Managing Business Models for Achieving Sustainable Transition in the Dairy Industry: A Multi-Case Analysis from Spain

Abstract

It is largely acknowledged that the dairy industry faces momentous challenges to make progress toward major environmental goals in balance with economic and social sustainability. This study addresses this concern by examining the processes of sustainability transition in the dairy industry in Spain. In particular, we analyzed the process of shifting from the classical, purely economic-driven business models toward more sustainable business models and also integrating environmental and social concerns. We provide a conceptual model for assessing sustainability transformation in the dairy industry and test the applicability of this model using a combination of evidence from the literature and primary information. Primary data were obtained through a dedicated questionnaire addressed to four dairy companies purposefully selected as illustrative case studies. The findings suggest that sustainability goals in the dairy industry can be represented appropriately through the proposed framework both at the sector and company levels, facilitating the identification of concrete business areas better suited for potential innovations and improvements in terms of sustainable value creation and delivery. The results also reveal the need for activity-specific assessments and a more-focused approach to sustainability practices, including the development of more comprehensive sustainability metrics and measurement methods specifically tailored to the dairy industry.

1. Introduction

As in most economic activities, the pressure for agricultural and food industries to develop more sustainable business operations is intensifying, as foundational endowments of natural resources such as land and water—long taken for granted—are under growing strains [1]. At the macro level, there is internationally widespread recognition that food systems must move toward the adoption of transformative agendas for ensuring food security and nutrition while enhancing environmental protection and social fairness [2,3]. Critical challenges include a changing climate, increasing demand for food, supply chain and labor force disruptions, growing input costs, and nutrition-related public health concerns [4].

At the micro level, current business practices become insufficient for a sustainable future. Rethinking resource consumption and production conditions is more important than ever [5]. There is a growing consensus among business leaders and investors that business success today requires a commitment to sustainability. This is derived from a rising pressure on companies from different public and private stakeholders to act with integrity and in a manner that benefits wider society [6]. The underlying premise here is that integrating sustainability values into business strategy can both create impact in society and contribute to the business performance of companies. Economic benefits deriving from sustainable practices are largely prompted by more efficient practices (e.g., the reduction of waste and energy and other resource use) and innovative business models enabling sustainable value creation. Indeed, a positive return on investment (ROI) and sustainability can go in parallel, as many sustainable business practices save money, create a competitive advantage, open new markets, and attract customers and employees [7,8].

The dairy industry is no stranger to this operational framework. As can be seen in Section 2, the increasing demand for sustainable development has put the dairy industry under growing pressure to accomplish the transition towards sustainability. However, available information reveals that limited attention has been given so far to the relationship between business development and sustainability implementation in dairy companies and their supply chains. As far as is known, the joint analysis of sustainability and the business model in dairy industries and companies has been conducted by very few scholars. There is a pressing need for further research about how sustainability objectives are implemented in the dairy business operations and, more broadly, how the dairy business can make an effective contribution to addressing the sustainability challenges facing societies today.

Therefore, this study aims at contributing new insights into this topical area through analyzing the transition pathways toward more sustainable business models (SBMs) in the dairy industry. For this purpose, we combine sustainability and business model analysis in a consistent framework tailored for the dairy industry in the Spanish context. We use primary multi-case data to examine how a selection of dairy companies address sustainability-driven business model transformation. Primary data were obtained through a dedicated questionnaire addressed to four dairy companies purposefully selected as illustrative case studies. Our analysis uses an inside-out approach to business model transformation in line with Joyce and Paquin [9], which implies starting with the existing business model elements and subsequently exploring the potential changes to the model. Thus, building on the existing business model of the company and integrating survey results, new SBMs could be generated by innovating strategically in a series of variables such as materials, partners, customers, distribution channels, and the value proposition.

2. Literature Review

2.1. Review of Sustainability Concerns in the Dairy Sector

Milk and dairy products contribute decisively to the goal of accessing safe, nutritious, and sufficient food in all societies worldwide [10]. Despite the rapid growth of veganism and vegetarianism in many countries (a combined 7% of EU consumers in 2021, according to [11]), as well as flexitarianism (30% of EU consumers in 2021, according to [12]), dairy products remain essential to satisfy the nutritional requirements and food preferences of populations around the world, while providing livelihoods for millions of people in the global food system [13].

