1. New Business Models in Agriculture
Prof. Alessio Cavicchi

2. Premise and background
I’m an agricultural economist with a focus on agribusiness, consumer behavior and tourism. I teach in a degree of tourism in Macerata, a medieval town in Marche region, on the Adriatic coast of Italy. I had many ideas about my research project, but unfortunately (or luckily) I had to follow the need of my University: “make a virtue out of necessity” - stakeholders engagement in rural areas for the planning (and not real success) of place umbrella brands
University of Macerata - Marche Region: Rural Areas / Economic Crisis Several promotional initiatives under the aegis of subsidiarity principles and bottom-up approaches: Umbrella brands, Clubs of products, ...
My experience with qualitative research has been useful to serve as facilitator in a rural setting with a lot of problems during the economic crisis.
But a strong evidence of attempts to build something good and long lasting, switching from a top-down to a bottom up approach.
What you see on the right is just a part of different umbrella brands that link food and wine to tourism.

3. A new role for Higher Education Institutions? New Business Models?
HEIs: BEYOND THE THIRD MISSION
Betts and Lee (2004)
University as a trainer: university's role in proving to local economy an ample supply of skilled young graduates.
University as innovator: generation and commercialisation of academic knowledge.
University as partner: provision of technical know-how.
University as regional talent magnet: the presence of a university increases the attractiveness of the region to talented academics, entrepreneurs, engineers.
University as facilitator: facilitate networking between private and public sector.
Yet borders between society and academia are dissolving. Many high-profile universities across the world are reaching out past campus boundaries to form ambitious partnerships with industry, government and civil society organisations. In this role of ‘co-creation’, a university attempts to materialise sustainable development by working with society, to create society. That is, it collaborates with diverse social actors to trigger and then drive the sustainable transformation of a specific region, city or community.
The definition of co-creation for sustainability offered by Trencher et al (2013) is quite loose, as it needs to capture an overall tendency. In particular, co-creation for sustainability is characterized for being place-specific, involving multi-stakeholder partnerships and being able to solve real-world issues.
It cannot be specified as per activities that should be carried out, rather as per processes that are put in place and which are aimed at reaching some outcomes that have an impact on the real world.
This is why the multiple case study is the methodology that most likely is able to capture and analyze different projects/situations/processes, while deducting common features that help to better shape the co-creation for sustainability function.
The role of theory in the case study is characterized as “analytic generalization”, in order to underline the difference between this way of generalizing results and that of “statistical generalization”.
Trencher, Gregory, et al. "Beyond the third mission: Exploring the emerging university function of co-creation for sustainability." Science and Public Policy 41.2 (2014):

4. A definition of «Business Model»
A business model describes the rationale of how an organization creates,
delivers, and
captures value
in economic, social, cultural
or other contexts.
The typical answer from managers to the question “What is the purpose of your business?” is: “to make money”. Well, that is to some point right but the money comes from customers and therefore the purpose of a business is to find profitable customers. And financing your sales to your customers is only sustainable when you see the cash in your pockets in the end. That basic purpose got lost over the last years of shareholder value thinking.
Step 1: Initiation – preparing the journey To describe a business model throughout the methodology, we employ a conceptualization that consists of four central dimensions: the Who, the What, the How, and the Value Due to the reduction to four dimensions, the concept is easy to use, but at the same time, exhaustive enough to provide a clear picture of the business model architecture:
Who: Every business model serves a certain customer group. Thus, it should answer the question: “Who is the customer?”
What: The second dimension describes what is offered to the target customer, or, put differently, what the customer values. This notion is commonly referred to as the value proposition. It can be defined as a holistic view of a company's bundle of products and services that are of value to the customer.
How: To build and distribute the value proposition, a firm has to master several processes and activities. These processes and activities, along with the involved resources and capabilities, plus their orchestration in the focal firm’s internal value chain, form the third dimension.
Value: The fourth dimension explains why the business model is financially viable. In essence, it unifies aspects such as the cost structure or applied revenue mechanisms. It points to the elementary question of how to make money and capture value.
Business model definition - the magic triangle 
By answering the four associated questions and thus explicating the four dimensions, the business model of a company becomes tangible and a common ground for its re-thinking is achieved. As a rule of thumb, we consider the alteration of at least two dimensions a BMI.
Step 2: Ideation – moving into new directions Re-combining existing concepts is a powerful tool to break out of the box and generate ideas for new business models. To ease this process, we have condensed the 55 patterns of successful business models into a handy set of pattern cards. Each pattern card contains the essential information that is needed to understand the concept behind the pattern: a title, a description of the general logic, and concrete examples of companies implementing the pattern in their business model.
The way in which we apply the cards is termed pattern confrontation to describe the process of adapting the pattern to one’s own initial situation. Participants, typically divided into groups of three to five people, ask themselves how the pattern would change their business model if applied to their particular situation.
Step 3: Integration – completing the picture There is no idea that is clear enough to be immediately implemented in a company. On the contrary, promising ideas need to be gradually elaborated into full-blown business models that describe all four dimensions - Who-What-How-Value? - and also consider stakeholders, new partners, and consequences for the market. A set of checklists and tools, such as the value network methodology, are available in the St. Gallen Business Model Naviga-torTM to ease the process of quickly elaborating and explicating the business model around a promising idea.
St. Gallen Business Innovation Model

