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How to innovate business models for a circular bio‐economy?

January 2021
Business Strategy and the Environment 30(3)

DOI:10.1002/bse.2725

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Authors:

Mechthild Donner

French National Institute for Agriculture, Food, and Environment (INRAE)

French National Institute for Agriculture, Food, and Environment (INRAE)

Shifting from a linear to a circular bio‐economy requires new business models. The objective was getting insights into the uncharted research field of business model innovation for a circular and sustainable bio‐economy within the agrifood sector. Eight European cases valorising agricultural waste and by‐products by closing loops or cascading were studied regarding their innovation drivers and elements, via interviews, on‐site visits and secondary data. In this domain, the findings highlight that business model innovations are depending on the (i) macro‐environmental institutional‐legal conditions and market trends, (ii) driven by internal economic, environmental and/or social objectives, but especially strongly linked to (iii) other actors often from different sectors seeking synergies and (iv) value co‐creation via combined organisational and technological innovations. Business models for a circular bio‐economy thus depend on various action levels and need radical combined organisational and technological innovations for a most efficient usage of agricultural waste and by‐products. This also means new business configurations instead of linear innovation strategies currently still being dominant due to economic viability.

the internal drivers and elements of innovations at the business model level are presented for each case. A difference is made between innovation of the business model itself, either as a new creation or reconfiguration of an existing model, and of inno-

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RESEARCH ARTICLE

How to innovate business models for a circular bio-economy?

Mechthild Donner

1

| Hugo de Vries

2

1

INRAE –French National Research Institute

for Agriculture, Food and Environment, UMR

MOISA (University Montpellier, CIRAD,

CIHEAM-IAMM, INRAE, Institut Agro),

Montpellier, France

2

INRAE –French National Research Institute

for Agriculture, Food and Environment, UMR

IATE (INRAE, Institut Agro, University

Montpellier), Montpellier, France

Correspondence

Mechthild Donner, INRAE, Joint Research

Centre MOISA, 2 Place Pierre Viala, 34060

Montpellier Cedex 1, France.

Email: mechthild.donner@inrae.fr

Funding information

European Union's Horizon 2020 research and

innovation programme, Grant/Award Number:

688338

Abstract

Shifting from a linear to a circular bio-economy requires new business models. The

objective was getting insights into the uncharted research field of business model

innovation for a circular and sustainable bio-economy within the agrifood sector.

Eight European cases valorising agricultural waste and by-products by closing loops

or cascading were studied regarding their innovation drivers and elements, via inter-

views, on-site visits and secondary data. In this domain, the findings highlight that

business model innovations are depending on the (i) macro-environmental

institutional-legal conditions and market trends, (ii) driven by internal economic, envi-

ronmental and/or social objectives, but especially strongly linked to (iii) other actors

often from different sectors seeking synergies and (iv) value co-creation via com-

bined organisational and technological innovations. Business models for a circular

bio-economy thus depend on various action levels and need radical combined

organisational and technological innovations for a most efficient usage of agricultural

waste and by-products. This also means new business configurations instead of linear

innovation strategies currently still being dominant due to economic viability.

KEYWORDS

agricultural waste and by-products, bio-economy, business models, circular economy,

co-creation, innovation, sustainability

1|INTRODUCTION

In a context of limited natural resources, climate change and growing

population, circular economy has become a popular concept for sus-

tainable development and of increasing interest for policy makers,

companies and the civil society. It aims to shift from the current linear

‘take-make-dispose’model to closing loops by recycling and reusing

products, components and materials, and by reducing waste to a mini-

mum (Ellen MacArthur Foundation [EMF], 2013; Murray, Skene, &

Haynes, 2017). It is thus considered as a new and alternative way to

reconcile economic growth with the use of natural resources and to

develop sustainable economic systems, but with a narrower focus on

economic and environmental dimensions (Geissdoerfer, Savaget,

Bocken, & Hultink, 2017). The implementation of circular economy is

still in an early stage but driven worldwide by diverse policies, con-

cerning macro, meso and micro action levels (Ghisellini, Cialani, &

Ulgiati, 2016). As an emerging concept (Velenturf et al., 2019), there is

not yet a common definition of circular economy (Kirchherr, Reike, &

Hekkert, 2017; Korhonen, Honkasalo, & Seppälä, 2018), it is

rather used as an ‘umbrella term’(Homrich, Galvao, Abadia, &

Carvalho, 2018). The Ellen MacArthur Foundation conceptualises and

defines circular economy as ‘an industrial system that is restorative or

regenerative by intention and design’(EMF, 2015).

In the past years, the importance of circular economy for the

agrifood sector has been highlighted (Barros, Salvador, de

Francisco, & Piekarski, 2020; EMF, 2015; Esposito, Sessa, Sica, &

Received: 31 July 2020 Revised: 10 December 2020 Accepted: 25 December 2020

DOI: 10.1002/bse.2725

This is an open access article under the terms of the Creative Commons Attribution-NonCommercial-NoDerivs License, which permits use and distribution in any

medium, provided the original work is properly cited, the use is non-commercial and no modifications or adaptations are made.

© 2021 The Authors. Business Strategy and The Environment published by ERP Environment and John Wiley & Sons Ltd..

Bus Strat Env. 2021;1–16. wileyonlinelibrary.com/journal/bse 1

Malandrino, 2020; FoodDrinkEurope, 2020; Jurgilevich et al., 2016).

In Europe alone, around 90 million tonnes of food and 700 million

tonnes of crops are wasted each year (http://agrimax-project.eu/),

and the worldwide food production and supply chains consume about

30% of the global energy production (Food and Agricultural Organisa-

tion of the United Nations, 2015). Agricultural waste and by-products

are usually defined as plant or animal residues that are produced dur-

ing various agricultural operations and that are not or not further

processed into food or feed (Organisation for Economic Co-operation

and Development, 1997). Waste streams are produced in all parts of

the agrifood system or chains, mainly due to over-dimensioned,

spatially or temporarily in-adapted processes and handling schemes.

However, agricultural waste and by-products can be converted into

valuable resources, resulting in new value-added bio-based products

such as bio-energy, bio-fertilisers, bio-materials or bio-molecules

(Venkata Mohan et al., 2016). Creating value from or valorising

agricultural waste and by-products is challenging due to the heteroge-

neity and perishability of agri-resources, and the seasonal and territo-

rial fluctuations in volumes and quality (Donner, Gohier, & De

Vries, 2020); this even more holds for urban food waste. Moreover,

different valorisation opportunities exist in alternative sectors, with

differences in value, as shown in the value pyramid for biomass

valorisation (Rood, Muilwijk, & Westhoek, 2017). Cascading

approaches, that is, a multiple and diversified use of waste streams

through consecutive production processes (Ghisellini et al., 2016) via,

for example, biorefineries require then careful consideration (Donner

et al., 2020). Research on circular bio-economy approaches for

valorising agricultural waste for new products is relevant but still

presenting important gaps, including new circular business models, as

highlighted in the recent literature review by Barros et al. (2020).

A shift from a linear to a circular and sustainable bio-economy

requires a radical change at a system level (Science Advice for Policy

by European Academies, 2020). Circular economy is thus strongly

linked to innovation, as important policy measures and socio-

economic changes, including new technologies and products, are

needed for a transition. On the other hand, circular economy can also

be a driver for eco-, responsible or sustainable innovation in produc-

tion and consumption (Boons & McMeekin, 2019). Companies need

to rethink and redefine how they understand and do business and

how they generate and offer value to customers (Centobelli,

Cerchione, Chiaroni, Del Vecchio, & Urbinati, 2020; Pieroni,

McAloone, & Pigosso, 2019). Hence, business model innovations are

needed that offer new products or services and/or new market

opportunities (EMF, 2013); especially between businesses, new

interactions emerge (Stewart & Niero, 2018). Therefore, business

managers and researchers increasingly explore how new, sustainable

and circular business models can create economic growth while

reducing negative effects on the natural environment and society

(e.g. Bocken, Strupeit, Whalen, & Nußholz, 2019; Boons &

Lüdeke-Freund, 2013; De Giacomo & Bleischwitz, 2020; Schaltegger,

Hansen, & Lüdeke-Freund, 2016; Stubbs & Cocklin, 2008).

Our research objective is to get insights into the drivers and

elements of business model innovation within the agrifood sector

and contributing to the circular bio-economy transition via agricul-

tural waste and by-product valorisation. Eight European circular

business cases are studied that convert agricultural waste and by-

products into value-added products, with particular attention to

their business model and technological innovations. The underlying

questions are: (i) What types of circular business model innovations

exist in the agricultural sector? (ii) Is agribusiness model innovation

for a circular bio-economy different from the linear economy? And

(iii) What would be needed for more radical innovations in the

agrifood domain leading to more circularity? With our study, we

contribute to the recent discussion on business models for a circu-

lar bio-economy and fill the specific gap in the agricultural sector.

We also propose a new conceptual framework for circular business

model innovation connected to bio-technological innovations in the

agrifood sector, which shows the complexity and interactions at

different action levels.

