This study examines food upcycling and focuses on its commercial potential and environmental impacts. In addition, this study explores how the food upcycling strategy can transform discarded food materials into higher-value products and thus promote sustainable development in the food industry. The inefficiencies of the global food system not only highlight the unsustainability of current food production and consumption patterns but also lead to unnecessary resource losses and increased environmental burdens, such as greenhouse gas emissions and water wastage. This study analyzes the current status of food waste and its impacts on the environment and economy, defining the market demand and urgency for the upcycling of food waste. Transitioning to a circular economy and sustainable food systems is critical to resolving this crisis, and food upcycling offers a viable path to achieving this goal. This study examines international cases, particularly the operational elements of Upcycled Foods, Inc., which has over ten years of experience. Then, this study proposes strategic recommendations, including (1) developing market-demand-driven and nutritionally valuable sustainable products, (2) optimizing supply chain management, (3) employing effective marketing strategies to highlight the environmental benefits of the products, and (4) obtaining third-party certifications to enhance market recognition. Finally, this study suggests that establishing collaborations with academic institutions, government departments, and professional organizations will strengthen research and development capabilities and help the industry overcome challenges, successfully enter the mainstream market, and promote a new model of sustainable development globally.