The EU is the second largest producer of dairy products in the world after India, reaching a production of 149,384 thousand tons in 2021 and representing 38% of dairy product markets worldwide [14]. The dairy sector is the second biggest agricultural sector in the EU, representing more than 12% of total agricultural production and contributing around EUR 10 billion annually to the EU trade balance [15]. The most important product of the dairy sector is milk since 14.8% of the total output of the EU’s agricultural industry in 2022 came from milk [16]. The main EU producers are Germany, France, Poland, the Netherlands, Italy, and Spain. These six countries together account for almost 70% of EU milk production [17]. Figure 1 summaries the current situation of milk production and use in the EU.

In Spain, milk is one of the main livestock productions in most regions [17]. The dairy sector plays a major role from an economic and social point of view as well as in the structuring of rural areas and the maintenance of ecosystems [13]. However, the dairy sector faces momentous challenges to making progress toward environmental goals in balance with economic profitability and social equity [15]. The dairy sector should provide security in the availability and affordability of dairy products for consumers while at the same time ensuring decent income to farmers, environmental protection, and the sustainable management of rural areas [19].

The dairy sector is affected by unforeseen weather events that limit milk production, especially grazing-based milk production. Climate change increases the probabilities of drought, floods, and disease threats, all of which affect the dairy sector in various ways, including price volatility, milk yields, and cow inventory adjustments [20]. At the same time, the dairy sector is responsible for important environmental impacts, especially in terms of greenhouse gas emissions (GHGe) associated with land use, on-farm activities (including livestock production, input manufacturing, emissions from manure), animal feed, and milk processing [21,22]. In the EU, livestock (dairy and meat) is by far the largest contributor to agricultural GHGe with about 66.6% of total emissions from agriculture in 2022 [18]. In Spain, livestock farming has been responsible for 64.8% of the agricultural sector’s total emissions in 2020. Moreover, the increasing global demand for animal products, including dairy products, will lead to higher emissions if no action is taken. Currently, these emissions vary depending on the species, with 62% attributable to cattle, 8% to buffalo, and 7% to small ruminants [23].

In dairy production, the main source of GHGe once milk leaves the farm is the use of fossil fuels, which is mainly determined by the following factors: (1) the distance and type of the transport of the milk between the farm and the processing industry and (2) the processing, packaging, and storage processes of milk products [24]. At EU level, the GHGe intensity related to milk processing and transport is estimated at 0.155 kg CO₂-eq/kg. These total emissions are distributed as follows: 55% for processing, 25% for packaging, and 20% for transportation (from the farm to industry and from the industry to distribution networks) [25].

From the EU regulation viewpoint, there are strong tensions between the different objectives assigned to agriculture, in particular those related to livestock. For instance, the policy orientation to reduce cattle herds has provoked protests from breeders whose income depends largely on aids paid by the EU Common Agricultural Policy (CAP) [26]. Specifically, it is expected that sustainability drivers such as stricter environmental policies and more attention to animal welfare will continue to shape dairy production in the future [11]. In the United Nations COP28, the central part of the final agreement recognizes the need for deep, rapid, and lasting reductions in GHGe, including non-CO₂ and concretely methane emissions, by 2030 [27]. Consequently, there is an urgent need to move toward the implementation of practices and technologies that are both efficient and sustainable, along with promoting innovation and collaboration between the dairy supply chain actors to make it more responsible and viable [13]. Technologies and practices centering on increased productivity, genetic selection, and improved animal health offer significant potential for GHGe reduction in the future [23].

From the research viewpoint, it should be highlighted that despite the increasing role of sustainability for decision-making in industries and companies, this topic is relatively recent in the dairy industry [28]. Most sustainable initiatives in this industry are isolated actions (waste treatment, electricity consumption, environmental impacts, economic issues) and do not cover the aspects of triple bottom-line together [29]. Indeed, dairy industries are concerned about the implementation of sustainable practices, but most of them lack sufficient scientific knowledge as to their applicability in an integrated manner [30].

