Across the agrifood industry, millions of tons of byproducts—like brewer’s spent grain and potato steam peels—are underutilized annually, representing a significant missed opportunity to cut waste and increase profits. By embracing side stream valorization, companies can transform these byproducts into valuable ingredients, bio-based materials. In Bright Green Partners’ recent webinar, pioneering ventures Hyfé, Revyve, and Duynie shared practical insights on extracting high-value compounds, addressing logistics challenges, and navigating regulations. Their experiences illustrate how innovation, strategic partnerships, and continuous improvement can help agrifood businesses succeed in the rapidly evolving side stream market. Read on to discover how to unlock this potential.

The hidden potential in agrifood side streams

The agrifood industry plays a crucial role in feeding the world but comes with a significant environmental footprint. 25% of global greenhouse gas (GHG) emissions, 70% of freshwater consumption, and 50% of habitable land use can be attributed to food production. Despite these resource demands, millions of tons of valuable side streams remain underutilized each year.

In Europe and North America alone, approximately 150 million tons of food processing side streams go unused annually. These include materials like beet pulp, potato steam peels, brewer’s spent grain (BSG), brewer’s spent yeast (BSY), canola press cake, and liquid wheat starch. While these streams often retain significant nutritional and functional properties, many are still downgraded to low-value applications such as animal feed or bioenergy—if not discarded entirely.

What is side stream valorization?

Side stream valorization refers to the process of transforming food processing byproducts into higher-value applications, particularly for food, feed, personal care, and industrial uses. This approach aligns with Moerman’s Ladder, a framework that prioritizes keeping food resources in the human consumption cycle for as long as possible before resorting to lower-value applications like feed, composting, or energy production.

Several food ingredients that are now widely accepted started as side streams. Whey protein, which was once considered a waste product of cheese-making, has become a billion-dollar global industry. Similarly, potato protein, previously used mainly in animal feed, is now recognized for its functionality in plant-based foods, particularly as a key ingredient in cheese alternatives.

Evolution of whey and potato protein side-stream valorization

By taking a more strategic approach to food production waste, companies can improve their bottom line while significantly reducing environmental impact.

Key market drivers making side stream valorization more relevant

Several market forces are converging to make side stream valorization a growing priority for food and ingredient companies:

1. Sustainability & Corporate Responsibility: Regulatory frameworks like CSRD (Corporate Sustainability Reporting Directive) are increasing transparency requirements for companies, pushing them to demonstrate lower carbon footprints and responsible supply chain management.
2. Technology Advancements: Biorefinery processes, filtration innovations, and precision fermentation are enabling more efficient extraction and purification of high-value ingredients from side streams.
3. Shifting Supply & Demand: A decline in livestock production in Europe is reducing the need for feed-based side streams, opening the door for human food applications.
4. Rising Demand for Functional Ingredients: Consumer demand for plant proteins, prebiotic fibers, and specialty oils is increasing. Many of these nutrient-dense ingredients are naturally present in food side streams.
5. Economic Pressures & Cost Efficiency: With rising capital costs and inflation, food companies are increasingly looking for near-term solutions to maximize profitability. Side stream valorization presents a cost-effective way to generate additional revenue without requiring new primary production.

Opportunities for side stream valorization

While the concept applies broadly, four high-potential categories stand out in the current market:

• Oilseed Proteins: Canola and sunflower proteins are attracting investments as functional, plant-based alternatives.
• Fermentation Inputs: Side streams rich in starches and sugars are valuable feedstocks for biomanufacturing, precision fermentation, and enzyme production.
• Prebiotic Fibers: Extracted from plant-based side streams, these fibers support gut health and are in high demand in the functional food and beverage industry.
• Fruit & Vegetable Byproducts: Rich in polyphenols, antioxidants, and specialty oils, these side streams can be repurposed into nutraceuticals, cosmetics, and clean-label food ingredients.

Recent partnerships and investments in promising side-stream valorization fields

Challenges and considerations

Despite its advantages, side stream valorization comes with challenges that companies must address:

• Seasonality & Variability: Many side streams are tied to harvest cycles, making consistent supply difficult.
• Short Shelf Life & High Water Content: Some byproducts spoil quickly or require drying and stabilization to become viable ingredients.
• Logistics & Supply Chain Fragmentation: Side streams are often produced in dispersed locations, complicating collection and processing.

While these barriers exist, strategic investment in processing technologies, partnerships, and regulatory compliance can help businesses turn food waste into a high-margin, sustainable revenue stream.

Insights from industry pioneers

In the race to create more sustainable and efficient food systems, companies are finding new ways to turn food processing side streams into high-value ingredients. While the opportunity is significant, businesses pioneering in this space face real challenges—from market education to operational complexities.