5. New challenges in Circular and Sharing Economy perspectives
Jurgilevich et al. (2016)
Feeding the world cities
More than 50 percent of the world's population currently lives in urban areas and this is expected to rise to 70 percent by 2050, particularly in developing countries. The total population of the world will amount to 9 billion around that time. World prices for food are likely to increase and be more volatile than ever before, because of increasing demand (which supply is struggling to meet) and the impact of climate change.
Crucial steps:
Increasing agricultural productivity worldwide, which means intensifying production systems and ‘precision’ farming using modern technology in a way that is sustainable and animal friendly. Europe’s contribution to worldwide food security can take different forms: from closing the yield gap in Eastern and Central Europe (which is still on pre 1990-levels) by means of knowledge transfer and financial investments, to improving cold chains in China, India and on the African continent.
Drastically reducing food losses and waste, which are especially high in urban areas. This includes measures such as improving cold chains (post-harvest losses), redistributing edible unused food and using waste as compost or to generate energy.
Bringing the production, distribution and consumption of food closer together by investing in metropolitan food systems. Integration of food into urban planning, which means bringing together the government, the private sector and the civil society, in ways that reflect the social, economic and ecological complexities of food systems.
Explore different ways to produce food, whether it is urban farming, artificial dairy, seaweeds, alternative sources of proteins, vertical horticulture, 3D food printing or other new technologies.
“Providing healthy diets for the world's growing urban population requires forging stronger links between rural producers and urban markets and building food systems that are more socially inclusive, environmentally sound and less wasteful” (Source: FAO, 15/01/2015).
Increasing agriculture productivity worldwide; Reducing food losses an waste; Bringing production, distribution and consumption closer (city-regions food systems); Exploring different ways to produce food
Using Internet of Things and the power of Big Data to fuel efficient food chains
In a July 2015 report, Roland Berger estimated the worldwide market for precision farming is as big as € 2.3 billion in 2014, with an estimated annual growth rate of 20% through The consultancy estimates the European market at € 0.4 billion and the annual growth rate at 15%.
However, the successful implementation of data-led farming will also require fundamental changes to existing farming practices, as well as the relationships between farmers, suppliers and customers. Medium and small sized companies need to develop a means to access the required technology, and will face considerable competitive pressures to do so. This will necessitate scaling up by either increasing their own operations or by becoming part of a bigger franchise (such as a co-operative), sharing data, technology and expertise. Europe has a disadvantage, because most companies lack the necessary scale and access to private equity investments, most common to the US, South America and Australia.
System integration, with cross overs between information technology, knowledge data bases (like weather forecasting, real time sales data from retailers) and agrifood companies; Access to private equity capital for investments in larger scale solutions. Cooperation between companies across the food chain to collect, store, distribute and share insights based on big data.
The customer takes control: the rise of demand-driven food systems
Traditionally, consumers make purchase decisions based on price, taste and convenience. Making use of information technology, consumers have begun to weigh a new set of factors in their purchase, shifting the power structure in the food system in a way that presents both opportunities and challenges for farmers, growers, the food and beverage industry and retailers. These new value drivers are: transparency, health & lifestyle, food safety, social impact, experience and sustainability. The industry will be measured by its ability to support healthy living in a way that is both socially and environmentally acceptable.
Food miles, Social media, Online purchasing: issues of trust and brand loyalty;
Sustainable food systems and closing the food chain in a circular economy
In a circular economy the value of products and materials is maintained for as long as possible; waste and resource use are minimised, and resources are kept within the economy when a product has reached the end of its life, to be used again and again to create further value.
Circular Economy Package and the Action Plan: impact on the food & beverage industry in areas such as waste management, packaging, recycling, tracking & tracing and the bio based economy.
Rabbinge & Linnemann (2009) “European Food Systems in a Changing World
Feeding the world cities; Demand-driven food systems; Internet of Things and the power of Big Data; Sustainable food systems and the circular economy (Lambregts – Berenschot/IFAMA, 2016)
Owyang (2014)

