and others is driven by a desire to avoid waste and make the most from food, an established philosophy in Japanese culture.
On the flip side, the modern-day upcycling movement is still in its early stages in Japan. Most consumers are not aware of upcycling when it comes to food, so traditional waste-saving recipes and cooking practices would not be associated with upcycling by most Japanese.
Despite this, the government and companies are getting a head start on developing the market for upcycled foods in Japan.
Government activities support upcycling in Japan
The Japanese government enacted a bill in 2019 aimed at reducing food waste among businesses and consumers alike. The policy is important as it shows government commitment and openness to initiatives aimed at efficient food use. As is often the case in Japan, this policy is already spurring efforts from companies across Japan, especially big businesses, to invest in innovations like upcycling to reduce food waste.
Local governments in Japan are also required to do their bit to achieve 50 % food-waste reduction by 2030. Initiatives to date include helping residents connect with food banks like Saitama prefecture is doing, and upcycling projects like Chiba Prefecture’s “Upcycling Lab”, a collaboration between local bakers and brewers to use wasted bread to make beer.
Kamikatsu, home to Rise & Win, a brewery that upcycles yuzu peel to make craft beer, has gone all-in and branded itself as a Zero waste town. They recycle over 80% of waste, including old kimonos and fabrics into bags and sandals, and even gave local residents composters to turn their food waste into fertilizer.
With no shortage of grassroots activities to reduce and upcycle waste, Japanese consumers will gradually become more aware of upcycled foods.
COVID-19 made consumers more aware of food waste
The COVID-19 pandemic, which resulted in vast amounts of food going unsold when lockdowns forced restaurants and businesses to close, served to increase awareness amongst consumers about food loss.
This is reflected in the increased use of services that allow consumers to purchase foods that are nearing their expiry date, such as Kurahashi, which saw sales increase 2.5 times during the pandemic.
Upcycling is still not a point of consideration for most consumers wanting to reduce food waste, however. Less than 13% of consumers are aware of the concept according to recent survey data. So, what’s the story when it comes to companies?
Prevention prioritized over upcycling so far
So far, big and small players alike have mostly concentrated efforts on reducing food loss, more so than using waste to create new value-added products. For example, in 2021, Starbucks Japan began reducing the price of food items leftover at the end of the day by 20% to save them from the dustbin.
In the same vein, a growing number of innovative startups in Japan are developing solutions for food sharing. TABETE, one such service operated by CoCooking, connects customers with restaurants that have leftover food that they want to sell at discount. In 2021 they raised over 150 million JPY in pre-series A funding.
So, with Japan’s clear appetite for reducing waste, why has upcycling been slow to take off? One reason is that processing and preparing upcycled ingredients takes time and careful planning. Companies that successfully implement upcycling into their production processes, however, reap rewards in terms of reduced costs and also gains from value-added products. As we saw last week from the example of AB InBev and Take Two Foods, large players in Japan could partner with startups that specifically focus on upcycling as a strategy to help reduce high volumes of food waste.
With that said, let’s drive into the current upcycled food and beverage market in Japan and meet the players who are defining it.
Japan’s Upcycling Innovators
When it comes to companies who are upcycling food waste to create brand new products, Japan is not yet at the same level as Europe or the US for example. There are certainly fewer F&B companies that focus entirely on upcycling. That being said, there are several emerging innovators who are helping the upcycling movement in Japan gain ground. Let’s meet them!
Founded in 2021, Japanese startup Aranea has developed a fungus-based fermentation technology that companies can use to upcycle byproducts into value-added ingredients. Aranea was selected for ImpaTech Japan’s Social Change Maker’s program, and won the final pitch, giving them access to funding and development opportunities. In the coming weeks, we have an exclusive interview with Alexander Feller, CEO of Aranea, to talk about how he’s growing the business in Japan.
In 2021, Asahi launched a range of beers brewed with food waste from the Kurumae neighbourhood where their headquarters is located in Tokyo. Kurumae White is a weizen beer brewed using waste bread from local sandwich stores, and Kurumae Black is a stout made with spent coffee grounds. The beers were only sold in Tokyo as a pilot for future upcycled products.
DEAN & DELUCA Japan
In 2021, Dean and Deluca Japan launched a lineup of canned upcycled seafood products made with recipes designed by famous Japanese chefs such as Chihiro Naito of An Di. The products were launched in 2021 to make use of fish that could not be sold as a result of supply chain and demand challenges caused by the COVID-19 pandemic.
Ethical Spirits created award-winning gins from sake lees, a by-product of sake brewing process. In 2021 Ethical Spirits raised ¥140 million JPY to build a second distillery outside of Tokyo to help them expand their product lineup. Ethical Spirits aim to capitalize on the abundance of sake lees available from sake production in Japan to produce quality products that capture a piece of the global gin market, expected to be worth over $20 billion by 2028.
In 2021, GOVIA Japan launched Atelier De Godiva, a store that specialized in chocolate products made with whole fruit cacao, across major cities in Japan. The whole fruit cacao is produced by Barry Callebaut, and utilizes parts of the cacao fruit that would ordinarily be thrown away during the production process.
Oisix ra Daichi
Oisix (2000) operates a mail-order delivery service for organic and sustainable food products. Within their offerings are several products made with upcycled ingredients such as fruit jams and vegetable chips.
In addition, Oisix ra Daichi founded a venture fund, Future Food Fund in 2019 to address the lack of investment for food tech startups in Japan. The company’s portfolio includes some of Japan’s biggest food tech startups including Base Bread and snaq.me, as well as overseas companies, including spent grain, upcycle, Re-Grained.
This 150-year-old senbei manufacturer added a greener choice to their product line in 2021 when they launched a cracker flavoured with shrimp heads which are a sidestream from their ordinary cracker making process.
Loss Zero is a Japanese venture company that connects companies with produce nearing expiry with companies and people who can use the food. In 2021 they developed their own chocolate bar Re:You, that uses leftover chocolate from valentines day to produce a new upcycled chocolate bar.
Rise & Win Brewing
Rise & Win is a Japanese brewer of craft beer made with upcycled yuzu citrus peel. The company operates several taprooms across Japan, in addition to selling its beer online.
Snaq.me is a healthy snack box subscription service that crafts custom boxes of snacks made from all-natural ingredients for their customers. They regularly develop products, such as granola bars and tomato juice, for their snack boxes that utilize waste products from across Japan.
Yamaguchi Fermentation Store
This company, which specialized in fermented food products, released an upcycled sesame seed bran powder earlier this year. The product utilizes sesame seeds that would have been discarded during sesame oil production.
Unlock your exclusive report
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That’s all folks
There you have the low-down on the upcycling superheroes who are building a market for upcycled food and beverage in Japan.
There’s plenty left over to say, however, so stay tuned for next week when we’ll hear what real Japanese consumers have to say about upcycled food and beverages.
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