Understanding and supporting decision makers in the adoption of Circular Business Models: Lessons from Australian Cheese Manufacturers

Abstract

Reducing food loss and waste is a global challenge that requires rapid behavioural change across agri-food value chains. This thesis aims to deepen our understanding of circular business model (CBM) adoption by first exploring the current and potential levels of resource circularity within Australian agri-food chains, with a focus on the important role of the dairy sector. Second, it conducts an in-depth analysis of the incentives, barriers, and enablers to CBM adoption among firms, using the Australian cheese manufacturing sector as a relevant case study.

A mixed-methods approach was employed, including a material flow analysis of the National Food Waste Baseline, a comprehensive literature review of circular economy management practices throughout the dairy value chain, and both quantitative and qualitative analysis of semi-structured interviews with a nationally representative sample of Australian cheese manufacturers (43 interviews across 42 firms, representing 31% of the industry).

The findings show that 77% of uneaten food components in the Australian agri-food system are directed to ‘circular’ end destinations, but there is significant room for improvement. The dairy sector is well positioned for high levels of circularity based on existing management practices, yet it still contributes approximately 14.9% to Australia's food loss and waste. The cheese manufacturing sector is the largest source of this, and despite numerous options to convert the by-product ‘whey’ into high-value products, contributing to resource circularity, it remains the largest issue, costing cheese manufacturers over $500 million annually.

This problem is largely driven by failures of markets, government, and social licenses to operate to drive circular economy adoption. Barriers to CBM adoption could be addressed by promoting collaborative business models, such as joint ventures and partnerships with third parties, though these approaches come with their own challenges. However, with realistic shifts in perceptions around profit, risk, and environmental benefits, along with greater visibility of successful cases, CBM adoption could increase from 1% to 50% within 4-6 years.

Short bio: Jack Hetherington

Jack Hetherington is a researcher focused on sustainable and inclusive agri-food systems, tackling complex societal challenges through evidence-based solutions. A PhD candidate with End Food Waste Australia, CSIRO and the University of Adelaide’s Centre for Global Food and Resources (GFAR), his research explores circular economy transitions, particularly in Australian cheese manufacturing, by examining innovative business models and the challenges they face.

Jack brings international experience across agricultural value chains in Australia, Indonesia, Papua New Guinea, Fiji, and Myanmar. From 2017, he coordinated the IndoDairy project at GFAR, leading efforts to support smallholder-inclusive dairy value chains in Indonesia. This work has resulted in measurable impacts, including a 9% increase in farm productivity, a 6% increase in revenue for project beneficiaries, and expanded training access to 2,000 women farmers. Prior to this, Jack worked at the Australian Centre for International Agricultural Research (ACIAR) (2015-17), finishing as an Agribusiness Program Coordinator.

Jack has also led and contributed to several industry and community organisations, including as President of the RAID Network (2017-19), Vice President of the Ag Institute of Australia’s SA Branch (2022-23), and is active in the SA Crawford Fund Committee, and the Landcare Association of South Australia. He holds a Bachelor of Animal and Veterinary Bioscience from the University of Sydney and will complete his PhD and a Graduate Certificate in Artificial Intelligence and Machine Learning in 2024.

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