Qualitative insights into buyer–supplier relationship attributes in the U.S. biofuels industry

Abstract

The United States biofuels industry has experienced significant growth since its inception in the early 1990s due to concerns regarding climate change, energy security, and oil price volatility. Corn (maize) ethanol has served as an alternative to petroleum-based gasoline over the past few decades and currently accounts for nearly 90% of total U.S. renewable biofuels. In recent years, research interests have transitioned to biofuels recovered from lignocellulosic biomass due, in part, to the food-fuel controversy and the “ethanol blend” wall issue. However, the sustainable development of the U.S. lignocellulosic biofuels industry faces a variety of challenges, including feedstock costs and availability, high production and capital costs, and policy and market fluctuations. Literature suggests that buyer–supplier relationship management has the potential to solidify the supply chain and bring stability to commercialization plans. This study conducted semi-structured interviews with three lignocellulosic biofuel producers to explore relationships with their ethanol biofuel customers. Results show that refiners and blenders of gasoline were the primary customers of corn ethanol with fuel marketing companies as secondary intermediaries. Meanwhile, communication, trust, commitment, and power between participating parties were identified as important relationship attributes. To strengthen biofuel buyer–supplier relationships, this study identified manufacturing of consistent and regulated products and communication regarding logistics and environmental benefits of biofuels as key relationship management activities. This research provides business-to-business marketers of biofuels with a better understanding of relationship management and offers insights into the biofuel refinery-to-market value stream for researchers, practitioners, and policymakers.