Italian paper mill profitably upcycles waste into luxury goods
An Italian paper mill is proving that circular manufacturing can drive revenue growth, using agricultural by-products to produce premium paper at competitive prices for global luxury brands.
Favini, a 120-year-old family-owned paper mill in northern Italy, is replacing tree cellulose with agricultural and textile by-products to manufacture high-end paper. The company currently processes 14 different types of waste into its "Crush" range, which is sold globally for luxury packaging and tote bags.
This shift matters for European manufacturing because it demonstrates that circular production can be scaled profitably. Eco-friendly papers now account for 10% of Favini’s annual turnover, representing the company’s fastest-growing segment, with prices matching traditional high-quality papers.
Scaling this model requires strict filtering of raw materials. "Right now, we are working on two types of residues: tomato skins and corn," said Giacomo Berton, Head of Research & Development at Favini. The company has tested over 500 types of biomass but found that only about 5% are viable for industrial production.
Recovered materials make up between 10% and 40% of the final product. "It is a clear example of how discarded materials from one industrial supply chain can be creatively upcycled and turned into new raw materials," said Marketing Manager Michele Posocco.
Securing a consistent supply chain relies on partnerships with about a dozen Italian and international businesses. Veneto-based coffee roaster Dersut supplies coffee bean "silverskin" to make 60,000 premium shopping bags for its own brand.
Dersut CEO Lara Caballini di Sassoferrato noted that a 2022 collaboration with the University of Padua identified the paper production use case for the roasting by-product. The initiative earned Dersut the Sustainable Company 2025 award and prompted the partners to plan further collaboration.
Downstream demand is rising as luxury clients seek sustainable options without sacrificing quality. DUEGI Packaging, which has worked with Favini for three decades, has increased its purchases from the mill by 300% in recent years. "That growth has been driven by customers who value craftsmanship, supported by an industrial partner capable of delivering at scale," said Gabriele Rostellato, Production Manager at DUEGI Packaging.
Favini’s pivot began in the early 1990s when it patented Alga Carta, using algae from the Venice lagoon. "He positioned this small company in a niche market," Export Sales & Marketing Director Andrea Favini said of his grandfather's early vision. "At the time, environmental concerns in the paper industry appealed to only a very limited number of customers."
