Circular Economy in Food Supply Chains

, 10 minute read

Quick summary: Discover the transformative potential of circular economy practices in the food supply chains. Uncover how circularity can drive sustainability, reduce waste, and create a positive impact on the environment. Explore innovative solutions and real-world examples of circular economy implementation in the food industry.

In a world striving for sustainability, the circular economy emerges as a beacon of hope, transforming how we produce, consume and dispose of goods. Embracing a reduce, reuse and recycle ethos, circular economy breaks free from the linear take, make, waste model which has led to environmental degradation and resource depletion. As our global population continues to grow, so does the urgency to find sustainable solutions to feed the planet without depleting its precious resources.

A study published in the journal Nature Food reveals that implementing circular economy principles, such as regenerative agriculture and food waste reduction could reduce greenhouse gas emissions from the food sector by up to 70%

In this blog post, we embark on a journey through the circular economy’s impact on food industry, discovering how innovative practices and collaborative efforts are paving way for a more resilient, nourishing and environmentally-conscious future. Join us as we explore the possibilities that lie at the heart of circular economy’s role in shaping the future of food.

Why Linear Food systems need to disrupt? 

The world loses one-third of the food produced for human use. This equates to roughly 1.3 billion tonnes each year, or US$1 trillion. In terms of the effect caused to the environment, the total food waste amounts rank as 3rd largest producer of carbon dioxide. Around 40% of such losses occur post-harvest and in processing.  Today’s food system has an enormous social and environmental footprint starting from climate change to food waste, water availability to inequality and healthy living to biodiversity loss. USD 5.7 trillion costs are due to the linear nature of food production which utilizes finite resources, pollutes them and harms the natural systems. 

The agrifood industry is responsible for almost a quarter of GHG emissions that degrades the environment causing air, soil and water pollution. The diseases caused by this pollution along with consequences of pesticide use, overuse of fertilizers, reliance on antibiotics in animals, untreated human waste and increased antimicrobial resistance are threatening scenarios in food security. 

Circular economy offers a vision for  a fit future for all with a healthy food system. 

What is circular economy (CE)? 

“A circular economy is a closed-loop economic system that uses renewable energy sources, systems thinking, and minimizes the value loss of raw materials, components, and finished goods”. 

The present food and agriculture supply chain is affected with social, economic and environmental problems making it unsustainable. Circular economy offers tools to enhance and optimize production and consumption to achieve sustainability. 

In agriculture or circular economy for food, it is a system of regeneration that aims to minimize waste by making the most out of resources available. It aims to keep the supply chain in a closed loop of maximizing product life and reducing waste. It is performed through sustainable and natural modes of regeneration, in a way that by-products are reused in a different cycle to minimize inputs and reduce waste. Ingredients of low impact, diversified, repurposed, and regeneratively produced are the four main potentials for the circular economy in the food industry.  

The circular economy promotes elimination of waste and use of natural resources that can yield up to $4.5 trillion in economic benefits to 2030.

Circular economy in the food supply chain 

The current supply chain is bombarded with issues like an increase in population and the ever-increasing demand for food while there has been a shortage of natural resources like water, limited land, labour etc. along with pressure to keep the emissions of greenhouse gases in check. 

With the traditional supply chain or the linear supply chain, products were produced and consumed with no further processing done to the wastes that find their way into landfills. The recent shift towards sustainable agricultural practice has brought the circular economy, wherein products are produced, used and then disposed of. It concentrates on deriving the maximum out of a resource, for as long as it is possible to provide the benefit of regeneration to a product. The circular economy doesn’t change the structure of the food supply chain but it adds value to every process in the supply chain to strive toward ecosystem optimization. 

It works by providing extra economic value while contributing to the environmental value through the process of circulation. It uses efficient and redesigned management processes to minimize resource utilization and environmental impact while maintaining economic growth. To put it into a nutshell, the circular economy makes, uses, remakes, reuses and recycles. 

Experience reduced environmental impact, optimized resource utilization, and compliance with global sustainability standards.

Discover how our cutting-edge traceability and sustainability platform empowers large exporters like you to embrace circularity in the agri-food industry!

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How does CE in food supply chains affect people and the planet? 

Economic growth 

A circular economy concentrates on efficient resource utilization and sustainable agricultural practice which creates a gain in terms of fewer resources utilized and more yield produced with the same available resources. The economic gain also creates room for a special workforce creating employment, lowing the cost of raw materials and less maintenance. 

Food security and health 

Regenerative and organic agricultural practices are promoted in the circular economy which focuses on producing high-quality food while keeping the environment safe. This not only ups overall health but acts to consumers’ access to fresh food. 

Climate impact 

Circular economy adds to the benefits of regenerative and sustainable agriculture to reduce emissions on a global scale. Around 62% of emissions occur in the production and processing stage and the remaining are emitted during the supply and service stage. With CE working on reusing and reducing wastes, it contributes to the reduction of greenhouse emissions. 