Therefore, to overcome the challenge of building a sustainable future for the dairy sector, the simultaneous pursuit of economic, environmental, and social concerns is required to be a strategic priority for dairy companies. Dairy companies have to rethink their traditional business and consider innovations by enhancing and adapting their business models through the implementation of sustainability practices. As a representation of the underlying logic of how to run a business based on value creation and the capture of company activities, business models should be designed in an ecologically, economically, and socially beneficial way [5]. Thus, it can be hypothesized that the transition from traditional business models toward SBMs, where social and environmental values are explicitly added to economic objectives, can play a key role in bolstering dairy firms and the dairy sector as a whole.

2.2. Transforming Business Models for Sustainability: The Triple Bottom-Line Perspective

The theoretical foundation for this study is framed in the concept of a sustainable business model (SBM) as a transformative tool for sustainable value creation [31,32]. An SBM is a business model in which the concept of sustainability shapes the driving force of an organization and its decision-making so that the prevalent neoclassical model is transformed by social and environmental priorities [31,33]. According to [34], an SBM creates customer and social value by integrating social, environmental, and business activities. SBMs also aim to go beyond providing economic value to include consideration of other forms of value for a wider range of stakeholders [35]. Arguably, given the implications that milk and dairy production has in the three pillars of sustainability, it can be assumed that SBMs can contribute answers to reduce problems and improve sustainable performance in this industry, as outlined in Figure 2.

In order to fully integrate sustainability into the company’s strategy and operations, radical and systemic innovation is required. Sustainable Business Model Innovation (SBMI) is a way for companies to rethink their corporate purpose and value creation logic to improve their environmental and social sustainability. Ref. [36] proposed an SBM archetype approach, which is a grouping of mechanisms and solutions that may contribute to business model innovation for sustainability and introduce a more comprehensive view of how businesses should handle the integration of sustainability into their business models. The archetypes are (1) pollution control, (2) maximizing material and energy efficiency, (3) creating value from waste, (4) substitution with renewables and natural processes, (5) delivering functionality rather than ownership, (6) adopting a stewardship role, (7) encouraging sufficiency, (8) repurposing the business for society and the environment, and (9) developing scale-up solutions.

It is worth recalling that the classical business model canvas (BMC) developed by [37] is a tool that analyzes value creation by emphasizing only an economic perspective. Thus, a company’s pathway toward sustainability cannot be understood from the perspective of a classical BMC since the social and environmental pillars play a secondary role in this model. Only a portion of the advantages associated with a sustainable transition may be realized in the BMC due to the incomplete study of sustainability and the resulting lack of coordination across the three pillars.

Therefore, a tool with a triple bottom-line perspective is needed to expand the analysis to include all three sustainability pillars. For this purpose, the Triple-Layer Business Model Canvas (TLBMC) is a comprehensive choice to better represent both the environmental and social perspectives [9,38]. Following ref. [9], a differentiation of sustainability in business models occurs at three layers, and SBMs should undergo a three-layer relational analysis. In practice, investigating SBMs using the TLBMC approach started when the model was popularized in 2016 [9]. The concept of TLBMC was chosen because it has advantages such as providing a structured and relatively simple visual overview of the business model, and it can be used to support sustainability-oriented business model innovation. Indeed, this concept offers a sustainable approach, especially on the social and ecological aspects [39]. The consolidated approach to integrating sustainability through the TLBMC is innovative for supporting the creative discovery of sustainable business models and sustainability-oriented innovation more broadly. The TLBMC is a platform for experimenting with new business models that are focused on sustainability [40].

In the TLBMC, each layer has nine standard building blocks. Overall, the model enables a structured representation of business activities, operations, and issues, in such a way that they can be more understandable, visible, and useful for business planning and management. The model also incorporates a dynamic method of analyzing the three layers through horizontal and vertical coherence. It provides horizontal coherence within each canvas layer to examine economic, environmental, and social value individually, and it integrates vertical coherence of value creation across three canvas layers by supporting a deeper understanding of organizational value creation. The vertical coherence also can result in more creative investigations, which can support more sustainability-oriented business models. In any event, when applied in practice, the TLBMC model should be conceptually adapted to the specific context of each study case and then empirically validated with the relevant case data.

