Research shows how fermentation firms reinvent their business models

The paper advances the business model design space (BMDS) framework by explicitly integrating an ecological dimension, alongside science & technology, culture, markets & users, industry, and policy. Drawing on interviews with thirteen microbial firms, the study shows how these firms adopt both fit-and-conform and stretch-and-transform strategies in relation to these boundaries. For example, while many firms fit to market expectations by focusing on low-cost value propositions, they also stretch the ecological boundary by developing circular value delivery practices such as using industrial side-streams as feedstocks.

Importantly, the study highlights how technological and business model innovation are deeply interconnected in this emerging industry - often co-evolving rather than being separate processes.

“Business model innovation is not just a matter of internal firm strategy - it is about navigating a multi-dimensional design space where policy, markets, technology, culture, industry, and ecology intersect. Fermentation firms show how business models can both fit within existing boundaries and actively stretch them to support sustainability transitions,” says Linus Thomson, postdoc at Chalmers University of Technology.

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The findings are relevant for both researchers and practitioners interested in sustainability transitions and alternative proteins.

• For researchers, the study extends the BMDS framework by introducing the ecological dimension, offering a broader socio-techno-ecological systems perspective on business model innovation.
• For firms and entrepreneurs, the results illustrate the strategic choices between fitting into existing systems (e.g., focusing on regulatory compliance and cost-competitiveness) and stretching boundaries (e.g., experimenting with circular feedstocks, repurposing industrial infrastructure).
• For the FINEST community, the study underlines how microbial firms’ business models are not only responses to external pressures but also vehicles that can reshape transition dynamics in the food system.

The study is completed, but its insights provide a basis for both practitioners and scholars to reflect on how business models can navigate and transform boundaries in sustainability transitions.