Moving towards circular bioeconomy: Managing olive cake supply chain through contracts

Circular bioeconomy represents a recent political vision expected to contribute in tackling the main challenges faced when sustainable industrial transition trajectories are to be implemented. Coordination and interdependence among actors are crucial steps for value creation when developing new sustainable supply chains. Current study is based on a choice experiment devised with contract design theory applied to a specific supply chain in which a circular bioeconomy strategy is implemented. It investigates the propensity of Sicilian millers to participate in a novel supply chain in which feedstuff is produced by processing a by-product, namely olive cake. Furthermore, millers contract attributes’ preferences are analysed. The results from two econometric models reveal that 71% of the interviewed entrepreneurs would participate in the proposed supply chain while the propensity to participate is positively related with firm size and millers’ attitudes but decreases if millers experienced previous investments or have previously participated in cooperatives. Moreover, respondents prefer shorter length of contract, with a minimum guarantee price, with a renegotiation option, and without the obligation of a minimum volume of product to be supplied. Contract agreements, when contract characteristics are designed ad hoc, are proved to be effective tools for circular bioeconomy supply-chain development.