Don’t ‘waste’ potential: Turning biowaste into a strategic resource in the food & beverage sector

Despite generating large volumes of biowaste and high-strength wastewater, many food and beverage (F&B) companies still treat these streams purely as a cost. This leaves significant energy, carbon, and economic value untapped.

Driven by a favourable policy environment around circularity and bioenergy, rising and volatile energy costs, and mounting pressure to reduce dependence on natural gas, F&B companies are rethinking how they manage their biowaste. Besides upcycling opportunities (e.g., nutrient extraction), they are increasingly exploring options for local green energy production to strengthen their energy resilience and improve their carbon performance.

Through anaerobic digestion (AD), biowaste can be transformed into biogas and then eventually upgraded to biomethane – a renewable gas that can directly replace natural gas. The process also generates digestate that can be returned to the soil as fertilizer, and biogenic CO₂ that can even be reused in carbonated beverage production. Other solutions, such as biomass boilers or pyrolysis units have also been proven to be effective for biowaste valorisation through supplying industrial facilities with cost-competitive low-carbon heat.

The opportunities for biowaste are clear; however, the complexity of unlocking its value remains a barrier. Developing and operating anaerobic digestion plants demands technical expertise, investment capacity, and tailoring a business case to the specific local context.

The question many executives are now asking is: What are the options to maximise the business value of biowaste across our sites and supply chain, and how do we make these projects happen in practice? How can we get extra value by taking an active role in the project development rather than having a simple “energy buyer mindset”?

A recipe for effective biowaste strategies

Companies that successfully capture the full value of their biowaste typically follow an intentional, structured approach to uncover its true potential – potential that often remains untapped due to resource constraints or the prioritisation of day-to-day operational activities. A typical framework for a company adopting biowaste as a strategic resource is as follows:

1. Map and characterise waste streams: A recommended first step is to develop a clear and comprehensive mapping of the waste streams across the footprint associated with a characterisation of each stream. This includes available quantity, physical characteristics (calorific value, biomethane potential, NPK content, risks of pathogen contamination, etc.) and the impact of seasonality on quantity and quality.
2. Assess the valorisation pathways: This initial mapping can be complemented by a scoping analysis to identify and evaluate alternative feedstock valorisation pathways (e.g. beyond animal feed).
3. Select the optimal business model: These options should be assessed through a multi-criteria evaluation encompassing technical feasibility, economic competitiveness, operational complexity, regulatory alignment, carbon abatement potential, implementation timeline and any other relevant factors.
4. Explore collaborative or ‘as a service’ partnerships: Companies in the sector are increasingly adopting a more collaborative approach. Instead of developing projects entirely in-house, they are exploring “as a service” partnerships with specialised developers who bring technical expertise, assume operational risks, and may invest directly in anaerobic digestion plants or in biomass boilers. In these risk-sharing models, the F&B company typically provides derisked access to feedstock and sometimes land, while securing lower-cost biomethane through long-term purchase agreements.
5. Scale via hubs and supply chain integration: To further improve project economics and business case, some F&B companies are exploring hub models that pool feedstock from neighbouring sites and local agricultural producers, achieving greater scale and lower production costs. Others are also considering insetting schemes, making the produced biomethane available to key suppliers, such as packaging manufacturers, to reduce Scope 3 emissions and strengthen supply chain relationships. The benefits of such projects often extend beyond energy substitution. For example, circular models that return digestate to local farms help close nutrient loops, reinforce local supply chains, and build stronger community ties.

From concept to reality: A site‑level success story

At a UK site, one multinational F&B company had been selling its biowaste to a local power utility for years, with limited strategic benefit.

While the use of biowaste to replace natural gas for on-site heat production had been under consideration for over a decade, progress was hindered by difficulties in defining a compelling business case and aligning different teams on the right technical solution.

With an impending 2030 decarbonisation target for the site, the company decided to reassess the potential of its biowaste. A structured assessment of different investment options, involving both corporate and site teams, demonstrated a compelling business case for an on-site/near-site anaerobic digestion facility combining its own biowaste with other local feedstocks. The anaerobic digestion would not only produce enough biomethane to fully replace natural gas for the site’s operations, but would also allow it to inject surplus biomethane into the grid and offset the carbon footprint of the gas consumed by other company locations.

A decisive factor to make progress on the project was to shift toward an energy-as-a-service model, an innovative contracting approach that the company had discarded in the past, as it was not in line with historical ways of working. The company engaged multiple service providers to explore the most suitable contracting conditions, aiming to partner with a developer that could reduce the project's CAPEX intensity and operational risks.

Finally, the company also saw the project as an opportunity to strengthen the relationship with the local ecosystem: the digestate would be returned to local farmers supplying the raw ingredients of their production process, and new local partnerships are explored to process additional biowaste in the digestor, enhancing the circularity of resources in the community.

By implementing this biowaste strategy, the company will be able to strongly increase resilience to gas price fluctuations, reduce around 8kton of carbon emissions and be well on track to achieve its 2030 decarbonisation target.

Moreover, active co‑development enabled the company to improve project economics (e.g. through feedstock and land valorisation) and to access a BPA at a lower price than a typical transactional market‑based sourcing. Taking an active development role, rather than having a pure buyer mindset, can certainly bring financial advantages in a biomethane market that remains illiquid.

The opportunity is too valuable to waste

As energy cost volatility rises and decarbonisation pressures intensify, biowaste is emerging as a strategic resource that forward‑thinking F&B companies can no longer afford to overlook. Those that move early to valorise their waste streams will strengthen energy resilience, reduce emissions, and unlock new forms of circular value across their operations and supply chains.