6. The emerging phenomenon of «City-regions food systems»
Eating City – International Platform
Sustainable Food Cities Network
Sustainable Food in Urban Communities
The proliferation of city networks around the theme of food and gastronomy is an important topic for policy-makers and scholars. National and transnational consortia have been created to enhance branding efforts and attract international visitors. Many of them consider food as a vehicle not only to promote their towns but also to follow sustainable development paths in a holistic way, proposing new and innovative governance models and supporting healthy and active lifestyles.
In a recent report written by Jennings et al. (2015) for Food and Agriculture Organisation of the United Nations (FAO) “Food in an Urbanised World”, the authors argue that while food system challenges have many global dimensions, a “city region food system” approach is reasonable to address challenges that are bound to specific places, in terms of causes, impacts, and governance. In fact, according to Jennings et al. (2015), at least three macro-categories of linkages exist between urban and rural areas: ecological, comprising ecosystem services and appropriate land-use planning; socio-economic, including shorter, more direct supply chains; and governance, bringing together urban and rural governance structures in a democratic and participatory way.
According to Jennings (2015: 5),
"a 'city region food system' provides a framework for conscious food governance that fosters improved balance between global and local food supply, with an awareness of the multiple food system outcomes for health, economic development and environmental sustainability. More broadly, the governance characteristics associated with an explicit city region food system approach are in turn likely to generate wider community benefits”.
Cittàslow – aim: to enlarge the philosophy of Slow Food to local communities and to government of towns, applying the concepts of ecogastronomy at practice of everyday life. Programme started in Italy in 1997 and now there are 190 cities in the world
Sustainable Food in Urban Communities ( ): project involving 10 European cities - The network will focus on: -GROWING fruit and vegetable in the city, in gardens, in parks, on rooftops, on balconies, on derelict lands, etc., safeguarding & improving fertility of lands -DELIVERING food stuffs in a more sustainable and less carbon intensive way. -ENJOYING more sustainable food (local products, without pesticides, seasonal and fresh products, etc.)accessible for all the population while improving diets (reducing the share of animal protein and processed foods), using products that meet environmental and sustainability criteria (certification), and preventing waste (food and its packaging)
Sustainable Food Cities Network: Promoting healthy and sustainable food to the public, 2. Tackling food poverty, diet-related ill health and access to affordable healthy food, 3. Building community food knowledge, skills, resources and projects, 4. Promoting a vibrant and diverse sustainable food economy, 5. Transforming catering and food procurement, 6. Reducing waste and the ecological footprint of the food system
Eating City is a multi-year program of activities established by the Consortium Risteco - Terre Citoyenne, co-funded by the CLM foundation for Human Progress in Paris, and locally, for each of the different editions, by other public and private institutions. The aim of the program created in 2010, is to create opportunities of international meeting, in Europe, China, USA and Africa, to elaborate several case studies in multiple dimensions (Ecadim) and a series of publications with concrete proposals useful for public and private decision makers working upstream and downstream of the food chain and also for food industry and food service operators and buyers. Each event follows the same pattern.
Creative cities Unesco: A network of creative cities, working together towards a common mission for cultural diversity and sustainable urban development.
Creative Cities – Gastronomy
UNESCO
Cittàslow International
The term city region food system has been defined as, “the complex network of actors, processes and relationships to do with food production, processing, marketing, and consumption that exist in a given geographical region that includes a more or less
concentrated urban centre and its surrounding peri-urban and rural hinterland; a regional landscape across which flows of people, goods and ecosystem services are managed.

