As manufacturing industries become more cognizant of the ecological effects that their firms have on the surrounding environment, their waste streams are increasingly becoming viewed not as materials in need of disposal, but rather as resources that can be reused, recycled, or reprocessed into valuable products. Within the food processing sector there are many examples of value-added use of processing residues, although many of these focus solely on utilization as livestock feed ingredients. In addition to livestock feed, though, many other potential avenues exist for food processing waste streams, including food grade as well as industrial products. Unfortunately, the challenge to food processors is actually conducting the byproduct development work. In fact, no clear delineation exists that describes necessary components for an effective byproduct development program. This paper describes one such strategic methodology that could help fill this void. It consists of identifying, quantifying, characterizing, developing, analyzing, optimizing, and modeling the waste stream of interest. This approach to byproduct development represents an inclusive strategy that can be used to more effectively implement value-added utilization programs. Not only is this methodology applicable to food processing operations, but any industrial or manufacturing firm could benefit from instituting the formal components described here. Thus, this methodology, if implemented by a manufacturer, could hold the potential for increasing the probability of meeting the goals of industrial ecology, namely, that of developing and operating sustainable systems.