At a recent webinar hosted by Bright Green Partners, three companies leading the way in side stream valorization—Hyfé, Revyve, and Duynie—shared their insights into the realities of this growing industry. Their experiences reveal what it takes to build a successful business in this space, the hurdles they’ve encountered, and the strategies they use to overcome them.

Hyfé: Building a bio-based economy from food waste

Hyfé upcycles food processing waste and farm-based food waste into a portfolio of specialty ingredients and bio-based chemicals, including polyphenols, dietary fibers, and glucose used in the bioeconomy.

Their challenge:
Hyfé initially set out to address the shortage of glucose for fermentation-based biomanufacturing. However, they quickly realized that working with wastewater streams was not the best solution. Instead, they pivoted towards using fruit and vegetable waste, which contains multiple high-value components.

The complexity of processing heterogeneous raw materials was an unexpected hurdle. Unlike single-input manufacturing, where a company processes one material in a predictable way, Hyfé needed to design a biorefinery that could efficiently extract multiple ingredients from highly variable food waste streams. This required advanced separation technologies and an adaptable processing infrastructure.

Key takeaways from Hyfé’s experience:

• Profitability at every stage is essential. Hyfé recognized that waiting until commercial scale to reach profitability wasn’t viable. Instead, they focused on extracting multiple valuable outputs from food waste, allowing them to be profitable even at smaller scales.
• Competing on price is crucial. Despite the sustainability benefits of side stream valorization, buyers rarely pay a green premium. To succeed, Hyfé had to price its products competitively against commodity ingredients while maintaining a strong business case.
• Carbon impact extends beyond food. By transforming food waste into bio-based chemicals, Hyfé is reducing reliance on petroleum-based materials. This approach aligns with the need for long-term resource sustainability, not just short-term emissions reductions.

Revyve: Upcycling yeast for the functional ingredient market

Revyve takes brewer’s spent yeast and baker’s yeast and converts them into functional ingredients, with a particular focus on egg white replacers. Their goal is to create high-value protein and fiber ingredients that can serve multiple applications across food and beverage.

Their challenge:
Revyve’s biggest hurdle was finding a product market fit as the first versions of Revyve’s yeast-derived powders failed to meet customer expectations. The company went through multiple product iterations over three years before achieving the right functional performance and customer acceptance.

Key takeaways from Revyve’s experience:

• Product development takes time. Revyve initially targeted the alt-meat industry, but as they refined their product, they discovered broader applications in bakery, sauces, and deep-fried snacks. Their market expanded beyond their initial expectations.
• Customers need convincing. The first pilot batches were not immediately successful. Through continuous improvement and feedback loops, Revyve eventually developed an ingredient that met the needs of their target customers.
• Scaling is capital-intensive. Moving from small-scale production to commercial viability required significant funding. Revyve’s next major goal is to transition from venture capital to debt financing, which will allow them to scale without diluting ownership.

Duynie: Scaling side stream valorization across industries

Duynie has been in the side stream valorization business for over 50 years, originally focusing on feed applications but now expanding into food, pet food, and industrial applications. They work with bulk byproducts like brewer’s spent grain, potato starch, and sugar industry side streams.

Their challenge:
As a company working with large-scale industrial byproducts, Duynie must deal with logistical and regulatory hurdles that come with transitioning materials from feed applications to human food. One of their biggest obstacles is supply chain integration. Moving from feed to food applications requires certification at every stage, including ensuring that suppliers handle materials according to food-grade standards. Many companies struggle with these transitions, which can slow down market adoption.

Key takeaways from Duynie’s experience:

• Side streams require infrastructure investment. Side streams often have high moisture content, making transportation and storage expensive. Duynie has developed drying and fractionation processes to improve shelf stability and logistics.
• Regulatory barriers slow down adoption. Companies looking to enter the food market from feed applications must meet stringent certification standards (e.g., food safety compliance). This process adds complexity and cost.
• Customer perception is a challenge. Many buyers still see side stream-derived ingredients as lower quality. Educating the market and demonstrating functionality is critical to securing premium applications in food and beverage.

The future of side stream valorization

The increasing adoption of side stream valorization signals a paradigm shift in food production—moving from a linear "produce-use-discard" system to a circular, waste-minimizing model. With more companies investing in biorefinery infrastructure and novel ingredient development, the next decade will likely see a significant increase in side stream-derived ingredients across food, personal care, and biomanufacturing industries.

For businesses looking to stay competitive while reducing costs and improving sustainability, now is the time to explore how side stream valorization can become a core part of their strategy.

Get access to the full webinar recording here.

Work with Bright Green Partners

Whether you need help understanding the business case of your byproduct, scouting of side stream valorization technologies or a due diligence on emerging waste-reduction technologies. We are your source for trusted AgriFood Tech expert insights & consulting, so can make informed decisions. Schedule a call with our Managing Partner, Floor Buitelaar, to discuss how we can support you with expert-driven insights