Rabobank Report: Maximizing the Value of Food and Agriculture Waste Streams

Paradigm Shift - Once Seen as Cost, Waste Now Viewed as Revenue

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Oct 09, 2012, 10:00 ET

NEW YORK, Oct. 9, 2012 /PRNewswire/ -- Rabobank has published a new report looking at waste valorization in the food, agriculture and agribusiness (F&A) industry, notably how F&A companies are increasingly focusing on ways to generate value from waste. Rabobank says this trend represents a paradigm shift in the view of F&A waste, transitioning from a view of organic waste as a cost to a view of waste as a potential revenue source.

In the report, titled "Don't Waste a Drop!", the bank's Food & Agribusiness Research and Advisory group looks at factors behind the F&A industry's changing view on waste, and examines how some notable companies are investing in waste valorization.

Rabobank identifies several factors driving this renewed focus on F&A waste:

Rising agricultural commodity costs
Resource scarcity concerns
Customer and consumer expectations around sustainability
Companies' own sustainability goals
Growing regulatory pressures around waste disposal
Technological developments that create new markets for fuel, feed and fiber

Factors Shaping the New Waste Paradigm

Rabobank's report says that where F&A waste was viewed as a cost under the old paradigm, the new paradigm views F&A waste as a potential revenue source. Factors driving this shift are:

"Push" factors such as resource scarcity and regulation
"Pull" factors like consumer expectations and incentives such as new revenue streams
Enabling factors that include technology improvements and scale

Various Waste Valorization Pathways

Rabobank says that while these changes are driving F&A companies to recognize the benefit in placing more value on their waste, many are struggling to decide on which valorization pathways to follow. The report compares and contrasts various pathways to waste valorization, including:

Discharge – using external parties to treat/clean waste
Waste reduction – improving process management and efficiency
Composting – using waste as organic fertilizer
Feed – livestock farmers using protein-rich waste to enrich animal feed
Onsite energy generation – either combustion or anaerobic digestion, with a higher value than discharged waste that gets incinerated by 3^rd parties

Paul Bosch and Justin Sherrard, Rabobank analysts who authored the report, say, "Organic wastes generated in the food and agriculture (F&A) sectors were once seen as a problem, but leading companies are successfully shifting these wastes from the cost to the revenue side of the ledger. Food, agriculture and agribusiness companies should be thinking about waste – and many are – but while they once aimed to minimize waste and its associated costs, there are now examples in all sectors and all parts of the supply chain of waste being utilized to access new markets for energy and materials, and to generate higher returns in the process. While there are different business models and success criteria that apply, we believe that more F&A companies will follow because the drivers behind this shift are too important to ignore. Leader and early adopters are most likely to get the best returns."

A copy of the Rabobank report on how the food, agriculture and agribusiness industry is beginning to maximize the value of F&A waste streams is available to media upon request.

Rabobank Group is a global financial services leader providing wholesale and retail banking, asset management, leasing, real estate services, and renewable energy project financing. Founded over a century ago, Rabobank is one of the largest banks in the world, with nearly $1 trillion in assets and operations in more than 40 countries, and is among the highest rated private banks by S&P and Moody's. Internationally Rabobank focuses on food and agriculture and in North America it is a premier bank to the food, beverage and agribusiness industry. Rabobank's Food & Agribusiness Research and Advisory team is comprised of more than 80 analysts around the world who provide expert analysis, insight and counsel to Rabobank clients about trends, issues and developments in all major sectors of agriculture. www.Rabobank.com

SOURCE Rabobank