2|LITERATURE REVIEW AND

THEORETICAL FRAMEWORK

2.1 |The business model concept

Despite an increasing research interest in business models and busi-

ness model innovations, a sound theoretical foundation is still missing

(Pucihar, Lenart, Kljaji

c Borštnar, Vidmar, & Marolt, 2019). In general,

a business model describes how a firm does business, that is, the

activities of a firm, the way it operates and how it creates value for its

stakeholders (Casadesus-Masanell & Ricart, 2010; Magretta, 2002;

Teece, 2010). The notion of value is central to a business model and

has been broadened from economic value to environmental and

social value within the emerging literature on new and sustainable

business models (e.g. Birkin, Polesie, & Lewis, 2009; Schaltegger,

Lüdeke-Freund, & Hansen, 2012), hence including the three pillars of

sustainability (people, plant and profit; Elkington, 1998). The concept

of circular business models is more recent and builds on management

literature and on circular strategies from the resource efficiency

field (Nußholz, 2017). It thus integrates principles and practices from

the circular economy with the goal to achieve a more resource

effective and efficient economic system (EMF, 2015). Accordingly,

Mentink (2014, p. 35) defines a circular business model as ‘the ratio-

nale of how an organization creates, delivers and captures value with

and within closed material loops’. Linder and Williander (2017, p. 2)

define it as ‘a business model in which the conceptual logic for value

creation is based on utilizing the economic value retained in products

after use in the production of new offerings’, thus highlighting the

return flow from the user to the producer. Sustainable and circular

business models are closely related and can be considered as a

sub-category of business models (Antikainen & Valkokari, 2016).

However, circular business models offer new perspectives by

developing strategies to close, slow, intensify, de-materialise or

narrow resource loops (Bocken, De Pauw, Bakker, & Van Der

Grinten, 2016; Ünal, Urbinati, Chiaroni, & Manzini, 2019).

2DONNER AND de VRIES

2.2 |Business model innovation

In contrast to business models, the concept of business model innova-

tion (BMI) is less well understood, perhaps because its literature is

more recent (Foss & Saebi, 2017). There is general agreement that

business model innovation (BMI) is continuously needed due to

market liberalisation, increased competition and changing socio-

economic conditions. Nowadays, products can easily be copied and

local markets overtaken by international competitors (Taran, Boer, &

Lindgren, 2015). BMI can thus increase the resilience of firms to

changes in its environment and become a source of a firms' competi-

tive advantage (Mitchell & Coles, 2003). Some authors go even further

by considering that BMI can reshape industries, contribute to more

sustainability (Geissdoerfer, Vladimirova, & Evans, 2018) and possibly

even ‘change the world’(Massa & Tucci, 2013, p. 438). However,

BMIs are risky, as they are time-consuming and require investments,

for example, in R&D, resources or equipment. Therefore, a systemic

and holistic thinking to innovation is recommended, instead of an indi-

vidual and isolated approach (Amit & Zott, 2012). BMI consists of

changing a business model by creating, diversifying, acquiring or trans-

forming it (Pieroni et al., 2019). Massa and Tucci (2013) distinguish

between two types of BMI. The first refers to the design of novel

business models for newly created organisations (business model

design), the second to the reconfiguration of an existing business

model (business model reconfiguration), in which managers acquire new

or reconfigure existing resources to change their business model.

Regarding the degree of innovation, one can distinguish between

radical and incremental. While radical innovation describes a high

degree of novelty or a breakthrough, that is, an innovation which

breaks with previous structures, procedures, activities or products in a

firm, an incremental innovation has a low degree of novelty, is less

risky, and does not break with previous products, processes or

organisation methods but significantly improves them (Souto, 2015).

Moreover, Bocken, Short, Rana and Evans (2014) describe eight

archetypes of sustainable business models, classified in higher order

groupings that show three main types of innovation: technological,

social or organisational. They suppose that firms can use one or several

archetypes as references for shaping their own transformation.

2.3 |Drivers of business model innovation

There are few studies on BMI drivers, which may be ‘many, different

in nature, placed at different levels, and be external or internal to a

firm’(Foss & Saebi, 2017, p. 217). Hence, BMI can be triggered either

by internal (technology-push or inside-out) or external (market-pull

or outside-in) opportunities or threats (Bucherer, Eisert, &

Gassmann, 2012). Innovations due to changes in the external environ-

ment have been described in earlier studies, such as changing

demands of stakeholders (e.g. Ferreira, Proença, Spencer, &

Cova, 2013), changes in the competitive environment (e.g., De Reuver,

Bouwman, & MacInnes, 2009), opportunities brought about by new,

for example, information and communication technologies

(e.g. Pateli & Giaglis, 2005), or other general trends such as consumer

awareness, circular economy or CSR (corporate social responsibility)

(Todeschini, Cortimiglia, Callegaro-de-Menezes, & Ghezzi 2017). The

ability to innovate a business model in response to major external

environment changes has been characterised as ‘dynamic capability’

(Teece, 2018; Zott, Amit, & Massa, 2011). Bocken and Geradts (2020)

have identified internal drivers for sustainable BMI within large

multinational corporations at three levels: institutional (e.g. norms

and believes that affect organisational behaviour), strategic

(e.g. collaborative innovation) and operational (e.g. people capability

development). Finally, Schaltegger et al. (2012) highlight the link

between a firms' overall strategy and its BMI for sustainability:

(a) defensive strategies with slight degrees of business model adjust-

ment or adoption might be motivated only by a need to comply with

legislation and protect the current business model, (b) accommodative

strategies go along with a change and improvement of the business

model by addressing environmental and/or social objectives;

(c) proactive strategies lead to business model redesign and fully inte-

grate sustainability issues in their products and processes.

2.4 |Circular business model innovation

Circular business models are in general driven by the objective to rec-

oncile commercial value creation with resource efficiency strategies

(Nußholz, 2017). However, circular business model (innovation) is a

recent field of research (Bocken et al., 2019; Ferasso, Beliaeva, Kraus,

Clauss, & Ribeiro-Soriano, 2020; Lopez, Bastein, & Tukker, 2019;

Lüdeke-Freund, Gold, & Bocken, 2019; Pieroni et al., 2019) and espe-

cially in the context of agriculture, still reveals a gap in literature

(Barros et al., 2020). Circular BMI depends on the larger business eco-

system and a broad range of actors and stakeholders (Antikainen &

Valkokari, 2016; Brown & Bajada, 2018; Evans et al., 2017; Lüdeke-

Freund, 2020): ‘Circular business model innovations are by nature

networked: they require collaboration, communication, and coordina-

tion within complex networks of interdependent but independent

actors/stakeholders’. (Antikainen & Valkokari, 2016, p. 7). Therefore,

an analysis of circular BMI should be linked to an innovation system

perspective. Boons and Lüdeke-Freund (2013), by reviewing literature

on sustainable innovation, have identified three levels of analysis at

the system boundaries: (i) an organisational, focused on individual

firms and their own value adding activities; (ii) an inter-organisational,

concerning the interrelationship with other actors that co-create and

share values; and (iii) a societal, considering the wider landscape for

transition and interrelationship with other organisations to produce a

shared societal value. However, research on circular economy

has mostly been limited to one action level (Barreiro-Gen &

Lozano, 2020). Furthermore, Antikainen and Valkokari (2016) have

offered a framework for sustainable circular business model innova-

tion. In this framework, they integrate—apart from the business level,

which consists of the nine business model canvas building blocks pro-

posed by Osterwalder and Pigneur (2010)—the ‘business ecosystem

level’(referring to trends and drivers and to a stakeholder

DONNER AND de VRIES 3

involvement having a direct impact on the business model) and the

‘sustainability impact’(environmental, social and business require-

ments and benefits). The idea is to come to a continuous sustainability

and circularity evaluation of the business model innovation, in order

to optimise the processes.

2.5 |Towards a theoretical framework

The considerations above about business models and their innova-

tions are summarised in a theoretical framework (Figure 1) that is used

as basis for analysing and discussing our results. It consists of two

levels, the business level itself and the wider context, that is, the

business eco-system level. At the business level, one recognises the

internal drivers for innovation (Bocken & Geradts, 2020; Foss &

Saebi, 2017) and the main features of the circular business model

innovation. The latter refer to the (i) business model itself (Massa &

Tucci, 2013), (ii) business model or canvas model elements

(Osterwalder & Pigneur, 2010), (iii) innovation types (Bocken

et al., 2014), (iv) degree of innovation (Souto, 2015) and (v) innovation

strategy (Schaltegger et al., 2012). At the business eco-system level,

the external drivers are to be considered; if adapted to the specific

bio-economy context, the Reseda (2017) methodology for analysing

by-product valorisation pathways is most relevant. Also, the

stakeholder involvement is crucial as revealed in the sustainable

circular BMI framework by Antikainen and Valkokari (2016).

3|METHODOLOGY

Our study was realised within the European H2020 project NoAW

(No Agricultural Waste), driven by a ‘near zero-waste’society require-

ment and aiming to develop innovative approaches for the conversion

of increasing volumes of agricultural waste and by-products into

eco-efficient bio-based products. In particular, co-products from wine,

cereals and manure were addressed. Although the focus of the project

was on technological development aspects, one working package was

dedicated to the challenge of how to design new business and mar-

keting strategies for a cross-sectoral valorisation of agricultural waste

and by-products.

For this socio-economic working package, a qualitative research

approach was defined, which is the dominant methodology for ana-

lysing business models so far, to explore them as current phenomena

in their given contexts, as well as the antecedents and consequences

of their configurations (Ehret, Kashyap, & Wirtz, 2013). The case

study method was chosen, as ‘an empirical enquiry that investigates a

contemporary phenomenon in depth and within its real-life context,

especially when the boundaries between phenomenon and context

are not clearly evident’(Yin, 2009, p. 18). This method is particularly

appropriate for developing a new theory and answering questions of

why, what and how, and it allows better understanding of the nature

and complexity of a phenomenon (Voss, Tsikriktsis, & Frohlich, 2010).

