Value capturing through business model adaptations to sustainability : case studies from the primary production stage of the Swedish agri-food supply chain

Abstract: Incomplete competition in the agri-food supply chain is a concern for many weaker actors, such as farmers. This qualitative study is done to develop an understanding of how business model innovation in farm businesses changes farmers’ perceived satisfaction with supply chain value capture. Empirical data come from seven case studies of active conventional and organic grain farmers in four Swedish provinces. Inspired by grounded theory, a cross-case and constant comparative analysis is done with abductive coding using Word and Excel to achieve the results. It is found that Lantmännen, as the largest grain organization in Sweden, has been able to implement the philosophy of an agricultural cooperative by creating dynamism in the grain supply chain and providing better bargaining power for farmers to capture more value. However, the cooperative’s standard supply chain, offers better opportunities to conventional farmers than organic ones, leading organic farmers to seek alternative channels that are less centralized in bulk production. Findings also suggest that the cooperative, due to their challenging bargaining position with large retail actors, could only marginally increase the power of producers. It is shown that since farmers are not satisfied with supply chain value capture, much of their business model innovation is directed towards finding alternative sales channels.