Circular agri-food economies: business models and practices in the potato industry

Abstract

Circular economies are an important pillar of sustainable production and consumption. This particularly applies to the agri-food industry, which is characterised by large amounts of organic waste and by-product streams posing a serious challenge for many food producers. Therefore, respective firms increasingly adopt circular economy business models (CEBMs) to manage these resource flows effectively. However, there is only little knowledge on the functioning of CEBMs in bio-based industries, especially from a socio-economic perspective. We address this gap by exploring enablers and motivations behind such business models as well as the institutional contexts they are embedded in. In methodological terms, we adopt a case study approach using the example of potato production in Lower Saxony (northwest Germany). The core of the paper is a qualitative in-depth analysis of four potato processors, adopting varying business models to valorise their by-product streams (e.g. peels, scraps, pulp) either ‘in-house’ or in partnerships with external partners. The findings show that the implementation of CEBMs results from a complex interplay of internal and external enablers, with economic considerations as the main impetus for the management of biological reverse cycles. Thereby, we found a shifting economic logic in the assessment of potato by-products from disposable waste to valuable resources for other sectors (e.g. livestock farming, bioenergy, biofuels). While being encouraged by targeted policies, the companies studied feel increasingly affected by emerging sustainability discourses, prompting them to (re)design and (re)frame their CEBMs in view of environmental and societal issues.