3. Materials and Methods

3.1. Empirical Design and Case Selection

This study intends to test the empirical pertinence and applicability of the TLBMC as an alternative tool for enhancing sustainable value creation schemes in the dairy industry, through uncovering business areas suited for potential innovations and improvements in terms of sustainable value creation, capture, and delivery. The analysis has been performed both at the dairy industry as a whole (meso level) and at dairy company (micro level) in Spain. We designed a multi-case study involving four dairy companies with different profiles and patterns regarding sustainability transition. This choice was chiefly motivated by the scarcity of theory and empirical evidence on how dairy companies leverage sustainability drivers and the effort they make to overcome the barriers to developing SBMs.

Relative to a single-case study, the evidence generated from a multiple-case study often is stronger and more reliable, as it is more intensely grounded in different empirical contexts [41,42]. In this type of study, a few cases are selected in their real-life context, and qualitatively analyzed according to specific protocols [43]. Case studies play a significant role, as they represent one of the most important qualitative methods used in organizational research [44].

Following the adopted approach, four Spanish dairy companies engaged in sustainability in different scales were purposefully selected for inquiry: “Central Lechera Asturiana” (CLAS), “Industrias Lacteas Asturianas” (ILAS), “Leche Gaza” (LG), and “Dairy Brands Nestlé Spain” (ND). These companies accepted our invitation and demonstrated their willingness to engage with our research by providing valuable insights through their responses to our questionnaire described in the next section. Table 1 presents an overview of the companies included in the empirical research, noting the origins, focus, and sustainability orientation on each business.

Table 1. Information on the sample companies.

	Central Lechera Asturiana (CLAS)	Industrias Lácteas Asturianas (ILAS)	Leche Gaza (LG)	Nestlé Dairy Brands (ND)
Origin	CLAS was founded in 1967. It officially began operations in 1970 with milk from dairy farms in Asturias (North of Spain). It is the largest dairy cooperative of Spain.	ILAS is the main multinational in the dairy sector with entirely Spanish capital. It was founded in 1960 and consolidated its position as a Spanish leader in milk powder and butter, and as a specialist in infant formula, and the cheese.	LG is a Spanish dairy company operational since 1966. Originally founded as an Agrarian Syndicate, the company has grown to become a leading dairy producer in the region of Castilla y León (North-West Spain).	Nestlé has a strong presence in Spain where it began operations in 1905. Initially it has been dedicated to the production of infant formula and then to condensed milk. Both products were unique in their kind at the time.
Vision	Offer high-quality dairy products while preserving their full essence and flavor; ensure 100% collection of production from associate farmers and stable milk prices in Spain.	Be a global leader in dairy production, both for products and ingredients; offer products of the highest quality at the lowest cost; anticipate the preferences of customers.	Producing highest-quality milk; ensure quality with an integrated control system; provide financial stability and a fixed monthly income to farms.	Leading company with a wide range of products, not only dairy products; continuous innovation; strong brands; nutritional solutions for health.
Sustainable orientation	B-Corp Certification. CLAS is the first Spanish-owned dairy brand to obtain this certification, which identifies companies that generate a positive impact on society and the planet.	Build successful relationships with suppliers and customers based on trust and transparency; contribute to local social and economic development.	Be a leading company in the production of high-quality dairy products while meeting the expectations of customers; ensure the well-being of employees, farmers, and the local community.	Collaborate closely with farmers, suppliers, and partners to help create a more sustainable and resilient food supply that benefits all actors in the company supply chain; creation of shared value.

Table 1. Information on the sample companies.

