After the first few years in which they supplied the ingredient to cosmetic and biomedical companies based in western Europe or North America, they became supplier of the medical and cosmetic formulations widely used in China and across the world as dermal fillers.15 In this shift (Figure 1), the “vertically integrated” company will earn the huge difference in revenues existing between active ingredients and the final functional products sold on the rich healthcare, cosmetic, nutraceutical and pharmaceutical markets.

2.3 Lean production in small, flexible plants

The key technologies that will enable economically convenient and actually highly profitable bioeconomy productions are similar to those that are eventually enabling a major shift in the global chemical industry.16 An in-depth knowledge and understanding of these technologies and their possibilities is therefore required for biobased productions to thrive. The aforementioned productions can be based on chemical synthesis, and thus rely on heterogeneously catalytic processes taking place in small, high-throughput flow reactors;17 or can be based on new, waste-free extraction routes of natural products.18
In both cases, the new continuous high-throughput productions are conducted in digitally controlled small, modular plants rather than in huge plants requiring both large capital expense and large operational costs. This, inter alia , allows to flexibly adapt productions to customer demand in various regions of the world.19Besides cutting the cost of shipping, this will end the reliance on foreign suppliers for substances that can be of vital importance for entire countries, as shown by the prolonged shortage of active pharmaceutical ingredients (APIs) not only in low-income countries but also in industrially developed countries such as the USA, European and Oceania countries.20

2.4 From suppliers to business partners

In bioeconomy productions, suppliers necessarily turn into business partners. The fact that value chains of the agri-food and industrial products converge “due to the shift to bio-based raw materials leading to a mutual dependence and triggering new material flows and food processing technologies” was identified in the early studies on technology and innovation management in the bioeconomy.21 In practice, learning that their by-products supplied at low cost are used for the production of high value substances and materials, farming, forestry or fishing companies will increase prices with the risk to undermine the economic convenience of said bioproductions.
Rather than trying to fix prices with easily broken long-term supply contracts, successful bioeconomy companies have two management options. They will either enter into partnership with their suppliers by establishing jointly owned production plants, thereby sharing revenues and profits, or they will become owners of plantations, forests or fishing companies.
Italy’s Indena, for instance, owns several hectares of olive orchard plantations in southern Italy from which it sources the olives used to produce phenolic extracts rich in hydroxytyrosol and verbascoside to be turned into valued cosmetic applications (skin protection and skin antiaging topical and oral formulations). This way, a specific olive variety was selected amid more than 300 existing varieties, while botanists chose the best harvesting period to ensure high levels of verbascoside and other biophenols.22
Relying on seasonally dependent biological resources used as raw materials, the manufacturing of biobased products requires establishing mutually beneficial relationships with the suppliers of the raw materials, which generally are agriculture, agrifood, forestry or fishing companies. Gone are the days in which plants or flowers grown by poor farmers were collected in African regions with “most of the benefits captured by the retailers”.23
The scale of biobased productions and the need to assure the quality of the biological resources supplied requires the development, often from scratch, of a complete supply chain starting from harvest, followed by appropriate handling, storage and delivery of the required biological raw materials. For example, facing a huge increase in demand and production in the last decade (2010-2020), the pectin industry could not rely any longer on slow and highly variable supply of dried lemon peel chiefly sourced from Argentina. Hence, large pectin manufacturers opted to build new production plants in Brazil next to plantations of orange, lemon and lime.24
Among other benefits, the immediate supply of waste citrus peel after fruit squeezing allowed preventing microbial spoilage of the fresh peels, which could be readily processed to extract the valued hydrocolloid.
The natural products industry, which originally supplied costly flavour and fragrance ingredients such as vanillin to the food and perfume industries, currently supplies a huge variety of ingredients to the so called “natural and organic industry”, namely a sector comprising food supplements, natural organic food and beverage, functional food and beverage, and natural living (personal care, household cleaning and pet products). In 2020, only in the USA such industry enjoyed $259 billion revenues (Figure 2) increasing at 12.7% annual growth rate.25