7. “Resource-Smart Food Systems”
Sustainability is at the heart of a company’s business model. Far from being a line function devolved to CSR departments, sustainability today defines a company’s license to operate and warrants attention at the highest organizational levels. Companies that pursue short-term profits at any costs may find it difficult to compete with those that embed sustainability within the business model and recognise the substantial benefits of meeting today’s key developmental challenges.
Seen in this light, sustainability becomes a key driving force for growth, performance and compliance.

8. Typologies of new business models: ICT+Agribusiness
1. Basic Data Sales
Companies create data in their primary process, package this data into a feed and sell it in a single transaction or a subscription.
2. Product Innovation
Companies create new products or services based on the data they generate in their primary process.
3. Commodity Swap
Commodity providers offering their original products (electricity, water, telecom etc.) at a large discount or even for free but charge for services provided in combination with the commodity products.
4. Value Chain Integration
Two companies exchanging (usually sensitive business) data to integrate parts of their value chains in order to save money or optimize business performance.
5. Value Net Creation
Multiple companies sharing the same customer exchange data in a 'value network' with the aim to provide unrivalled service to the customer.
Arent Vant Spijker (2014) «The new oil. Using innovative business models to turn data into profit»
Krijn Poppe (2016) “Data Innovations in the Agri-Sector: in search of data-driven business models”

9. A practical tool: the business model canvas
The Business Model Canvas is a strategic management and lean startup template for developing new or documenting existing business models.[1][2] It is a visual chart with elements describing a firm's or product's value proposition, infrastructure, customers, and finances.[3] It assists firms in aligning their activities by illustrating potential trade-offs.