	Central Lechera Asturiana (CLAS)	Industrias Lácteas Asturianas (ILAS)	Leche Gaza (LG)	Nestlé Dairy Brands (ND)
Origin	CLAS was founded in 1967. It officially began operations in 1970 with milk from dairy farms in Asturias (North of Spain). It is the largest dairy cooperative of Spain.	ILAS is the main multinational in the dairy sector with entirely Spanish capital. It was founded in 1960 and consolidated its position as a Spanish leader in milk powder and butter, and as a specialist in infant formula, and the cheese.	LG is a Spanish dairy company operational since 1966. Originally founded as an Agrarian Syndicate, the company has grown to become a leading dairy producer in the region of Castilla y León (North-West Spain).	Nestlé has a strong presence in Spain where it began operations in 1905. Initially it has been dedicated to the production of infant formula and then to condensed milk. Both products were unique in their kind at the time.
Vision	Offer high-quality dairy products while preserving their full essence and flavor; ensure 100% collection of production from associate farmers and stable milk prices in Spain.	Be a global leader in dairy production, both for products and ingredients; offer products of the highest quality at the lowest cost; anticipate the preferences of customers.	Producing highest-quality milk; ensure quality with an integrated control system; provide financial stability and a fixed monthly income to farms.	Leading company with a wide range of products, not only dairy products; continuous innovation; strong brands; nutritional solutions for health.
Sustainable orientation	B-Corp Certification. CLAS is the first Spanish-owned dairy brand to obtain this certification, which identifies companies that generate a positive impact on society and the planet.	Build successful relationships with suppliers and customers based on trust and transparency; contribute to local social and economic development.	Be a leading company in the production of high-quality dairy products while meeting the expectations of customers; ensure the well-being of employees, farmers, and the local community.	Collaborate closely with farmers, suppliers, and partners to help create a more sustainable and resilient food supply that benefits all actors in the company supply chain; creation of shared value.

3.2. Data Gathering and Data Analysis

We gathered relevant data from secondary and primary sources to analyze the sustainability of the dairy industry in Spain using the triple bottom-line approach. Secondary data were collected regarding the dairy industry, and the study companies formed different sources (published scientific papers and reports in different publishing platforms, study company reports, national and international databases).

Moreover, primary data were collected during the first half of 2023 using a structured questionnaire addressed to the study companies. The questionnaire was divided into four blocks. Block 1 included the main sustainable practices applied by the company. A detailed list of sustainable practices was suggested to help respondents to answer this question. The objective of this question was to elicit the degree of commitment of the company to sustainability implementation. Block 2 was dedicated to gathering economic data, where respondents were asked about the average share that investment in sustainable practices represents in the company’s total investments and the return on investment of the sustainable practices adopted in the company. The objective of these two questions was to assess the profit or loss generated by sustainable practices implemented. Block 3 was dedicated to gathering environmental data to assess potential environmental impacts throughout the product’s life cycle, i.e., from raw material acquisition to waste management. Respondents were asked about the different inputs and outputs of the company’s production system and about the value of the different environmental impacts associated with the production of 1 kg of each of the company’s products. Finally, block 4 covered the social perspective, where companies were asked about their main stakeholders and the impact of the company–stakeholder relationship on overall sustainability.

The questionnaire was carefully developed to address the different aspects required in the study. Several preliminary versions were elaborated on to improve the design process through identifying and removing linguistic and conceptual ambiguity [45]. Subsequently, the questionnaire was sent to the companies through the National Federation for Dairy Industries (FENIL in its Spanish acronym), who in turn sent the questionnaire to a representative sample of their affiliates. This was the most efficient manner to obtain responses given the difficulty of directly contacting the companies. FENIL represents a total of 60 companies that process 95% of the milk produced in Spain. It should be pointed out that due to the challenge of obtaining responses from companies, we have provided FENIL with a short list of 10 dairy companies in Spain that are clearly engaged in sustainable development, although in different intensity and modes. To ensure a diversified representation, the selection was made purposefully [46,47,48] considering a series of criteria that included company size, position in the market, type of activities, and sustainability orientation. We obtained four valid responses, which were used to substantiate the four case studies developed in this investigation.