It is also suited to generate relevant knowledge for managers

(De Massis & Kotlar, 2014). In business model research, a scarcity of

case studies has been stated, making it ‘challenging for firms to under-

stand how to innovate their business models, identify and design

alternatives, then assess and select the most adequate one’(Evans

et al., 2017, p. 598).

Eight cases were studied in 2016–2019, four from France, two

from Germany, one from Italy and one from the Netherlands. Multiple

case study augments the external validity (Voss et al., 2010). The

cases were selected for the following reasons. First, because they

offered sufficient elements for an analysis of their innovation. The

selected cases were also representative as they consisted of different

types of business models (Donner et al., 2020), were centred on the

three different focal product chains of the research project (wine,

cereals and manure), and their agricultural waste and by-product

valorisation relied on different technologies with different product

outputs: either via a simple closing loop (e.g. bioenergy production

1

)

FIGURE 1 Theoretical framework

1

Mostly via anaerobic digestion, that is, processes by which microorganisms break down

biodegradable material in the absence of oxygen, used to produce bioenergy.

4DONNER AND de VRIES

or a cascading (diversified used of waste streams) approach implying

many actors. Another reason to investigate these business cases was

the relative availability and openness of the managers to share more

detailed information and organise site visits. As the cases were from

project-partner countries, partners could provide additional informa-

tion for the cases and their contexts. Nonetheless, we had to limit the

number of interviewees and interviews considering the realities of

(especially small and medium-sized) enterprises, characterised by lim-

ited time and resources that can be allocated for external activities

(Ünal et al., 2019).

The data collection was done through field and desk research.

The field research involved an on-site visit for each case and at least

one semi-structured interview with one or several members of the

company, with different positions, for example, CEO, R&D or market-

ing managers (Table 1). The interviews had an approximate duration

of 2 h. Key informants were also regularly contacted by e-mail for fur-

ther clarifications. The interview guide included questions about the

macro-environmental political-legal (policies, laws and regulations),

economic (markets and subsidies), social, technological and environ-

mental conditions, as well as micro-level business aspects such as his-

torical (origin, triggers and development of the initiative),

organisational (governance, partnerships and logistics), technological

(type and maturity of technologies used, examples of by-product

valorisation and outputs), marketing and financial (investments and

cost–benefit structure) elements. The site visits focused on the pre-

sentation and explanations of the technologies, the observations of

the different agricultural waste and by-products used for valorisation

(from animals or crops) and the logistics (transport, storage and

weight). These visits had durations between 1 and 4 h and were

mainly guided by the interviewed persons, sometimes with support of

technical experts. The data from these field visits, mostly in form of

photos or notes, were discussed after the visits by the authors and

provided additional insights especially regarding the amounts of waste

valorised, the innovativeness and technology-readiness-levels (from

pilot-scale to full implementation). The primary data were triangulated

with secondary data from desk research, that is, academic articles if

available, online articles, videos and internet sites of the companies,

and internal documents such as reports or presentations directly

received from the companies.

Interview and secondary data were transcribed and analysed

according to the content method, which relies on an analytical inter-

pretation of data and is used to make ‘replicable and valid inferences

from texts’(Krippendorff, 2004, p. 18; Berg, 2009). A hand-coding

was done for each case (within-case analysis). This was done by the

leading author and then verified and discussed with the other author.

In a first step, general features assigned to the businesses were stud-

ied. This was done to provide first insights and illustrate major issues

for each case regarding its main actor(s), resources and transformation

TABLE 1 Research methodology characteristics

Case Country Type of business model Data collection

1 Germany Small biogas plant The biogas plant owner is a customer of a project

partner, who is consultant within the biogas domain.

Regular exchanges, one group face-to-face interview

with the plant owner and one joint field visit with

the project partner.

2 Italy Small upcycling entrepreneur The firm is a project partner. Regular exchanges, one

group interview and discussion with 3 persons, joint

field visit.

3 France Large environmental biorefinery Preliminary face-to-face and e-mail exchanges, one

telephone and two face-to-face interviews with the

director of the open innovation platform and field

visit.

4 France Large agricultural cooperative The firm is a project partner. Regular exchanges, four

interviews, two with R&D and two with marketing

manager, including field visit.

5 Netherlands Large agripark The lead firm of the park is a project partner. One

group interview with CEO and operational manager,

regular e-mail exchanges, field visit to get a general

overview of the park.

6 Germany Small agripark Two interviews (1 telephone and 1 face-to-face), one

field visit.

7 France Small support structure First exchange about their main activities followed by

in-depth interview, a field visit and several e-mail

exchanges.

8 France Medium-sized support structure One group interview with four persons (director of the

association, of the cluster of enterprises, of a waste

treatment firm, of an international firm) and joint

discussion, field visit.

DONNER AND de VRIES 5

processes, value proposition, key partners, customers and strategic

approach (Table 2). Next, data were analysed regarding the more spe-

cific innovation elements as main focus of this work. For processing

this coding, the theoretical framework (Figure 1) was used as basis.

Here, we first identified the main trends and drivers at a macro-level

and stakeholders involved. Second, the contents regarding the origin,

evolution and key milestones of the businesses over time, and in

particular their main internal drivers to start or further develop their

business, were identified. Third, the innovation of the business model

itself and its nine buildings blocks (Osterwalder & Pigneur, 2010), the

innovation types (technical, organisational and social; Bocken

et al., 2014), degree of innovation (radical and incremental;

Souto, 2015) and innovation strategies (defensive, accommodative

and proactive; Schaltegger et al., 2012) were analysed. The main

outcomes were then summarised in Table 3. The overall objective of

the data analysis was to get insights into the external and internal

drivers for innovation, stakeholders involvement as well as specific

elements of circular business model innovation per case. On the other

hand, it served to summarise generic outcomes within a single

scheme (Figure 2). Finally, it allowed to develop a new conceptual

framework for circular business model and technological innovations

(Figure 4).

4|RESULTS

This section starts with a more general presentation of the character-

istics of the eight cases studied, as described in the methodology,

including their main actor(s), resources and transformation processes,

value proposition, key partners, customers and strategic approach

(Table 2). This provides a first introduction to each case. Next, follow-

ing the theoretical framework, in section 4.1, results about the internal

drivers for innovation and innovations at the business model level are

given (Table 3). In section 4.2, insights from the business ecosystem

level including stakeholders involved and external trends and drivers

are shown.

4.1 |Internal drivers and innovations at the

business model level for the eight cases

In Table 3, the internal drivers and elements of innovations at the

business model level are presented for each case. A difference is

made between innovation of the business model itself, either as a

new creation or reconfiguration of an existing model, and of inno-

vative business model elements, for example, novel products, tech-

nologies or forms of organisation. Each case is then classified

according to its main innovation type(s), degree and innovation

strategy.

Case 1, initially a farmer, was driven by the question of how to

create economic value out of agricultural waste, in the early 2000s

when the biogas boom started in Germany. In 2004, when the biogas

plant was already in operation for years and enlarged, he noticed that

the area to spread digestate

2

and nutrients would become a limiting

factor. Therefore, he decided to dry digestate in a new special large-

scale production facility and to produce and market a pellet fertiliser

himself. This allowed him to divert nutrients from agriculture into

other sectors like viti- or horticulture and to expand his business; this

required new scale-adapted supplies, distribution and market outlets

with stakeholders. Apart from this, he delivers the (often lost) heat

from his biogas plant to the nearby (eco-)village via appropriate, new

infrastructure, thanks to a joint initiative with the local community.

Also, he is building a new partnership with a local e-car sharing com-

pany for utilising locally produced electricity.

Case 2 was created in 2013 as a university spin-off in order to

enable and facilitate a market uptake of new technologies for agricul-

tural by-product valorisation. It is actually fully operational after the

creation of a first spin-off that had to stop after one year, mainly for

financial reasons. The spin-off is well embedded in a large cooperative

providing resources, housing and local assistance, while receiving

advice on biogas production and potential new biotechnological ways

to valorise their co-products; this allows mutually benefiting from

know-how and new opportunities. The university is now intended to

fully spin-out the company. The company attracts new employees and

continues to operate within the cooperative however also as an inter-

national consultancy firm in the agricultural sector. The key techno-

logical innovation is the combined biogas and PHA production—a

biodegradable polyester which potentially may, for example, replace

fossil-based plastics—via a new biotechnological concept exploited at

pilot-scale.

Case 3 was based on the willingness of local cooperatives to

diversify their activities in a synergistic way and to define a joint local

sustainable bio-economy development strategy. The aim of this pro-

cess of clustering was to create synergies by common technological

investments, to enter new markets via cereal and sugar cane by-

product valorisation activities, to close energy and material cycles and

increase farmers' revenues. The biorefinery can be characterised by

its high technological and organisational innovation capability. Its con-

cept is adopted by the regional government as a unique and attractive

example internationally, and fuels teaching and research activities,

even leading to the creation of an industrial chair on bio-economy,

hence providing scientific feedback to the case.

Case 4 was created in 1969 in order to ensure the existence of

the wine cooperatives in the region. In 1970, a new law obliged the

winemakers to deliver their waste from the production for distillation.

