Food and beverage manufacturers are sitting on untapped margins. Gary Schuler, Founder & President of GTF Technologies, treats side streams not as a disposal problem but as a profit engine, turning peels, pomace, and spent grain into premium ingredients, packaging inputs, and energy feedstocks. His thesis is bold and practical: circular innovation isn’t philanthropy; it’s a smarter P&L.
Schuler’s talk, “Creating Revenue Streams from Waste Systems,” at this year’s EATS spotlighted technology that stabilizes and valorizes byproducts to cut waste, hit ESG targets, and boost profitability, backed by real-world results. In the Q&A ahead, he gets tactical on payback, pilots, and scaling, showing how modern manufacturers can convert waste into durable growth.
Q. For a long time, waste was simply a cost center. How have you seen executive attitudes shift toward viewing waste as a resource, and what’s driving that change?
Gary Schuler: The first thing you need to recognize is how much waste is actually being created in the food industry. When making beer, juice, or other packaged food, 40 to 60% of the raw material used in the final product is wasted. No other industry tolerates 40 to 60% raw material waste. If you were making a table or some other product, you would have a team of engineers swarming if it was anything above 5%. Yet the food industry has tolerated that because they’ve been able to.
Think about orange peels or the brewer’s spent grain from the beer industry. They’ve traditionally sold that away as cattle feed or sent it to landfill. Landfilled food waste actually creates 58% of all methane gas emissions in this country. But in certain states like California, you can’t landfill food waste. At the same time, there is less need for animal feed with fewer people eating meat. A lot of the cattle farmers have exited certain states.
So if you can’t landfill it and you can’t find a cattle farmer, what are you going to do with all this food waste? It’s only waste because you let it be waste. What if we can stop the rot? What if there’s a way to stabilize your raw material that you paid for to make your product and create a second revenue stream? All while improving your environmental conditions?
Q. Are today’s conversations more about sustainability goals or about margin improvement?
GS: I would say it’s less about sustainability, believe it or not. It’s helping companies make or save money. No one’s going to invest in the capital equipment unless there’s a business case. Once they realize they can make money, or they can save their operational costs, sustainability is the cherry on top.
Q. You’ve worked with both global brands and regional producers. When companies implement your technology, what does the financial picture look like — where do they start to see payback?
GS: Once we’ve tested their material, we understand what that byproduct or co-product is, and we’ve looked at where the markets are, we’ve seen an ROI of less than two years on their capex. Operating margins can be in excess of 80%.
Q. Are there particular cost categories (waste disposal, energy, raw material recovery) that deliver the fastest ROI?
GS: I would say it’s what are you going to do with the final good? What’s the value of the dried product on the open market?
There’s a high demand for fruit, vegetable, and other plant-based proteins. Brewer’s spent grain, believe it or not, has over 30% protein, and almost 50% fiber. It’s a keto diet dream. Or if you’re making baby carrots, what happens to the carrot pomace? There’s a worldwide market for carrot powder.
And the market for powders is very high. It’s a $74 billion business. Most of it comes from China and India, so there is a demand for North American-sourced ingredients with traceability and a five-log kill step.
There’s a hidden world here. You may have a raw material that, if it’s stabilized and powderized in the right way, could be a nice unrealized revenue stream.
Q. What does scalability look like for waste valorization, and what needs to be true operationally for it to work company-wide?
GS: Oftentimes, what I recommend is to start with a pilot system. Our technology can scale. A single system can go into less than 400 square feet. It’s all electric, so it’s very easy to place inside a facility. You don’t have to build a new building. If you have basic electrical drops and water, you could actually have your co-products coming right off the line and going into drying.
So start with a small system where you’re able to produce powder and find the markets for that powder. Once you have purchase orders for the powder, it’s easy to justify scaling up.
Certain products can be used for sustainable packaging. There’s a whole new market opportunity for fiber-based materials. Think about pineapple cores. What happens to the pineapple skins? It’s got high fiber content and is useful as a food ingredient, but imagine if the outside of your food packaging was made with a co-product that was once considered waste. That can scale up quickly.
Q. Do you see common bottlenecks: space, training, cross-department coordination?
GS: Everybody’s trying to deal with food waste in its wet form. But if they stabilize it, it’s a whole new product. It comes down to knowing whether there’s a more cost effective way to stabilize material on site without disrupting the operation. Because if you’re making juice, that’s your primary market. We can’t upset the internal workings of that juicing operation.
That’s why we’re excited about the fact that the equipment is so compact, fully automated, and only uses electricity — that’s opening up a whole new world. Other traditional drying systems can be four to 10 times bigger and use a lot of energy or natural gas. That’s typically the reason why companies have shied away from looking at new opportunities.
So the bottleneck becomes matching up the powder producers with the right powder buyers. They’re out there — we just need to connect them. You’re essentially developing a whole new go-to-market strategy at that point.
Q. How does automation or real-time monitoring enhance the consistency and quality of these upcycled products?
GS: Our equipment is designed to the standards of being ready-to-eat. In other words, if I’m taking excess spinach, for example, and powderizing that material, how does that final product — the nutrient, color, aroma, and flavor profiles — compare to other heat-driven drying systems? And who are the buyers? Because they’re going to want to evaluate whether it meets the right standards.
