182 S. Bolwig et al.
asymmetric and ‘captive’ supplier relationship with AFI (Vik & Kvam, 2017),
where the latter’s control of research- based knowledge of processes and products as well as customer relations makes it costly and risky for TINE to switch
to another buyer (ibid.). The partnership with AFI has, however, also meant
a technological upgrading of TINE in terms of an improved ability to
produce bulk commodities from whey (ibid.). It remains to be seen whether
the partnership can help TINE to further upgrade its whey- based business in
terms of learning about more advanced products and processing techniques,
or develop deeper market knowledge, and so strengthen its position in the
value chain. In this regard, Vik and Kvam (2017) observe that AFI does not
share knowledge about customers and prices with TINE to avoid losing
control over TINE as a supplier. Finally, any upgrading strategy chosen by
TINE needs to consider how to access new sources of whey raw material to
achieve scale economies, given the geographical context and the domestic
orientation of milk sourcing and sale of dairy products (see Table 9.3).
9.5.2 The sustainability of different valorisation pathways
Arla Foods has strategised on the valorisation of acid whey in a clever way.
Instead of bringing large amounts of acid whey to a central processing facility,
AFI sells a product to enable its customers to turn acid whey into a useful
product. This is, however, not the same as saying this strategy is the most sustainable one for handling acid whey. For any product or product system to be
deemed sustainable, it should at least have a better economic, social and
environmental performance than other ways to achieve the same function.
The term ‘product system’ does not only refer to the acid whey itself. For
instance, when acid whey is used for human food production instead of feed
production, one must also consider that other feed ingredients are needed to
replace acid whey.
There are likely economic gains both for AFI and the dairy companies
who buy Nutrilac
®
to valorise their acid whey. Livestock farmers, who lose a
cheap feed ingredient, will have to replace this source with a probably costlier
alternative, such as imported feed. This will of course create extra income for
the farmers producing the feed alternative and for other actors in this value
chain. This will again increase the demand for feed products with consequences for other value chains dependent on such products. Similarly, if
acid whey is originally used for biogas, alternative substrates need to be found.
Hence there are complex distributional and economic knock- on effects on
the wider food (and energy) system of changing valorisation pathways for side
streams such as acid whey, which can be important but at the same time difficult to measure.
A hypothesis in this regard is that when valorisation becomes more technically complex and costly, there is a risk that the distribution of wealth
becomes more unequal. Repercussions in the environmental dimensions will
follow similar paths to those in the social and economic dimensions, although
asymmetric and ‘captive’ supplier relationship with AFI (Vik & Kvam, 2017),
where the latter’s control of research- based knowledge of processes and products as well as customer relations makes it costly and risky for TINE to switch
to another buyer (ibid.). The partnership with AFI has, however, also meant
a technological upgrading of TINE in terms of an improved ability to
produce bulk commodities from whey (ibid.). It remains to be seen whether
the partnership can help TINE to further upgrade its whey- based business in
terms of learning about more advanced products and processing techniques,
or develop deeper market knowledge, and so strengthen its position in the
value chain. In this regard, Vik and Kvam (2017) observe that AFI does not
share knowledge about customers and prices with TINE to avoid losing
control over TINE as a supplier. Finally, any upgrading strategy chosen by
TINE needs to consider how to access new sources of whey raw material to
achieve scale economies, given the geographical context and the domestic
orientation of milk sourcing and sale of dairy products (see Table 9.3).
9.5.2 The sustainability of different valorisation pathways
Arla Foods has strategised on the valorisation of acid whey in a clever way.
Instead of bringing large amounts of acid whey to a central processing facility,
AFI sells a product to enable its customers to turn acid whey into a useful
product. This is, however, not the same as saying this strategy is the most sustainable one for handling acid whey. For any product or product system to be
deemed sustainable, it should at least have a better economic, social and
environmental performance than other ways to achieve the same function.
The term ‘product system’ does not only refer to the acid whey itself. For
instance, when acid whey is used for human food production instead of feed
production, one must also consider that other feed ingredients are needed to
replace acid whey.
There are likely economic gains both for AFI and the dairy companies
who buy Nutrilac
®
to valorise their acid whey. Livestock farmers, who lose a
cheap feed ingredient, will have to replace this source with a probably costlier
alternative, such as imported feed. This will of course create extra income for
the farmers producing the feed alternative and for other actors in this value
chain. This will again increase the demand for feed products with consequences for other value chains dependent on such products. Similarly, if
acid whey is originally used for biogas, alternative substrates need to be found.
Hence there are complex distributional and economic knock- on effects on
the wider food (and energy) system of changing valorisation pathways for side
streams such as acid whey, which can be important but at the same time difficult to measure.
A hypothesis in this regard is that when valorisation becomes more technically complex and costly, there is a risk that the distribution of wealth
becomes more unequal. Repercussions in the environmental dimensions will
follow similar paths to those in the social and economic dimensions, although