The valorisation of grape marc for distillation in one larger unit was

thus a collective response to this legal obligation. Since 1994, the

business started a diversification of new products and ingredients

towards new markets, the food and petfood industry and nutraceuti-

cal companies, hence evolving into a small ‘biorefinery’with the inclu-

sion of novel bio- and extraction technologies. In 2007, a geographical

expansion was decided upon in order to reach critical mass of waste,

2

Digestate is the remaining part of organic matter treated by anaerobic digestion, rich in

nutrients and nitrogen, and therefore an excellent organic fertiliser. But the management of

quantities is regulated because a surplus of nitrogen and phosphate damage the

environment.

6DONNER AND de VRIES

TABLE 2 Presentation of the characteristics of 8 business cases valorising agricultural waste and by-products

Case 1 Biogas

plant

Case 2 Upcycling

entrepreneur

Case 3

Environmental

biorefinery

Case 4 Agricultural

cooperative Case 5 Agripark Case 6 Agripark

Case 7 Support

structure

Case 8 Support

structure

Main actor(s) Farmer with a

biogas plant

University spin-off Eco-industrial

cluster with

various firms

Union of wine

cooperatives

Agribusiness park

manager

Consulting and

service company

Association Local cluster of

different

stakeholders

Resources and

transformation

process

Pig manure &

vegetables;

anaerobic

digestion, new

drying system

Cow manure &

wine; anaerobic

digestion, new

extraction

methods

Focus on cereals

and sugar cane

by-products; full

range of

agricultural,

forestry and

marine residues;

different bio-

refinery

processes

Waste and by-

products from

wine; extraction

and distillery

processes

Combined heat

electricity and

water

recirculation

systems

Manure, energy

crops; anaerobic

digestion, drying

Cereal husks; new

separation (de-

hulling),quality

schemes and

treatment

procedures

Organic urban food

and agricultural

waste handling

processes,

anaerobic

digestion

Value proposition Biogas, electricity,

bio-fertiliser,

heat

Electricity,

fertilisers, PHA

for bio-materials,

pilot-scale

equipment,

consultancy

Diverse plant by-

products,

applications in

the domain of

agriculture, food,

bio-materials,

chemical

industry, energy

Compost,

ingredients for

food, pharma &

pet food

industries

Heat, electricity,

logistics

Consulting for

waste collection

& valorisation,

fertiliser, humus,

electricity & heat

Cross-sector

cooperation

between farmers

and eco-

constructors

Biogas, network

Key partners Local farmers &

community,

technology

supplier, e-car

company

Cooperative, two

other

universities,

research centres

in EU

Agrifood

enterprises,

research

Cooperatives and

research

Vegetable

producers

(greenhouses)

and traders;

private partners

in water and

energy recycling

Public partner

(county), several

companies and

research partners

Farmers, research

institutes, other

associations

Local authorities,

enterprises and

research

Customers Public suppliers,

private

households

(electricity),

wholesaler

(fertiliser)

Electricity

corporations,

operators of

biogas plants

A large variety of

enterprises for

different

products

Enterprises in

different sectors,

consumers

Data-centres using

electricity and

producing heat

for greenhouses

Grid operator,

famers, private

customers and

consumers

Architects, house

constructors

Local enterprises

Strategic

approach

Enlarge product

portfolio for

mixed market

sectors

Innovation,

upscaling, pilot-

scale

demonstration,

consultancy

New markets for

large volumes of

by-products

Innovation, mixed

market sectors

Networking,

economies of

scale

Technology

development

hub, networking

Networking Support for

networking,

niche strategy

(organic)

DONNER AND de VRIES 7

TABLE 3 Internal drivers and elements of circular business model innovation

Case 1 Case 2 Case 3 Case 4 Case 5 Case 6 Case 7 Case 8

Internal

driver(s)

Create economic

value out of

agricultural waste

Enable and

facilitate market

uptake of new

technologies for

waste conversion

Diversify activities

and define a

common

sustainable

development

strategy

Collective response

to a legal

obligation

Create multiple

benefits by

clustering actors

locally; efficient

usage of

resources

Interest in jointly

developing a

value-adding

circular economy

approach

Enable cross-sector

cooperation for

by-product

valorisation

Cluster public and

private actors for

rural sustainable

development and

circular economy

Innovation of

BM itself

Stepwise

reconfiguration

of the BM from a

farm to a modern

biogas company,

created as limited

liability company

Newly created firm

as university

spin-off,

currently

considering to

become a

consultancy

company

Originally sugar

factory and

distillery,

stepwise

reconfiguration

to an agro-

industrial and

biorefinery park

Originally distillery

cooperative,

evolvement to a

specialized

enterprise for

wine waste and

by-product

valorisation

Reconfiguration:

from selling

ground and

logistics to an

innovative eco

−/agribusiness

park

Development from

a farm with

biogas and herb

drying company

to an integrated

food-energy park

Association

founded to

create cross-

sector synergies

among local

actors for cereal

by-product

valorisation, role

of intermediator,

facilitator

Creation of a

cooperative

platform for local

sustainable and

agricultural

development via

a circular

economy

approach

Innovative

BM

elements

Product: dried bio-

fertilizer via

special

production

facility

Partners: e-car

sharing company

(electricity),

technology

supplier, local

community for

heat

infrastructure

Customer: citizens

in bio-village

(heat)

Value proposition:

combined biogas

& PHA

production with a

new bio-

technological

concept,

consultancy;

shared

infrastructure

between farm

and spin-off

Technological

innovation

platform

Partners: ongoing

governance

formalisation,

integration of

various members

around different

types of

synergies (water,

energy, products,

R&D)

Value proposition:

Product

diversification to

a large portfolio

going from low to

high added value

via new

technologies

Partners: Cross-

sector

cooperation for

energy and water

efficiency,

interchange

between Data-

centres that use

electricity from

greenhouses and

produce heat

them

New channel:

tourist excursions

Value proposition:

technology

development

hub, creating

‘modules’to be

marketed (e.g.

algae and humus

projects)

Partners: public-

private

cooperation with

partly shared

infrastructure

Value proposition:

Husks valorised

for new value-

added products:

eco-insulation

and decoration

(former use:

heating or animal

litter)

Partners: cross-

sector

cooperation

Value proposition:

thematic

workshops and

meetings on

circular economy,

eco-conception,

waste prevention

and valorisation,

industrial ecology

Public-private

partnership

Main

innovation

type and

degree

Technological and

organisational

(incremental),

social (radical)

Technological

(radical but pilot

scale),

Organisational

(incremental)

Technological

(radical mixed

industrial and

laboratory scale),

Organisational

(radical)

Technological

(incremental and

radical but some

at laboratory

scale)

Organisational

(radical)

Technological

(radical but still

pilot scale),

organisational

(radical)

Organisational

(radical),

technological

(incremental)

Social (incremental),

organisational

(incremental)

Main

innovation

strategy

type

Accommodative Proactive Accommodative,

partly pro-active

as ‘cluster

initiative’

Accommodative Proactive Accommodative,

partly pro-active

as ‘cluster

initiative’

Proactive Accommodative

8DONNER AND de VRIES

changing logistic supply and demand chains substantially. This case

serves as example for national reports on valorising by-products from

wineries, receives support from the region and provides input to vari-

ous teaching courses, overall making it a private-public partnership

focused case.

In Case 5, the key trigger in 2002 was to cluster local companies

that could benefit from joint waste management, natural resources

use and logistics. The objective was to create synergies between

agrifood-related companies on a large-scale business park. At the

beginning, the focus was on logistics. During the planning process,

efficient usage of energy and water became more and more impor-

tant. Today, cross-sector cooperation and interaction exists between

big data-centres that use the electricity produced by greenhouses and

deliver their heat for greenhouses. The park is even organising tourist

excursion for promotional and educational reasons. The case has

shown to transform barren land into a fully operational business park

with only private means, hence serves internationally as an exemplary

case within the presentations about agriparks.

In Case 6, three people met with sought complementary skills and

with a common objective to implement a circular economy with new

technological developments around an existing biogas plant, in order

to keep it profitable. The entrepreneurs were thus discussing about

closing loops, circular economy, individual and common companies'

demands and supplies, and how to create and use synergies. The joint

business was founded in 2016 with the ambition to attract investors

and partners like the public utility for electricity and for the drying of

herbs via locally produced heat. The ambition was to create ‘modules’

to be marketed such as algae and humus mainly via a technology

development hub, followed by the production of fruit, vegetables and

fish locally in a CO

2

neutral manner by the use of biological

nutrient cycles.

The aim in Case 7 was to bring people from different sectors

together and inform them about value-adding valorisation opportuni-

ties for cereal by-products. In 2015, the actual joint association was

created collecting by-products of various cereals for different applica-

tions of hulled grain such as rice, spelt, buckwheat and barley in a new

sector, in particular the building sector. This association has become a

catalyst attracting many individual actors because it has developed

quality schemes, a portfolio of technical characteristics, treatments

and construction procedures, and networks of actors; in addition, the

know-how is continuously updated thanks to cooperation with nearby

research centres. It is thus working as an intermediate between two

usually separate sectors, namely, agriculture and construction.