Conserve nature 

While a linear economy ultimately depletes resources to produce products, a CE works on optimizing the ecosystem through cleaning water, recycling, reducing wastes, reusing, pollination, less chemical usage, etc. these actions not only reduce the usage of raw material and wastes but creates a positive impact in preserving the ecosystem. 

Challenges in transition to CE economy 

Training and investment 

A farmer has minimal knowledge about the number of waste that he produces and the amount of opportunity cost that he is losing out on recycling and producing by-products. This requires technical knowledge and a special workforce to provide the skills, knowledge and methods to implement CE throughout the supply chain. This has a high economic investment at the beginning.  

Lack of regulation, innovation and incentives 

The slow rate at which CE is implemented in the food industry is because of unclear government regulations, lack of implementation, fewer innovations, less support, etc.  

Reverse logistics 

The circular economy requires products to be sent back to specialized sites for recycling or reuse, these create issues related to reverse logistics which in turn increases transportation.  

Supply chain support 

When an organization decides to implement CE practices, the benefits are fully earned when the entire supply chain works unanimously in the same direction. Lack of support has reduced the impact of CE implications. 

Uncertain lifetime 

There is a technological limitation created by products from CE which becomes uncertain about the phase of a product, durability, quality maintenance, etc. 

Technology Drivers for a Circular Economy 

Technology and innovations are opening up new opportunities. Solutions for waste valorisation give value to food waste, promoting a circular economy. These techniques turn food waste into finished goods, animal feed, or food components. 

  • Plant based alternatives for protein intake 

New technologies are making it possible to create meat, dairy and fish alternatives. Biotech entrepreneurs are developing meat substitutes to lessen the carbon footprint of the food processing industry. These either include meat substitutes made from plants or cellular farming. Cellular agriculture is used by the Dutch start-up Meatable to create a sustainable meat substitute. The startup does away with the necessity to slaughter an animal by utilizing induced pluripotent stem cell (iPSC) technology. It cultivates fat and muscular tissue from cells obtained from living cows and pigs. After that, it blends the two to produce a sustainable meat substitute. 

  • Investment in food and agriculture research 

A Singaporean firm called UglyGood is working on a waste-valuation solution. The start-up collects, processes, and extracts high-value items from fruit pulps and peels from fruit juicing businesses. Citrus fruit waste is converted into organic cleaning products or animal feed. The start-up additionally extracts orange peel essential oils using the cold press technique. By giving the waste fruit stream more value, it prevents emissions and creates a circular economy. 

  • Blockchain technology for transparency in food value chains 

Digital technologies provide capabilities to transform the existing food systems and accelerating transition to a circular economy. Sustainable food production practices with the smallholder farmers and ensuring responsible and sustainable consumption by the  end consumers can drive a circular economy that redefines growth and promotes a positive system. 

How TraceX Solutions help?

TraceX blockchain powered traceability platform ensures a climate resilient and sustainable food supply chain. The traceability solutions provide end to end visibility and transparency throughout the supply chain. It enables stakeholders to make informed decisions, reduce waste and optimize resource utilization.

Food waste Reduction

The robust inventory management and product traceability helps to minimize losses in the supply chain. Real-time data capture enables quick recall management ensuring food safety and minimal food wastage.

Sustainable Sourcing

These solutions enable organizations to source raw materials by tracing their origin and ensuring compliance with responsible practices. Companies can contribute to regenerative agriculture by choosing suppliers committed to circular economy principles.

Carbon Footprint Management

Trace Carbon, the carbon management platform allows organizations to measure, monitor and report their greenhouse gas emissions. This helps companies to set reduction targets and implement strategies to achieve carbon neutrality.

Product LCA

TraceX solutions help companies to assess their product’s environmental impacts from production to disposal which further aids them to design products with longer life cycles.

Consumer Trust

TraceX’s end to end traceability authenticated with QR codes brings in transparency and trust enabling consumers to make sustainable choices.


The tracking and verification of sustainable practices across the value chains ensures adherence to standards and   boosts brand reputation of committing to circularity.

Companies can leverage TraceX solutions to embrace circular economy principles, reduce waste, conserve resources and contribute to a resilient future.

Benefits of Circular Economy 

  • Maintains health of mankind and ecosystem balance. 
  • Access to fresh food ensures safety of food 
  • Empowers the smallholder farmers for local food production 
  • Boosts innovation 
  • Contributes to GDP growth 


Embracing the circular economy in the food and agriculture industry is not only a moral imperative but also a strategic advantage. As we strive to build a sustainable future, traceability solutions emerge as a powerful ally in this transformative journey. By promoting transparency, reducing waste and optimizing resource utilization, traceability solutions empower organizations to make impactful decisions that benefit both the environment and the bottom line.

Don’t miss out on the opportunity to make a difference!

Start your journey towards a greener tomorrow with TraceX. Contact us now and see how we can empower your business for a sustainable future.

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Download your Circular Economy in Food Supply Chains here

Download your Circular Economy in Food Supply Chains here

Download your Circular Economy in Food Supply Chains here

Download your Circular Economy in Food Supply Chains here

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