In the data analysis process, the primary and secondary data were summarized, consolidated, and employed to test the applicability of the TLBMC in the dairy sector and the selected dairy companies. The relevant information obtained was used to develop each component of each layer of the TLBMC model, as can be seen in Section 4.

Moreover, to strengthen the credibility of data, we used triangulation to improve the validity and consistency through the convergence of information from multiple sources [49]. Triangulation is a systematic process of sorting through the data to find common themes or categories by eliminating overlapping areas. This process is also used to control for self-presentation bias (e.g., socially desirable responses) as well as to ensure consistency between narratives and actions [48]. Triangulation contributed to create a more comprehensive picture of the research topic under scrutiny while minimizing the potential effect on findings that could emerge from the mixture of data sources [50].

4. Results

The data collected and processed have been used to build the relevant layers of the TLBMC model [9] at the two study levels (meso and micro). The analysis made at the sector level is useful as a baseline toward the development of more tailored and detailed business models at the company level.

4.1. Triple-Layer Business Model of Dairy Industry and Its Contribution to Sustainable Transition

The TLBMC developed for the Spanish dairy sector as a whole (meso-level analysis) is presented in Figure 3, Figure 4 and Figure 5. The first layer is the economic BMC (Figure 3), which represents the original business model. The main partners of the dairy sector in Spain are farmers, processors, and distributors. Also, public institutions play an important role as key partners. For instance, the Global Compact Network in Spain, which encourages companies to align strategies and operations with universal principles on human rights, labor, environment, and anti-corruption and take actions that advance societal goals. The most important key resources of the dairy sector are the dairy cattle, employees, land, and machinery. In addition to the traditional milking system, there is an automatic milking system in Spain that contributes to sustainable development; this system requires an automatic milking parlor and digital equipment. The key partners and the key resources aim to carry out the key activities of the dairy sector. Indeed, the principal activities start at the farm from feeding the cattle to the processing activities in the company to producing the value propositions. In general, the value proposition could be a healthy, nutritious, tasty, innovative, and added-value product, and it could most importantly be a sustainable product, which is considered one of the fundamental challenges for the sector. The dairy value propositions are sold in various distribution channels: 60% of dairy products are sold in supermarkets, 21.2% in discount shops, and 12.6% in hypermarkets [22]. Moreover, there are other distribution channels for dairy products that play an important role in Spain, including public food procurement, which has a potential impact on the health and well-being of the population, and contributes to enabling the environment for sustainable food systems. Also, there are alternative distribution networks that contribute to rural development. The dairy sector in Spain has a large customer segment that must have a strong relationship with the dairy producers built on trust, transparency, customer loyalty, and social and environmental engagement. The economic layer of the BMC focuses on the financial perspective of the dairy sector and how to gain profit while reducing costs. The revenue streams for this sector are fresh milk sales from farmers and collection centers, sales of dairy products, and subsidies. Meanwhile, the main cost streams are the costs of land, transportation, and energy used in addition to costs of the different activities from farm to industry.

The second canvas of the TLBMC is the environmental layer (Figure 4). It is built to create more environmental benefits from introducing sustainable practices while reducing environmental impacts. To this end, the functional value of the dairy sector has to be a sustainable dairy production system, and the production activities must be oriented toward environmental objectives, including minimizing pollution using eco-friendly packaging, reducing environmental footprint and GHGe, improving soil fertility and crop yields with dairy manure, and producing biogas to be used as renewable energy. In fact, there are numerous production activities in the dairy sector that have environmental benefits, such as managing manure, reducing energy consumption, waste recycling, and introducing renewable energy. However, the dairy sector also has environmental impacts that increase with the increasing intensity of production. The primary impact is via the pollution of groundwater with animal waste such as waste from spilled milk, animal feed, and antibiotics and also through industrial effluent production. Secondly, the impact on soil integrity is compromised due to the increased use of fertilizers and feed additives and the intensive use of waste, such as manure. In addition, the impacts of dairy farming on biodiversity are intricate, including the development of invasive herbs and the loss of grassland diversity due to increased fertilizer use, silage production, reduced grazing, and shrub encroachment. Lastly, in terms of GHGe, dairy production has only an indirect impact (mainly the use of energy for transport, processing, production of packaging, and refrigeration). The use phase focuses on the impact of customer engagement on the organization’s functional value, which should include proper product maintenance and repair and should include some consideration of the customer’s material resource and energy requirements during use. For the dairy industry, the utilization phase includes the customer’s energy requirements to prepare dairy foods and the energy used during transportation to purchase dairy products.