Case 8 is the only public initiative with the objective to cluster

different public and private actors for sustainable development and

circular economy practices in a rural area. It was initially based on a

local cluster of small organic food enterprises. With the increasing

demands for sustainability and circular economy, including the

valorisation of urban food waste and agricultural by-products, the

cluster was reoriented and expanded. It now covers also biogas pro-

duction and waste treatment, benefiting from financial support of

local public, commercial and environmental bodies. The initiative is

original in the sense that it brings various actors with different orien-

tations together under the circular economy header.

From these cases, it can be concluded that circular BMI can be

triggered by diverse case-specific reasons, either by economic, envi-

ronmental and/or social objectives or a combination of those, or

because of legal obligations. But all cases have in common that they

FIGURE 2 Summary of the main findings

DONNER AND de VRIES 9

aim to convert agricultural waste into value added products

(bio-materials, food, fertilisers, feed and bio-energy) and to efficiently

use all resources from the agricultural production (by-products, water

and energy). Very often, this is done by bringing together complemen-

tary knowledge, resources, novel (bio-)technological know-how and in

particular also actors. Innovative cross-sector and/or public-private

cooperation as well as local clustering of actors have been evolving

allowing jointly co-creating circular economy concepts.

4.2 |The business ecosystem: An overall view on

stakeholders involved and external drivers

Regarding the types of stakeholders directly involved or concerned by

initiatives turning agricultural waste into value, the case studies show

that their variety and scope is rather broad. They encompass direct

local actors such as farmers that deliver agricultural residues or buy

bio-fertilisers, associated processing companies, various types of sup-

pliers, grid operators, consumers, wholesalers, members of an associa-

tion or cooperative, public actors, local residents, employees, financial

partners or investors and research institutes. External stakeholders

are in several cases (Cases 2, 3, 4 and 5) also international public and

private interest groups willing to learn via cooperation or consulting

from the European businesses. Challenges (regarding stakeholders)

concern above all awareness and education campaigns, particularly

towards local residents often being against biogas or biorefinery

installations due to odour and noise emissions or fear of health risks

(Cases 1, 3, 4 and 6). In order to convince and/or involve suppliers,

members, wholesalers, consumers and residents, reliability, product

quality and a good and transparent communication are expected and

important. Also, local benefits and participatory actions with residents

may overcome these barriers.

Results from the business ecosystem level analysis including gen-

eral trends and drivers are described at a political, legal, economic,

social, technological and environmental level.

The political level in terms of public national bio- or circular econ-

omy strategies and policies plays a crucial role for developing and

maintaining agricultural waste valorisation activities. In particular,

biogas production is strongly depending on incentives and subsidies,

for example, in form of feed-in tariffs (Germany, e.g. Case 1)—being

limited to 20 years and constantly decreasing, or co-financing for the

construction of biogas plants (France, Case 8) or moving from subsi-

dies for agricultural waste to urban waste (Italy, topic in discussion,

e.g. Case 2). Closely related to the political level are legal conditions

that define the rules and boundary conditions for agricultural waste

recovery, management and valorisation pathways. For example, the

removal of the obligation to deliver wine by-products to a distillery in

France in 2014 has an impact on the waste quantities to be collected

(e.g. Case 4), or in Italy, it is legally not allowed to mix agricultural

waste with food waste. In Germany, the Renewable Energy Sources

Act in 2012 has impacted the biogas production, as the use of maize

as feedstock for anaerobic digestion has been limited to 60%. At an

economic level, the demand and general performance of markets for

the existing or potentially entering materials, products or services,

competitiveness in terms of quantities and prices, long-term invest-

ments in technological facilities (e.g. Case 3) or an agri-logistic

network (Case 5) are determining conditions. Here, actors in all coun-

tries indicate that is it not only necessary to analyse existing market

trends but also estimate future developments (e.g. market opportuni-

ties, environmental restrictions and social perceptions). The social

level concerns, for example, the implication of the civil society and

awareness raising for bio-based products and services, something

which is only in its infancy stage. First examples are the (bio-)energy

villages (Case 1) and the co-construction of houses with biomaterials

(Case 7, France). In contrast, technological conditions for agricultural

waste conversion into biogas are in general rather well developed and

mature technologies are available on the markets, but continuous

improvement and learning by users (e.g. for biogas installations) is

needed (e.g. Cases 1, 6 and 8). The technological conditions for agri-

cultural waste conversion in a cascading manner for multiple and

diversified end-products are less well developed; at laboratory or pilot

scale, first potential technological concepts are elaborated (Cases 2, 3,

4 and 6). However, mature technologies at appropriate scales and

targeted at a wide range of functional properties of products are still

to be researched and explored (authors, 2020). At the environmental

level, agricultural waste and by-products partly suffer from a high

sensitivity towards climate change and extreme weather conditions

like elevated temperatures, periodic flooding and extended periods of

dryness (e.g. wine by-products and livestock—manure). Also, soil con-

ditions are impacting the agricultural waste conversion strategy or

valorisation pathways like for organic production (Case 8).

Figure 2 summarises the main findings: external trends and

drivers, stakeholders involved, internal drivers for innovation and

innovations at the business model level.

5|DISCUSSION AND IMPLICATIONS

Here, the results and their conceptual and management implications

are discussed while coming back to the three questions from the

introduction.

(i) With regard to the first question ‘What types of circular

business model innovations exist in the agricultural sector?’, results

indicate that business model innovation for a circular economy in this

sector depends on various case-specific drivers (Figure 2), wherein

the business ecosystem plays a crucial role, as earlier highlighted by

Antikainen and Valkokari (2016). These drivers lead to different types

of innovations for adding value to agricultural waste at the business

level, concerning either the overall business model or single business

model elements. Table 3 has shown that there are two ways of inno-

vating the overall business model. The first are entirely new start-ups in

the form of limited liability companies or an association, with proac-

tive strategies and directly focusing on agricultural waste and

by-product valorisation (Cases 2, 5 and 7); they all have already either

a simple network structure itself or are embedded in a network. The

second are business reconfigurations and evolutions from rather

10 DONNER AND de VRIES

classical farm or food processing activities to specialised companies

and integrated business parks choosing for circular economy

approaches (Cases 1, 3, 4, 6 and 8). The latter follow mainly accommo-

dative strategies, as they change and improve the business model by

addressing environmental and/or social objectives. However, Cases

3 and 6 can also partly be considered as proactive as they create new

circular economy clusters. Concerning single business model elements,

innovations were found in the form of new or higher value-added

products, applications, materials or ingredients, all based on the

principle to turn agricultural waste into new value propositions (Perey,

Benn, Agarwal, & Edwards, 2018; Zucchella & Previtali, 2019). But

there are also combined new value propositions (product, service

and/or technology (platforms), via co-creating new partnerships and

(public–private) cooperation with joint investments and for a better

resource efficiency, new customers or distribution channels. Overall,

technological often precede organisational and social innovations, but

a combination is also increasingly appearing. The degrees of innova-

tion for the cases are four times radical and three times incremental

for both technological and organisational innovations, whereas there

is only one radical social innovation. This is not surprising as within

the domain of agricultural waste valorisation, technological develop-

ments at least for high-value adding conversion pathways are still

ongoing and often not yet in mature stages or asking for scaling-up.

However, also organisational innovation types are imperative to

realise opportunities for agricultural waste valorisation since the

complexities and diversities in resources, products, technologies and

markets for individual companies are too substantial (Cases 1, 2, 3, 5,

6, 7 and 8). These then require follow-up joint technological (or even

logistical and social) innovations to remain competitive in economic

terms because social and environmental values are generally not

compensating economic value today.

(ii) These observations lead us to a new conceptual framework

(Figure 4) for discussing our second question: ‘Is agribusiness model

innovation for a circular bio-economy different from the linear econ-

omy?’This framework partly fills in the gap in circular BMI literature

in the context of agriculture as mentioned by Barros et al. (2020).

A traditional linear agribusiness model can be positioned within

three circles (Figure 3). The first and tiniest circle is the circle of ‘con-

trol’in which the individual business is able to manage and steer its

business strategy and operations. The second, somewhat larger circle,

is the circle of influence in which the key customers, clients and

consumers are situated. It is entitled ‘circle of influence’due to the

mutual exchanges and adaptations of actions. The largest circle is the

circle of ‘appreciation’of the wider ecosystem and contextual macro-

environment; here, the wider social and economic trends and global

agricultural and trade policies and laws are to be appreciated and

accepted as the framework conditions for business operations.

Our findings indicate that new circular business models,

corresponding to sustainable and circular bio-economy strategies, are

changing the representation of the three circles (Figure 4). First,

results suggest that the rather simple representation of the control cir-

cle should be adapted as many individual business models are to be

integrally considered with complementary new key resources (agricul-

tural waste, biotechnologies and complementary skills). Next, an addi-

tional second circle is now emerging in which joint activities and

synergies with partners in a cluster are taken into account, leading to

new value propositions (all cases). This means that the ‘sharing’of

business activities is now becoming the dominant circle of a circular

business system, still incorporating many tiny small circles rep-

resenting the individual business ‘control’units; this zone we entitle

‘co-creation zone’. The results show that co-creation is observed in

joint, efficient handling of key resources, cascading processes for mul-

tiple resources and products (Cases 2, 3, 4 and 6), shared logistics and

infrastructure (Cases 2, 3, 4, 5 and 6), common value propositions and

agreements (all cases), new cross-sector partners and networks (Cases

2, 3, 5, 6, 7 and 8), joint (training) events, matching complementary

knowledge and know-how (Cases 2, 3, 6, 7 and 8). The third circle—

called ‘influence’—also changes due to (i) a wider zone of influence of

a cluster towards other multiple customers, channels and segments or

clusters and markets as well as (ii) a joint responsibility for interac-

tively reaching solutions for a circular and sustainable bio-economy. It

is here where new value propositions connect to new opportunities,

providing a kind of continuum between co-creation and influence. We

therefore have made visible in Figure 4 that ‘partners in a cluster’,

which are directly involved in the circular business model, and stake-

holders, which are indirectly involved but still influence the business,

mutually interact. This well aligns new value propositions and new,

sustainable, opportunities.