10. A practical tool: the business model canvas
Infrastructure
Key Activities: The most important activities in executing a company's value proposition. An example for Bic[clarification needed] would be creating an efficient supply chain to drive down costs.
Key Resources: The resources that are necessary to create value for the customer. They are considered an asset to a company, which are needed in order to sustain and support the business. These resources could be human, financial, physical and intellectual.
Partner Network: In order to optimize operations and reduce risks of a business model, organization usually cultivate buyer-supplier relationships so they can focus on their core activity. Complementary business alliances also can be considered through joint ventures, strategic alliances between competitors or non-competitors.
Offering
Value Propositions: The collection of products and services a business offers to meet the needs of its customers. According to Osterwalder, (2004), a company's value proposition is what distinguishes itself from its competitors. The value proposition provides value through various elements such as newness, performance, customization, "getting the job done", design, brand/status, price, cost reduction, risk reduction, accessibility, and convenience/usability.
The value propositions may be:
Quantitative – price and efficiency
Qualitative – overall customer experience and outcome
Customers
Customer Segments: To build an effective business model, a company must identify which customers it tries to serve. Various sets of customers can be segmented based on the different needs and attributes to ensure appropriate implementation of corporate strategy meets the characteristics of selected group of clients. The different types of customer segments include:
Mass Market: There is no specific segmentation for a company that follows the Mass Market element as the organization displays a wide view of potential clients. e.g. Car
Niche Market: Customer segmentation based on specialized needs and characteristics of its clients. e.g. Rolex
Segmented: A company applies additional segmentation within existing customer segment. In the segmented situation, the business may further distinguish its clients based on gender, age, and/or income.
Diversify: A business serves multiple customer segments with different needs and characteristics.
Multi-Sided Platform / Market: For a smooth day-to-day business operation, some companies will serve mutually dependent customer segment. A credit card company will provide services to credit card holders while simultaneously assisting merchants who accept those credit cards.
Channels: A company can deliver its value proposition to its targeted customers through different channels. Effective channels will distribute a company’s value proposition in ways that are fast, efficient and cost effective. An organization can reach its clients either through its own channels (store front), partner channels (major distributors), or a combination of both.
Customer Relationships: To ensure the survival and success of any businesses, companies must identify the type of relationship they want to create with their customer segments. Various forms of customer relationships include:
Personal Assistance: Assistance in a form of employee-customer interaction. Such assistance is performed either during sales, after sales, and/or both.
Dedicated Personal Assistance: The most intimate and hands on personal assistance where a sales representative is assigned to handle all the needs and questions of a special set of clients.
Self Service: The type of relationship that translates from the indirect interaction between the company and the clients. Here, an organization provides the tools needed for the customers to serve themselves easily and effectively.
Automated Services: A system similar to self-service but more personalized as it has the ability to identify individual customers and his/her preferences. An example of this would be Amazon.com making book suggestion based on the characteristics of the previous book purchased.
Communities: Creating a community allows for a direct interaction among different clients and the company. The community platform produces a scenario where knowledge can be shared and problems are solved between different clients.
Co-creation: A personal relationship is created through the customer's direct input in the final outcome of the company's products/services.
Finances
Cost Structure: This describes the most important monetary consequences while operating under different business models. A company's DOC.
Classes of Business Structures:
Cost-Driven – This business model focuses on minimizing all costs and having no frills. e.g. SouthWest
Value-Driven – Less concerned with cost, this business model focuses on creating value for their products and services. e.g. Louis Vuitton, Rolex
Characteristics of Cost Structures:
Fixed Costs – Costs are unchanged across different applications. e.g. salary, rent
Variable Costs – These costs vary depending on the amount of production of goods or services. e.g. music festivals
Economies of Scale – Costs go down as the amount of good are ordered or produced.
Economies of Scope – Costs go down due to incorporating other businesses which have a direct relation to the original product.
Revenue Streams: The way a company makes income from each customer segment. Several ways to generate a revenue stream:
Asset Sale – (the most common type) Selling ownership rights to a physical good. e.g. Wal-Mart
Usage Fee – Money generated from the use of a particular service e.g. UPS
Subscription Fees – Revenue generated by selling a continuous service. e.g. Netflix
Lending/Leasing/Renting – Giving exclusive right to an asset for a particular period of time. e.g. Leasing a Car
Licensing – Revenue generated from charging for the use of a protected intellectual property.
Brokerage Fees – Revenue generated from an intermediate service between 2 parties. e.g. Broker selling a house for commission
Advertising – Revenue generated from charging fees for product advertising.
Resources: the main inputs that your company uses to create its value proposition, service its customer segment and deliver the product to the customer.

11. Collaboration and cross-fertilisation
Multistakeholder engagement as «wicked problem»
Multi-stakeholder actions are processes “in which actors from civil society, business and governmental institutions come together in order to find a common approach to an issue that affects them all” (Roloff, 2008).
Wicked problems” refer to issues which are highly complex, have innumerable and undefined causes, and are difficult to understand and frame.
- there is broad disagreement on what ‘the problem’ is
- the search for solutions is open ended
- imply a wise stakeholders’ management
- the problem solving process is complex because constraints,
such as resources and political ramifications, are constantly
changing (Roberts, 2000)
Thus, wicked problems cannot be resolved through
finding “right answers” or “solutions”, but rather, they must be managed.

12. E-mail: alessio.cavicchi@unimc.it Skype: alessio.cavicchi
THANKS!
For further info:
Skype: alessio.cavicchi