Model 11: High-value Products from Circular Bioeconomy

This cluster is based on four very specialized enterprises working on highly innovative products, including aquaponic systems, biodegradable polymers, lignin-based products, fish sludge-based fertilizers and similar products. This type was formed by enterprises that did not fit to the more specific types specialising on plastic replacement, packaging, food and feed products. Another element that sets it apart is the higher focus on invention and system design.

Value proposition

Value offered to customers is a mix of products. The value proposition is the invention and design of novel value-added products and solutions with practical application in different industries and markets. The products and services are different, ranging from individualized aquaponic systems as well as support in operating such systems, invention of biodegradable polymers, specific flakes and granules for food industry, proteins and fibres for waste water treatment-plants, the conditioned fish sludge, lignin-based products as binding and dispersing agents for a wide range of end-market applications (construction materials, agrochemicals, batteries, etc.).

Infrastructure

The upstream key partnerships include farmers and different biomass providers, wastewater treatment plants as variety of biomass is used for diverse purposes. As the enterprises specialise in developing products and designing systems for variety of industrial partners, the cooperation with those is essential. Financial capital and services providers and public agencies regulate as well as are potential source of R&D financing. High R&D intensity makes cooperation with universities and other R&D organisations vital.

Key activities that keep the business going are quite different: consultations, design and construction of industrial systems, high level R&D activities, combined with developing explorative business model and infrastructure solutions that are covering a large part of the value chain. In addition, the generic activities include the biomass processing and production, marketing and sales and other similar activities.

The tangible key resources are biomass and processing facilities and technology. The most vital resources are the intangible ones, such as extensive knowledge and know-how with highly competent personnel, networks in key private and public bodies in home country and abroad, also market knowledge.

Keyword ratings for enterprises in High-value Products from Circular Bioeconomy Business Model type
How well does a keyword characterize a business case?

Customer interface

The enterprise established their customer relationships through co-creation based on long term strategic relationships with various stakeholders and networks. Some enterprises use personal direct sales for specific customers. The main focus was on B2B sales and customer segments targeting specific niche markets, retailers and industries. The main channels for reaching customers are enterprises’ own sales force, online presence and retailers. In some cases, the company was highly recognizable, and branding and visibility were facilitating creation of customer contacts.

Business Model Canvas for High-value Products from Circular Bioeconomy Business Model type

Financial viability

Most significant costs are related to R&D that is expensive and a highly stochastic process with high endogenous sunk costs. Other costs include costs for biomass, processing costs, equipment maintenance, personnel costs, marketing and sales. The revenues are much diversified, depending on the specific market segment and industry.

The revenue streams come from the sale of products and services, grants for R&D.

Socio-economic aspects and novelty

The companies in this type include both small, relatively specialised R&D companies as well as large- scale biochemical and food processors that create substantial number of jobs and economic activity for biomass producers in their region. In several cases, the companies do not depend on the cooperation network only for purchasing of raw materials, but the external actors play significant part in R&D process by co-creating and testing systems design, providing financing and access to markets. The R&D is aimed towards providing more environmentally sustainable solutions by reducing water pollution, and waste and fossil fuels use.

The novelty of companies is high representing both product and process innovation. Companies in this type typically produce high value-added niche products or intermediates, technology and systems design for industrial customers. As this type is presented by very knowledge intensive companies, often with considerable processing capacity and networks that make them competitive, the Business Model is not easily transferable.

This type is represented by the Business Cases of Borregaard (Case 11.1: Borregaard – production of sustainable and environmentally friendly alternatives to petrochemicals – Norway), a large-scale biochemical producer from Norway, and Emsland Group (Case 11.2: Emsland Group – sustainability through ‘using nature to create’ – Germany) from Germany that manufactures vegetable-based products for food and other industries.

Other related Business Models

Archetype of novel uses of bio-based materials for non-energy purposes includes Business Models developing innovative biomass based non-energy products and processing technologies for food, pharmaceutical, cosmetics, construction and other industries. The Business Model innovation in this archetype includes finding new ways to capture value from novel biomass, new uses of existing biomass or designing new processing systems, and related changes in other elements of the Business Model. The Business Models in this archetype rely heavily on knowledge resources and their combination with networks, and thus are not so easily transferable.

Model 8: Sustainable Bio-based Products from Plant-based Biomass

Model 10: High-value Products from Knowledge-based Processing