Finally, the fourth and largest circle is in its overall meaning not

modified. The wider political, legal, environmental and social context

(the business eco-system) remains to be appreciated; however, it

should be interpreted in a more sustainable way to foster both

FIGURE 3 Simplified scheme for (agri)

business in a linear chain

Source: own design, inspired by Shell “Scenarios -

an explorer's guide”(2008; www.shell.com/

scenarios)

DONNER AND de VRIES 11

economic development and preserving natural resources. For exam-

ple, the limits or uncertainties about biogas subsidies are an external

driver for innovation, which seems to be appreciated (accepted) by

firms (Cases 1 and 2), innovating their business model towards new

‘green’products (e.g. targeted fertilisers), new markets and/or a new

‘intermediate’organisational type (e.g. consultancy and pilot-scale

offerings). However, this institutional-legal driver can also be consid-

ered as an opportunity to adapt, by heading towards a new clustered

circular business model with organisational-technological innovations

locally (Case 6, 8 and Case 3, at a larger scale). Environmental drivers

can have a similar effect, leading to new collaborations and synergies

between different local actors (Case 5). Also a ‘sharing or co-creation

by nature’business model such as a cooperative (Case 4) can be

driven by changing environmental conditions, like periods of extreme

droughts negatively impacting production yields, or the need to stay

competitive and resilient in case of insufficient available local

resources. Giving just responses to environmental and social chal-

lenges is not given for granted and may need time to mature; eco-

nomic robustness is not yet always reached (Cases 7 and 8). Hence,

business model adaption and/or innovation for more circularity

because of external changes is far from trivial due to many more

uncertainties and options in products, markets, regulations and actors

as compared with changing linear chains.

Figure 4 shows the new conceptual framework for circular busi-

ness model innovations connected to bio-technological innovations in

the agrifood sector, in which the co-creation zone is emerging. The

main findings (cf. Figure 2) are here integrated.

The proposed new circular business model conceptual framework

reflects well the results of our case studies on circular business model

innovation in the agricultural sector, in particular for an efficient usage

of new resources. It helps in clarifying insights from former studies on

circular economy and sustainable business model innovation,

highlighting the increased importance of the wider ecosystem and the

more complex interactions between the macro- and micro-level

(Antikainen & Valkokari, 2016), but also the meso-level of cooperation

and partnerships (e.g. Boons & Lüdeke-Freund, 2013). On the other

hand, it becomes evident that the implementation of circular bio-

economy at the business model level is often still immature, although

various businesses show the need and/or willingness to jointly adapt

and innovate in order to switch the linear to a circular logic. The

described cases are relatively recent evolutions; hence, circular BMI

can indeed be considered as recent field of research (Ferasso

et al., 2020).

(iii) Our third question ‘What would be needed for more radical

innovations in the agrifood domain leading to more circularity?’is also

challenging and very much depending on local playing grounds, regu-

lations, incentives, actors, resources, products and local-to-global mar-

kets. Even more, it asks for ‘dynamic capability’to cope with major

external environment changes as outlined by Zott et al. (2011) and

Teece (2018). For local circularity in the agrifood domain, downsizing

of technologies for in-field application, capability of handling agricul-

tural resources variability and mixed scales (in volumes and in poten-

tial market values), new entrepreneurship and interventions of

intermediates, new public-private cooperation models and in some

FIGURE 4 New conceptual framework for Circular Business Model Innovation in the agrifood domain

Source: own design

12 DONNER AND de VRIES

cases connections with local or nearby communities seem important

(Cases 2, 6, 7 and 8). Consequently, as compared with linear chains

focusing on a straightforward main product or value proposition, here,

both the organisational and the technological complexity are substan-

tially enlarged. In order to avoid chaos and well steer business, leader-

ship is asked next to shared ambitions and a well-organised

management process for changing or developing a new business

model. More diverse market-focused, flexible, eco-friendly technologi-

cal innovations as compared with technologies for high throughput,

high volume, single resource orientations are looked for (Cases 1, 2,

3 and 4). This also asks for social and organisational innovations—as

well as product and technology innovations—that are redesigned such

that applicability could be maintained and handled after first, second,

third and so forth usages; even suppliers become clients and vice

versa, hence the underlined interactivity (double arrow) between

these in Figure 4. This is fully in line with the circular economy defined

by EMF (2015) as ‘an industrial system that is restorative or regenera-

tive by intention and design’. New organisational networks and

technology innovations are needed for large-scale re-usage of energy

and water, however, need to go together with logistic innovations

(Cases 3 and 5). The social innovation dimension is less visible but

may require involvement of citizens at local level. We summarise the

main management recommendations and potential implications in the

following Table 4.

6|CONCLUSION

In this article, eight different European business cases, contributing

to the transition to a circular and sustainable bio-economy via

agricultural waste and by-product valorisation, have been

studied regarding their drivers and elements of business model

innovation.

Insights from the case studies highlight that business model inno-

vations for a circular bio-economy in the agrifood sector are

depending on various drivers and elements. They have to appreciate

the (i) macro-environmental institutional and legal conditions and mar-

ket trends, (ii) are driven by economic, environmental or social objec-

tives or a combination of those, but are especially strongly linked to

(iii) other actors often from different sectors seeking synergies and

(iv) value co-creation via combined organisational and technological

innovations (Figure 4). These links between different action levels

(Barreiro-Gen & Lozano, 2020) and between business model and

technological innovations (Ferasso et al., 2020) have not been clearly

shown before in literature on circular economy business models,

possibly due to the new area of research (Pieroni et al., 2019).

Our results also indicate that business models in the agrifood

domain are obliged to innovate themselves towards new

configurations in order to close material loops and switch to a cir-

cular economy. These new configurations should incorporate both

organisational and technological innovations in order to handle the

increased complexity of dealing with diverse resources and sustain-

able needs. Radical innovations are thus needed addressing con-

comitantly economic, environmental and social challenges, but also

to handle the complexities. Until now, radical technological and

organisational innovations in the agrifood sector are still rare; they

have often difficulties reaching marketable scales and becoming

economically viable. Fully closing cycles for agri-resources and cre-

ating value for (new) markets via cascading pathways for all main

and co-products is far from easy. Hence, business model innova-

tion should concern innovations of the business concept itself,

including both radical technological and organisational innovations

in which the relations between new technology developments,

business change and new ways of cooperation arise.

ACKNOWLEDGEMENTS

This project has received funding from the European Union's Horizon

2020 research and innovation programme under grant agreement

no. 688338. The authors especially thank the colleagues from WP5

who contributed to the data collection and the enterprises for the

interviews.

TABLE 4 Management recommendations and implications, in

particular for the agrifood sector

No. Recommendations

Potential management

implications

1 Investing in and learning

from circular BMI case

studies in different

external settings/areas,

both in agrifood and other

sectors related to the

wider bio-economy

(Tables 1, 2 and 3)

Putting in place management

processes that analyse

how business models

evolve under various

external & internal factors,

in particular also

considering seasonality,

heterogeneity of

agricultural resources,

quality decay and so forth.

2 Exploiting case studies with

other stakeholders in the

bio-economy, either

directly involved or

impacted by valorising co-

products and waste, for

getting insights while

utilising a common

framework (Figures 1 and

2)

Motivating stakeholders to

be involved in reaching

appropriate circular BMI in

the bio-economy via a

generic approach and a

common framework.

3 Exploiting the conceptual

framework (Figure 4) to

consistently explore and

optimise sustainable bio-

economy system

approaches as compared

with linear chains

(Figure 3)

A continuous monitoring of

outcomes for guiding and

optimising next actions to

most efficiently utilise

natural resources.

4 Creating a European-wide or

even global platform for

sharing best practices in

circular business model

innovations in the bio-

economy

Creating a management

learning network across

Europe for circular BMI

and how to avoid wasting

natural resources.

DONNER AND de VRIES 13

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BRIT FOOD J

Purpose The aim of this study is to identify the way in which research on new business models in agri-food sector has been developed, in order to identify the main lines of work followed and determine a future research agenda in this field. Design/methodology/approach A systematic review of the literature is carried out, by applying the PRISMA method to identify and classify the main articles published on agri-food business models in journals included in the Web of Science Core Collection database. Findings The systematic literature review has identified three main forms of business models in the agri-food sector: sustainable business models, technology-based business models and cooperative business models. The three types of new business models are complementary and can sometimes be adopted together. The identification of these types of business models and the variants included in each of them is a valid starting point for new developments in this field. Research limitations/implications The limitations of this study are those typical of any literature review and derived from the methodology used. The establishment of criteria relating to time, language, type of publication or database chosen means that this review may have left out relevant studies in this field of research. It is therefore recommended that new reviews be carried out with different criteria in the coming years in order to supplement the results obtained in this study. Originality/value Some research gaps were identified that should be further explored in the future. First, the relationship between digitisation and technological innovation in agri-food business models and the level of implementation of sustainable objectives in these business models has not been researched thoroughly. In addition, and despite the fact that the crisis caused by the COVID-19 pandemic has boosted innovation in agri-food business models, the authors have detected a lack of papers focused on solving problems arising from the shortage of raw materials or labour, possible energy crises or external dependence on local markets when it comes to meeting demand. The war in Ukraine has demonstrated the limitations of international markets, mainly the European market, when it comes to dealing with problems arising from this type of crisis.

