New Zealand tech turns surplus crops into high-value exports

A new food technology developed in New Zealand to upcycle horticultural waste into high-value products is forecast to impact food imports, emission levels, grower income and regional job creation.

The technology, pioneered by sustainability venture Powered by Plants, in collaboration with the New Zealand Food Innovation Network (NZFIN), provides a means of diverting large quantities of perishable fruit and vegetables from landfill, instead processing them into shelf-stable powders, concentrates and extracts for use across the food, nutraceutical and supplement industries.

Additionally, the system also delivers bioenergy, organic fertiliser, and high-protein insect meal from waste that previously could not be recovered. A zero waste process, it captures all emissions and leaves no residual material throughout the cycle. Artificial intelligence is utilised to help sort material, improving efficiency and output consistency.

Dr Andrew Prest, Director of Powered by Plants, said the concept was driven by concern over the present food production model, in which approximately 20% of harvested produce does not make it to market, instead being discarded early in the supply chain or sold at unsustainably low prices.

With New Zealand's export horticultural sector valued at NZD $7 billion and producing more than 6.2 million tonnes of fruit and vegetables annually, addressing the environmental and financial costs associated with this waste is considered significant.

Prest noted the extent of losses in the onion industry as an example, stating that it produces about 110,000 tonnes a year, earning NZD $170 million in export income. Despite this, up to 20% is still sent to landfill.

"Growers are stuck in an unsustainable commodity cycle where they're selling most of their crop fresh and dumping the rest, either to landfill or as low-value stock feed.

"At the same time, New Zealand imports thousands of tonnes of processed food ingredients and extracts, including 1,100 tonnes of onion powder, which could be locally manufactured from existing crop surpluses and processing off-cuts."

The new technology, according to Prest, can process surplus or off-cut waste from almost any fruit or vegetable, including carrots, mushrooms, capsicum and blueberries, and could be adapted further to crops like kiwifruit and stone fruit.

Grant Verry, Co-Chief Executive Officer of NZFIN, said the method represents the kind of transformation needed in the country to reach its agricultural export objectives. He highlighted the importance of intellectual property protection to support scaling the technology internationally.

"This technology has the potential to dramatically reduce food waste and increase returns for Kiwi growers and processors by turning what was once a loss-making by-product into a premium product.

"For some growers, this could be the difference between profit and loss. It offers them options so instead of sending unsold produce to landfill or stockfeed, they can now receive more revenue by choosing to sell into a higher-value, local, circular and sustainable bioprocessing food system."

Verry described the system as a fully circular "bio-loop", intended to add value at each stage of the waste cycle. The process begins with biostabilisation to create valuable ingredients from recoverable material, whilst non-recoverable biomass is converted into either biogas or insect protein through black soldier fly farming. By-products, including liquid digestate and frass, are blended into organic fertilisers which can substitute synthetic imports.

The company's future plans include the development of regional 'spoke and hub' biorefinery networks in areas such as Gisborne, Pukekohe, and Hawke's Bay to process up to 8,000 tonnes of surplus and waste produce annually. Facilities will be locally staffed to support activities from sorting to processing.

"The goal is not just to reduce waste but to give growers a better, more resilient, future-proof business model and in turn, help future-proof the nation's food security," Prest said.

The role of artificial intelligence will include early-stage scanning and detection of spoilage or off-specification produce, a measure expected to reduce product rejection and improve quality for premium end-markets.

The upcycling model is projected to generate considerable economic gains, particularly for crops such as onions, where the process could deliver up to NZD $52.8 million from the biostabilisation phase alone, according to Prest. Further income streams are anticipated through insect protein, biogas, and bio-fertiliser production, as well as the provision of renewable heat and electricity for onsite use or supply to the national grid.

Prest said the pilot was conducted in the Franklin region, an important centre for New Zealand's produce supply, and noted it remains susceptible to severe weather events.

"Cyclone Gabrielle wiped out large volumes of crop in the region, highlighting just how urgently we need localised, flexible waste recovery infrastructure to become resilient."

Verry added that the approach could rebalance supply chain power, benefiting producers who currently lack negotiating leverage.

"Growers have very little negotiating weight under the supermarket duopoly. The grower has no real alternative to sell through this channel because produce is perishable and low term chilled and frozen storage costs are high and will only increase. This new system gives them back some leverage."

"This is not just for New Zealand, countries across the Asia-Pacific region face the same problem with small block growers, high food loss and low returns. We believe this is a scalable solution to global food system challenges.

"We're not going to double our food exports by raising more cattle or increasing fishing quotas, with physical production capacity in New Zealand nearing its limits, adding value is the only way forward," Verry said.

Prest indicated that after initial industry support, seed funding is now required to support a pilot commercial production run and development of a full-scale facility and network of rural sorting points. Feedback from the market has so far been positive, with interest from food manufacturers and service providers aiming to reduce import dependence.

"Many growers are on the brink, and cannot afford to pay high salaries and wages for the hard work and long hours that are required. This in turn is failing to attract the next generation of growers.

"Whilst automation does offer some efficiency and cost benefits, we still need to employ and pay humans in order to support local economies and communities. If we can help growers and fresh produce processors to diversify and add value to what they grow, and manufacture we can keep people working in the horticultural industry - and keep healthy, fresh produce affordable in the supermarkets.

"Instead of earning NZD $20 a tonne for waste onions sent to a dairy farmer or burying in landfill, our process can earn NZD $3,000 per tonne from food-grade product. That shift alone can revitalise an entire sector.

"Growers are telling us they're excited about the revenue potential, the crop 'optionality', the waste reduction and the chance to pay higher wages to local people in their communities.

"Our vision is to see sorting hubs in key growing regions around the country, staffed by locals and powered by smart tools. We want to revitalise these communities and create a circular food economy that benefits everyone.

"We've proven the model is financially viable and has the potential to grow horticultural exports, we just need the investment to unlock this national, and potentially global, opportunity."