Analyzing the current manure processing and recycling niche in the Netherlands to see how business models can help innovators in the niche succeed

Abstract

Farming has been essential for thousands of years, but recently climate change and environmental concerns began to arise, putting pressure on the agricultural industry since they are a significant contributor of nitrogen emissions, especially from livestock manure. Fortunately, there are start-ups that try to overcome the nitrogen problem by developing, producing and implementing technology that processes, recycles and extracts nutrients from livestock manure. However, although government subsidies exist to entice these firms, many still fail since they do not have a good business model and cannot capture the market. This then leads to the main research question: How is the manure processing and recycling niche in the Netherlands currently developing and how can business models help innovators in the niche succeed?

In order to answer the research question, a literature review on analytical frameworks was made, from which a framework was developed using the Multi-Level Perspective (MLP), Strategic Niche Management (SNM) and business models. The research question is then answered using this framework, desk research and semi-structured interviews. As part of the desk research, a list was made with over 100 firms in the Dutch manure processing industry, which formed the basis to select 8 interview participants from. Using data from these 8 participants, the MLP and SNM was analysed, from which patterns and links were identified. Commonalities between firms and many insights into the industry were found. Also, 5 main business models were identified over 2 general classifications: manure processors and equipment producers. Furthermore, barriers and opportunities of the niche were identified and an alternative framework and alternative business model canvas was presented for this specific niche.

The results were generally logical and clear, but it was not without its flaws. These mainly stem from this being the first paper to analyse business models for the manure processing niche, and due it being exploratory and broad in nature, meaning that sometimes the 'why' was not always fully justified. There were also relatively few interviews, further limiting how certain some of the findings are, but fortunately bias should not be significantly present. As one of the outcomes, there were quite a few recommendations for newly starting firms in the industry. The main ones being that newly starting firms should focus on a medium-large size installation capable of processing manure in a 15-20 km radius, offering a good quality product and/or service that works well, even if it may not be the newest, cheapest or most innovative method, and they should share their knowledge, collaborate and learn from each other. However, some potential areas for further research were also proposed, including investigating other types of firms in the industry, the lesser successful firms to see what not to do, markets outside the Netherlands, and also interviewing government personnel due to there being a fairly evident conflict between them and the agricultural industry. In any case, the manure processing niche looks like a promising solution to the nitrogen problem, but only time will tell where the industry will head in the future.