Analyzing and mapping agricultural waste recycling research: An integrative review for conceptual framework and future directions

Article

Aug 2023
RESOUR POLICY

Economía agroalimentaria circular: tendencias gerenciales para la sostenibilidad de los sistemas de producción

Article

Full-text available

Aug 2023
REV VENEZ GERENC

Jesus R. Melendez

Actualmente para las organizaciones, los principios de la economía circular juegan un papel determinante en la generación de beneficios económicos en equilibrio con el ambiente y con los stakeholders involucrados en sus procesos productivos. En la economía circular el uso efectivo de los recursos y de tecnologías representan factores clave para alcanzar un desarrollo sustentable de los sistemas de producción agroalimentario. El objetivo de esta investigación se focalizó en describir los factores y fundamentos claves de la economía circular que interactúan con el sistema de producción agroalimentario desde el análisis de la ecoinnovación, tecnologías, y la sostenibilidad. La metodología se alineó a un protocolo para presentar revisiones sistémicas de literatura con nivel descriptivo, según la estructura Prisma, y el apoyo del software ATLAS.ti ® 22. Los resultados destacan eventos sostenibles de la economía circular en el sistema agroalimentario y sus beneficios en torno a las tecnologías disruptivas para la reducción, reutilización y reciclaje, sustentado en un modelo de ecoinnovación ecológica-productiva. Se concluye que la economía circular proporciona soporte al sistema de producción agroalimentario apoyándose en la ecoinnovación y la gestión gerencial integral, lo cual permite optimizar los resultados del impacto ecológico y el nivel de producción agroalimentaria dentro de los estándares de inocuidad alimentaria.

From waste to value: Addressing the relevance of waste recovery to agricultural sector in line with circular economy

Article

Jun 2023
J CLEAN PROD

The green to circular bioeconomy transition: Innovation and resilience among Italian enterprises

Article

Jun 2023

The bioeconomy is an essential part of the transition from a linear to a circular production model, which repositions production systems to favour sustainability and innovation. There are two main contributors to the development of this process: the choices made by public decision‐makers (national and European), and the strategies adopted by companies and the recent increased diffusion of new business networks and clusters in Europe, which favour industrial and technological transformation processes. We move from analysis of the international context and how Italy's positioning in the new circular bioeconomy is evolving to focus on the diffusion of business clusters and networks in Europe linked to the circular bioeconomy to propose a preliminary empirical study of corporate behaviour. For this we use survey data on Italian bio‐industries that are part of the cluster SPRING (Sustainable Processes and Resources for Innovation and National Growth). The results show how SPRING cluster firms are pushed to improve their positioning in numerous fields characterizing the most innovative business models.

Towards Circular Economy in the Agri-Food Sector. A Systematic Literature Review

Article

Full-text available

Sep 2020

Over the last decade, the unsustainability of the current economic model, based on the so-called take-make-dispose paradigm, has emerged. In particular, the agro-food sector (AFS) has been severely affected by such problems as resource scarcity and food loss and waste generation along the supply chain. In addition, climate change and biodiversity loss have helped to define an imperative paradigm shift towards a circular economy. Recently, with the publication of Sustainable Development Goals (SDGs), the scientific research examining the adoption of circular economy (CE) models and tools has increased. In this context, the importance of shifting towards a circular economy has become urgent. In this paper, a systematic literature review (SLR) was performed to investigate the state-of-the-art research related to the adoption of circular economy models and tools along the agro-food supply chain. Furthermore, this review highlights that, due to the complexity of the agri-food supply chain, it is almost utopian to define a unique circular economy model for the whole sector. In addition, it emerges that future researches should be concentrated on the integration of different stages of the supply chain with circular economy models and tools in order to create a closed-loop agri-food system.

How circular is the Circular Economy? Analysing the implementation of Circular Economy in organisations

Article

Full-text available

Jul 2020

Circular Economy (CE) has become one of the most recent ways to address environmental sustainability. CE activities focus exclusively on one of three levels (macro-level, meso-level, and micro-level). The majority of CE research has focused on the macro- and meso-levels, while research on the micro-level has been limited. This paper focusses on the latter by analysing how organisations have implemented the four Rs (reduction, repairing, remanufacturing, and recycling). A survey was sent to a database of 5,299 contacts from different organisations, from whom 256 complete responses were obtained. The results show that organisations focus on reducing and recycling more than repairing and remanufacturing, and in particular on internal CE efforts. Some organisations that engage with the 4Rs do not do it under the CE umbrella, whereas some that claim to apply CE have low levels of engagement with the 4Rs. The results indicate that organisations are using the four Rs to contribute to CE, but not all of them are aware that they are applying CE principles. The paper highlights that organisations need to improve their four Rs efforts to contribute more to CE by better linking its theory with practice. CE also has to be implemented outside the organisations, in a more holistic way, e.g. through better collaboration with stakeholders on CE efforts and activities. This research stresses that the gap between CE theory and practice needs to be closed to make Circular Economy circular.

Business models for environmental sustainability: Contemporary shortcomings and some perspectives

Article

Full-text available

Jul 2020

Recently, business models for environmental sustainability have gained increasing attention in the management field and among practitioners and stakeholders. This study aims to analyse the state of the art on the topic by reviewing the growing but mainly phenomenon‐driven research. In particular, by identifying main research trends and relevant gaps in the literature and by providing future research avenues, this paper advances the debate on the need for alternative concepts of doing business that go beyond the creation of economic value for a company in a way that generates value for the society. Our article undertakes two stages of screening the available literature and selects 151 peer‐reviewed articles published between 2007 and early 2019 for the review. The paper provides the first comprehensive systematic review of business models in the field of environmental sustainability with a detailed descriptive and critical analysis and with a discussion of future research opportunities.

Circular economy business models: The state of research and avenues ahead

Article

Full-text available

Dec 2020
Bus Strat Environ

This study investigates how the circular economy and business models are related in the current business and management literature. Based on bibliometric analytical procedures, 253 articles were retrieved from the Scopus, Web of Science, and ScienceDirect scientific databases. The articles were analyzed according to network analysis principles, and key terms were mapped into a network. We used VOSviewer to build the network, explore the most-researched terms and their relationships, and identify less-explored terms and research gaps. We furthermore conducted a qualitative review of selected publications to provide an illustration of quantitative results and delve deeper into the research topics. The main findings revealed the networks of current topics as they appear in the publications such as business models, the circular economy, circular business models, value, supply chain, transition, resource, waste, and reuse, and their most prevalent relationships. The results also highlighted several emerging topics such as those connected with managerial, supply-side, demand-side, networking, performance, and contextual considerations of circular business models.

A new circular business model typology for creating value from agro-waste

Article

Full-text available

Feb 2020
SCI TOTAL ENVIRON

Shifting from a linear to a circular economy in the agrifood domain requires innovative business models, including reverse logistics, new visions on customer-supplier relationships, and new forms of organization and marketing strategies at the crossroads of various value chains. This research aims to identify and characterise different types of business models that create value from agricultural waste and by-products via cascading or closing loops. Conceptual and management insights into circular business models are still sparse. In total, 39 cases have been studied that convert agro-waste and by-products into valuable products via a circular economy approach. Semi-structured interviews and on-site visits of six representative cases have been done, and secondary data been collected. Data has been treated with content analysis. Cases are presented according to the type of organisational structure, resources, transformation processes, value propositions, key partners, customers, strategic approaches and innovation. Six types of circular business models are identified and discussed: biogas plant, upcycling entrepreneurship, environmental biorefinery, agricultural cooperative, agropark and support structure. They differ in their way of value creation and organisational form, but strongly depend on partnerships and their capacity to respond to changing external conditions. This study offers the first circular business model typology within the agricultural domain, revealing the interconnectedness of the six different business model types. It provides options for managers in positioning and adapting their business strategies. It highlights the potential of using biomass first for higher added-value products before exploiting it as energy source. Cascading biomass valorisation at a territorial level will increasingly be important for locally cooperating actors within a circular bioeconomy approach.

Barriers and drivers to sustainable business model innovation: Organization design and dynamic capabilities

Article

Full-text available

Dec 2019
LONG RANGE PLANN

Sustainable business model innovation (SBMI) in large multinational corporations is increasingly perceived as a key driver for competitive advantage and corporate sustainability. While the SBMI literature acknowledges that corporations require dynamic capabilities to innovate their business model for sustainability, the role of organization design to nurture dynamic capabilities for this purpose has been scantly addressed. By taking a qualitative research approach, we address how organization design affects dynamic capabilities needed for SBMI. Accordingly, from an organization design perspective, we identified barriers and drivers on three levels: the institutional, the strategic, and the operational. The contributions of our study are threefold. First, we contribute to a recent discussion on how organizational design affects dynamic capabilities needed for business model innovation. Second, we present a multi-level framework to show how interconnected barriers and drivers obstruct or enable SBMI. Third, our study answers a call to advance theoretical perspectives on SBMI.

