As cities worldwide strive to transition to more sustainable food systems, small and niche circular food businesses are increasingly recognized as innovation leaders. However, scaling such initiatives beyond the experimental phase remains a significant challenge. A recent study based on eleven circular food ventures in Toronto, Canada, provides critical insights into what helps or hinders these businesses in their journey towards growth.
Circular Economy in the Food Sector
The study begins by contextualizing Circular Economy (CE) thinking within the food system, outlining various circular food activities, including food waste valorization, urban agriculture, redistribution, and regenerative farming. These principles aim to reduce waste, close nutrient loops, and minimize environmental harm while improving social outcomes.
Using Toronto as a case study, researchers conducted interviews and surveys with eleven businesses at different stages of scaling. This provided a rich dataset to identify recurring success factors and systemic barriers. The research was notably conducted during the COVID-19 pandemic, offering a unique opportunity to study how circular businesses responded to a major disruption in the food supply chain.
Five Categories of Success and Barrier Factors
The analysis revealed five interconnected categories influencing scale-up potential:
- Business Model Maturity: The most successful businesses operated across multiple stages of the food chain, had at least two to three years to refine their operations, and secured early-stage investment.
- Social and Environmental Priorities: Circular food businesses typically prioritize impact over profit, often opting to avoid traditional funding sources that require aggressive growth metrics. This value-driven orientation can sometimes make it more challenging to access grants or business development programs.
- Government and Policy Support: While government incentives can aid in scaling up, inefficient allocation or overly narrow eligibility criteria often render these supports ineffective or inaccessible.
- Partnerships and Ecosystem Engagement: Small businesses struggle to measure and communicate their circular impact. Collaborations with universities, corporations, or larger NGOs could provide essential technical expertise and visibility. However, such partnerships remain rare.
- Innovation Preparedness: Businesses that actively invest in making their solutions both technically robust and socially acceptable are more likely to experience growth. Yet, this often requires upfront capital and knowledge that small entrepreneurs lack.
The Role of Larger Actors and Systemic Support
A core finding is that niche circular innovations cannot scale in isolation. Larger ecosystem actors, including corporations, municipalities, universities, must play a greater role by sharing expertise, absorbing the costs of technical support, and embedding circular solutions into their own operations. Advisory networks, incubators, and matchmaking platforms can accelerate these connections but require more funding and institutional backing.
Insights for Policymakers and Funders
The study raises critical questions about how “growth” is defined and supported. Traditional economic performance indicators often fail to capture the full value of circular initiatives, which frequently generate broader social and environmental benefits. Governments and funding bodies must broaden their frameworks and develop new metrics that align with circular goals.
Research Gaps and Future Directions
Two major gaps remain in circular food system research:
- Cost-Benefit Analyses: More data is needed on the operational and environmental cost savings of circular practices, especially for small businesses.
- Life Cycle Assessment (LCA): Many small firms are unable to conduct comprehensive LCAs, which limits their ability to demonstrate the environmental benefits of their practices.
Expanding access to LCA tools and supporting the development of simplified models could enable more firms to quantify their impacts and make stronger business cases for circularity.
Conclusion
Scaling circular food businesses requires more than passion and innovation. It demands a supportive ecosystem that rethinks growth, shares resources, and invests in long-term impact. This study offers a roadmap for policymakers, funders, and industry partners to empower the next generation of sustainable food innovators.