Our system has 20 sensors continually measuring temperature, humidity, speed, and other factors to ensure the end product complies with the customer’s specifications for that particular product in that particular facility. Every product “recipe” is custom designed and programmed for easy and minimal operator interface.
For a lot of powders on the market, there’s no traceability. Somebody who’s wanting to buy that powder wants to know exactly how it was grown, how it was produced in that facility, and if they provide a five-log kill step. So for that client, we have to make sure that our equipment meets all the food safety requirements, just like any other food manufacturing process.
What’s great about this is there is no raw material cost. That’s where the business case comes in powerfully, especially if the company is paying to get rid of it. Now, they’re not only saving on the operational costs for tipping fees and disposal, they’re providing a product that could in essence give them revenue because it’s better than what is available on the open market today.
That’s what’s really exciting — you may have a hidden gem right under your nose.
Q. Your brewer and cherry producer case studies are powerful. What role does collaboration play — between production, R&D, and sustainability — in making projects like those succeed?”
GS: For the cherry producer, the cherry juice and the cherry pomace was already a side stream. They had realized the value of that because of the applications for cherry powder. But they were freezing it and shipping it to a third party company to spray dry it. Now that equipment is in house. So that’s saving them a lot of money.
For the brewing industry, spent grain has been a revenue generator. They could get, let’s say, $20 a ton for the wet brewer’s spent grain sold to cattle farmers — problem solved. In this particular case, the brewer couldn’t find a cattle farmer. And they’re producing four and a half million pounds of waste a week. So they’re now transporting that brewer’s spent grain 300 miles away, which takes them 127 semis every week.
Now people are starting to say, “Wait a second. Is there a better way for us to look at this side stream not as waste, not as a problem, but as a material that generates revenue?” It can be used as a bread ingredient or for sustainable packaging, which directly meets their ESG goals.
Your question is very perceptive — there is a huge overlap between R&D, sustainability, and operations to see the potential, but sometimes it’s a challenge for larger companies to get these siloed departments to collaborate.
Q. Do you find that these projects change how teams talk to each other about value creation?
GS: It’s a little fragmented. Our challenge is often trying to talk to the right people. Who is going to be the internal quarterback to drive this? Engineering and food safety also need to be involved. It hasn’t been as fluid as I would like to see it.
If it’s coming from an environmental standpoint, even that has changed within the last couple of years. We’re getting a lot of calls right now from companies in Europe because of our energy costs being lower, and they’re realizing the benefits. I think most American companies also realize this. They’re not going to be able to ride this scooter forever. We have to look at it more from an all-encompassing standpoint — not just environmental but operational as well.
But from day one, I present it as a positive business opportunity with a direct environmental impact. That resonates throughout the C-suite all the way down, and it’s hard to argue with.
Q. What emerging byproducts or industries do you think will define the next wave of innovation?
GS: I see a lot of equipment here at EATS for sausage and cooked meat production, which has a lot of side stream co-products. Could that be turned into powder for pet food applications and protein?
Another potential wave could be waste-to-energy. There are already companies that have been making their own energy. Alaskan Brewing, for example, up in Alaska, had to innovate because they couldn’t find a cattle farmer. So 60% of their energy comes from turning the brewer’s spent grain into energy. In order to do that, they need it to be small and dry.
Heineken has a project circle doing the same thing. They’re realizing that the energy cost there has gone up significantly and are looking at ways to innovate and create their own energy using a side stream. They’re still going to need a way of drying and stabilizing that material, which may be a good new growth opportunity – for us and them.
Q. Is there a trend, innovation, or breakthrough that you would place your bet on?
GS: Sustainable packaging. We have an apple project going. Typically apples are sold in plastic packaging. But you can replace that with packaging made with some of the apple powder from the cores and the skins. It’s the same with the brewer’s spent grain. Every ton of plastic that we can replace could be an 85% carbon elimination.
Q. You’re talking with food producers, packaging companies, and tech providers here at EATS. What kinds of conversations are you most excited to have — and what do you hope people take away from your session?
GS: What I’m always looking at is who’s in the audience and who’s interested. Because I can have the greatest technology in the world, but it won’t matter if I’m not solving their business problems. So I’m hoping for more conversation around what their side streams are and what they’re currently doing with it. And if we stabilized it to turn it into new revenue, would it be a solution to their problems?
Q. Looking five years ahead, how do you see waste valorization reshaping both the economics and the culture of food manufacturing?
GS: It’s not waste unless we waste it. Number one, if there’s a way that we can stabilize it, we improve value.
Second, by 2050, we’re going to have 10 billion people on this planet. Where are we going to get enough protein, enough fiber to not just feed but nourish those people? And today, as we sit here, 2.3 billion people are food insecure. One out of nine people don’t have enough food on this planet today to lead a normal, healthy life. And yet, one third of all food and half of all fruits and vegetables grown worldwide are wasted. There’s enough food there to keep up with the growing population, but the reality is food rots.
But what if there’s a scalable solution to save perishable food before it rots? Once it’s stabilized, it’s shelf stable for two to three years. You can use it for a number of different applications — artificial dye replacement, sustainable packaging, food ingredients, and feeding people. I think the food industry has a responsibility to reduce food waste.
