Approximately one third of food is wasted globally through the food value chain. Production and consumption of food such as meat and dairy products are generating huge waste which affects significantly on sustainable food system. Food resource loss has been a huge concern with the global food waste increasing to $2.6 trillion and 6.8% of global emissions. To increase resource and energy efficiency circular economy (CE) model has been introduced as a solution to achieve sustainability goals. The transition towards a CE in most cases requires change in infrastructures and innovation of business model. Digital technologies such as artificial intelligence (AI) can enable circular solutions by collecting, storing, and analyzing data generated within production and logistics processes. Utilizing data insights can help in making more efficient operations in closed-loop food systems. The research concerning the CE for food industry has focused mostly on manufacturing, production and waste management. However, utilization of AI in traceability, resource and energy optimization in food processes requires more research both in theory and empirically. Therefore, this article focuses on a food by-product processing and recycling company focused on the rendering of meat industry side streams in Finland. The company increases the level of circularity while lowering the environmental negative impacts by ensuring that the alteration of by-products from meat productions into renewable industrial products. To optimize the logistics operations, real-time data is collected, and AI-based models are developed to leverage the data. Real-time data enables monitoring the status of the materials and when leveraged by AI ensures that collected materials will reach the company as fresh as possible. In addition, utilizing AI models will help the company to overcome the challenge of large data streams storage.