The Potential of Circular Business for Suboptimal Food Products Based on Environmentally Friendly Consumption

Background and objective: This research aims to examine the potential of circular business for suboptimal food productsin the context of environmentally friendly consumption in Indonesia by analyzing the influence of populations with foodinsecurity and inadequate food consumption on food expenditure in Indonesia. Methods: This research consists of independent variables: Prevalence of Population with Moderate or Severe FoodInsecurity (X1), Prevalence of Inadequate Food Consumption (X2), and dependent variable: Percentage of Expenditure onFood (Y). A panel data analysis method was used to identify the partial and simultaneous relationships between thesevariables. The data source for this research is secondary data from the Central Bureau of Statistics (BPS) Indonesia from2020 to 2023. Results: Partial test results show that food insecurity has a significant negative impact on food expenditure in Indonesia. This means that an increase in food insecurity can encourage the acceptance of more affordable suboptimal food products,thereby reducing expenditure. Additionally, it was found that inadequate food consumption has a significant positive impacton food expenditure. This means that the provision of cheaper suboptimal food can reduce inadequate food consumptionand help lower the percentage of expenditure on food. Simultaneously, food insecurity and inadequate food consumptionaffect food expenditure. Increases in food insecurity and inadequate food consumption can drive up food expenditure. Conclusion: The implementation of a circular business for suboptimal food products faces various challenges, includingnegative consumer perceptions of the quality and safety of suboptimal products. This research confirms that despitesignificant challenges, with the right strategies and strong collaborations, the circular business of suboptimal food productshas great potential to grow and contribute positively to a more sustainable future.