Sustainable entrepreneurship, innovation, and business models: Integrative framework and propositions for future research

Article

Full-text available

Feb 2020

Florian Lüdeke-Freund

This article introduces the business models for sustainability innovation (BMfSI) framework to study how business models mediate between sustainability innovations and business cases for sustainability. The BMfSI framework integrates two major perspectives (implicitly) found in the sustainable business model literature. The first is the agency perspective. It takes into consideration that some form of agency is needed, that is, “someone” who takes decisions and acts. Sustainable entrepreneurs are discussed as those agents who align their new or existing business models with sustainability innovations in order to be successful in business and to create value with and for stakeholders. The second perspective is the systems perspective, which acknowledges that business models are always embedded within sociotechnical contexts through which, for example, public policies, private financing, or stakeholder interests influence whether and how business models can be developed. The agency and systems perspectives are integrated in the so‐called business model mediation space. This theoretical notion embraces the decisions and activities pursued by sustainable entrepreneurs as they align their business models with sustainability innovations on the one hand and the influence of environmental contingencies, barriers, and stakeholders from the sociotechnical context on the other hand. The paper concludes with propositions for future research derived from the BMfSI framework.

Mapping of research lines on circular economy practices in agriculture: From waste to energy

Article

Oct 2020
RENEW SUST ENERG REV

Agriculture is one of the sectors that strongly contribute to greenhouse gas emissions on the planet. In this sense, circular economy practices can be advantageous when using bioenergy in the agro-industrial sector. Although only about 9% of the world's economy is circular, global initiatives have acted to change that scenario. Unlike the linear economy (take-make-use-dispose), the circular economy (grow-make-use-restore) aims to influence material and energy flows to increase environmental gains and avoid costs. Based on that, this study aims to map bioenergy boosters through circular economy practices in agriculture. To that end, a systematic literature review was conducted to present what is being developed in this field. To identify the most relevant, high impact, studies in the area, the systematic literature review was performed in three databases, covering all available literature up to date. The main research themes, applications, research topics, area of activity, countries, journals, publisher, and history of publication were identified. Therewith, some trends and perspectives could be drawn. To date, no solidly established authors have been identified in the area. The theme is recent and the vast majority of documents have been published over the last four years. European countries have been pioneering and are the most prominent in terms of publications. The electricity generation and biofuel produced from biogas have shown representativeness and are sustainable opportunities to advance the theme. Therefore, this study can contribute to encouraging the agricultural sector in implementing or increasing the use of circular economy practices.

Designing business models in circular economy: A systematic literature review and research agenda

Article

Jan 2020

The concept of circular economy is increasingly receiving attention in different domains, including strategic management, operations management, and technology management. It requires companies to design their business model (i.e., the value network, the relationships with the supply chain partners, and the value propositions towards customers) around a new concept of sustainable development that reduces consumption of natural resources and preserves the environment. However, extant research falls short in terms of explaining how companies design their business model according to the circular economy principles. Starting from this premise, the present paper provides a systematic review of the literature on the design of business models in the context of circular economy, aiming to offer an overview of the state of research and outline a promising research agenda.

Handbook of Sustainable Innovation

Book

Aug 2019

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INRAE (France) is recruiting 55 research scientists

February 2022

The National Research Institute for Agriculture, Food and Environment (INRAE) is a public research establishment with a staff of 12,000 working in 268 research, service and experimental units located in 18 research centres throughout France. INRAE is among the world leaders in agricultural and...

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INRAE is hiring 10 research scientists - Call for research projects (CRCN)

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INRAE is hiring 45 Scientists through open competitions and offering permanent positions.

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A new circular business model typology for creating value from agro-waste

February 2020 · The Science of The Total Environment

Shifting from a linear to a circular economy in the agrifood domain requires innovative business models, including reverse logistics, new visions on customer-supplier relationships, and new forms of organization and marketing strategies at the crossroads of various value chains. This research aims to identify and characterise different types of business models that create value from agricultural ... [Show full abstract] waste and by-products via cascading or closing loops. Conceptual and management insights into circular business models are still sparse. In total, 39 cases have been studied that convert agro-waste and by-products into valuable products via a circular economy approach. Semi-structured interviews and on-site visits of six representative cases have been done, and secondary data been collected. Data has been treated with content analysis. Cases are presented according to the type of organisational structure, resources, transformation processes, value propositions, key partners, customers, strategic approaches and innovation. Six types of circular business models are identified and discussed: biogas plant, upcycling entrepreneurship, environmental biorefinery, agricultural cooperative, agropark and support structure. They differ in their way of value creation and organisational form, but strongly depend on partnerships and their capacity to respond to changing external conditions. This study offers the first circular business model typology within the agricultural domain, revealing the interconnectedness of the six different business model types. It provides options for managers in positioning and adapting their business strategies. It highlights the potential of using biomass first for higher added-value products before exploiting it as energy source. Cascading biomass valorisation at a territorial level will increasingly be important for locally cooperating actors within a circular bioeconomy approach.

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February 2021 · Sustainability

Considering the large amounts of harmful waste produced in the Mediterranean olive sector, entrepreneurial initiatives creating value from olive waste and by-products via circular bio-economy approaches are reviewed. These circular business models aim to enhance the functionality use of olive trees beyond traditional patterns for value creation. The study focuses on business drivers and value ... [Show full abstract] creation mechanisms, and specifically on conversion pathways of olive waste towards new value propositions. In total, 41 cases are analyzed mainly according to the Business Model Canvas components with NVivo, based on data gathered from an extensive online search mainly of company websites and reports, online articles, research project reports, professional websites, and newsletters. Results indicate that some innovative businesses have emerged specializing in the domain of olive waste valorization, driven by environmental concerns and mainly focusing on bioenergy production. However, the overall olive biomass potential yet seems to be under-valorized. A more radical and systemic change will be needed for effective implementation of circular business models contributing to sustainable development in the Mediterranean olive sector, with adequate subsidies, common regulations, more collective actions for creating economies of scale, and marketing strategies to increase consumer awareness for bio-based products.

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This study contributes to the conceptualization of a sustainable circular business model (CBM), the application of the circular economy (CE) by companies. The study utilized a three‐level framework adapted from the CE literature with company (micro), supply chain (meso) and society (macro) levels. This multiple‐case study in the textile industry included two types of companies operating in the ... [Show full abstract] CE: companies founded on the sustainable principles of a CE (natives) and companies transitioning to a CE from the linear economy (adopters). The findings show that the adopters emphasized long‐term economic sustainability on a company level and implemented CE elements to varying degrees on all three levels. The natives pursued business decisions from environmental and social sustainability standpoints, and the three levels were integral in their systemic approach to a CE. The study highlights two key claims: established operational structures and economic volition hindered adopters in their systemic CE implementation, and an integral part of the CBM for natives was a proactive approach towards the society level.

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August 2022 · Business Strategy and the Environment

The circular economy is commonly acknowledged as a solution to ecological problems such as resource depletion and waste emissions. New economic opportunities emerge by transitioning from a linear to a circular economy and innovative business models are needed to translate these opportunities into business reality. In recent years, researchers have investigated a variety of approaches to circular ... [Show full abstract] business models, but few studies have been conducted associating internal company dynamics with sustainable circular business approaches. Consequently, the purpose of this study is to investigate the internal dynamics of young and small‐scale companies in Germany that adopt a sustainable circular business model. This study focuses on internal barriers, enablers, competences and drivers to sustainable circular business model implementation. A case‐based research design was applied, drawing on semi‐structured interviews with 12 founders of businesses and organisations with a sustainable circular business model. The study develops four strategies to overcome barriers to sustainable circular business model adoption in young and small‐scale companies: (1) human‐centeredness in all activities affected by circular business model adoption, (2) high commitment for circularity on the managerial level, (3) requirement of special skills and competences and (4) consideration of cultural aspects inside and outside the company. Further empirical research about established and international incumbents with a sustainable circular business model is needed to be able to compare the internal dynamics of big and small companies in international contexts.

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A circular economy business model innovation process for the electrical and electronic equipment sec...

July 2021 · Journal of Cleaner Production

Faced with a scarcity of materials, increasing quantities of waste, and low rate of recovery, the electrical and electronic equipment sector has become a key focus in the drive for a transition to the circular economy. An increasing body of work has addressed the integration of the circular economy at a business model level but there is a limited understanding of a sector-wide approach to ... [Show full abstract] circular economy business model innovation. Additionally, no studies have been identified that endeavoured to develop a circular economy business model innovation process for electrical and electronic manufacturers. To address this gap, this research adopted a qualitative approach via seven iterative workshops with key stakeholders in the electrical and electronic equipment sector to inform the development and refinement of a Circular Economy Business Model Innovation Process Framework. The resulting Framework, which has five-fold interconnected layers, provides electrical and electronic equipment manufacturers with a comprehensive layered process for developing and implementing a circular economy business model tailored to their business offerings. Using the manufacturer’s business strategy as a starting point, the developed Framework prompts the integration of the circular economy into business practices. Influencing factors affecting the circular economy business model innovation process are addressed by identifying the associated challenges and opportunities and related policy. Finally, the Framework proposes circularity indicators relevant to electrical and electronic equipment, helping to ensure that the proposed circular economy actions are measurable and informed.

Last Updated: 23 Aug 2023