Large amounts of food are wasted and valuable contents are not utilized completely. Methods to process such wastes into biomass of defined composition automatically and in decentralized locations are lacking. Thus, this study presents a modular design for residue utilization and continuous production of the heterotrophic alga Galdieria sulphuraria. A life cycle and economic assessment are carried out on the hypothetical design to define whether the proposed system can be ecologically and economically viable. Producing one kg of dried biomass would cost 4.38 € and be associated with 3.8 kg CO₂ eq emitted, 69.9 MJ of non-renewable energy use, and 0.09 m² of land occupation. Sustainability is comparable to conventional protein sources, with further improvement foreseen through avoidance of drying. These results demonstrate how circular bioeconomy potentials of residues could be realized using heterotrophic G. sulphuraria. It highlights key issues of developing an environmentally and economically sustainable concept.