The third canvas of the TLBMC is the social layer, which mainly examines the relationship between dairy supply chain participants and their stakeholders from suppliers to consumers (Figure 5). The social value in this layer can be depicted through the roadmap for sustainable growth, improving the well-being of the supply chain stakeholders and the health of consumers. The employees’ component provides a space to consider the employee’s role as a core organizational stakeholder. The Spanish dairy sector’s goals are to provide health and safety measures and guarantee human rights. To achieve this, the social culture for the whole sector must be a culture of respecting human rights in the first place and also a culture of responsibility. For the dairy sector in general, social benefits may include job creation, transparency, support for farmers through direct income, increased waste awareness, and increased consumption of healthy foods. However, the dairy sector can have social impacts like potential health issues and potential displacement of the traditional farming systems.

4.2. Operationalization of SBMs Through Sustainable Practices in Study Companies

Table 2, Table 3 and Table 4 summarize the TLBMC layers developed for the four study companies following the nine-building-block structure [9]. The components are presented in a rather aggregated manner for synthetical purposes. The company case analysis provided quite rich insights grounded in diverse empirical contexts. It should be pointed out that the canvases of the model represent in each case the business areas specific to each company and consequently are not factually comparable with the other study companies.

4.2.1. Economic Sustainability

Table 2 presents economic layer components for the different study companies. This layer represents the original BMC focusing primarily on the financial perspective of the companies and how to gain profit while reducing costs.

Table 2. Micro-level economic business model: main insights from study companies.

Blocks	Central Lechera Asturiana (CLAS)	Industrias Lácteas Asturianas (ILAS)	Leche Gaza (LG)	Nestlé Dairy Brands (ND)
Key Partners	7000 farming families; 958 livestock farm members; suppliers (S); retailers; exporters (E); (NGOs); institutions (I); veterinary services.	(S); farmers (F); (E); (I); wholesalers (W); retailers (R).	(F); (S); (W) and traders; (R); (I)	(F); (S); NGO (Red Cross); (I); distributors.
Key Activities	Collection of milk (CM); milk transportation (MT); dairy processing (DP); research and development (RD); waste management; marketing (M); management (MG); packaging (P); logistics (L).	(MT); (DP); (RD); (MG); (P); (L); (M).	(RD); (DP); (P); (MG); (M); (L).	(CM); (DP); (RD); (MG); (L); (M).
Key Resources	44,358 cows; automatic milking; employees (E); transport vehicles (TV); electricity (EL); water (W); fuel (F); land (L); processing machines (PM); packaging (P).	747(E); (TV)/milk tank cars; (EL); (W); (F); (L); (PM); (P).	80 dairy farms; (E); (TV); (EL); (W); (F); (L); (PM); (P).	(E); (PM); (P); (W); (TV); brand reputation.
Value Proposition	100% products with natural ingredients; products with no added sugars; lactose-free products (LF); products with natural functionality; healthy and balanced recipes.	Infant formula and baby food; products with designation of origin (DO); goats’ milk products; (LF); traditional products.	(LF); calcium-enriched milk; wide range of products (shakes, creams, mini bricks); sheep milk; products with (DO).	Natural and (LF); reduced fat products; vegan products; services (recipes, online store, nutrition education programs).
Customer Segments	Families (F); Consumers interested in specific diets, innovative products, healthy products, and sustainable products.	Infants; (F); full-range of consumer segments (high and low purchasing power); hospitality sector.	General consumers; small and medium-sized businesses; government agencies.	(F); health-conscious consumers; consumers who value convenience and portability; athletes.
Customer Relationship	Trust (TR); transparency (T); customer loyalty (CL); social and environmental engagement.	(TR); honesty; openness; (T); customer service; brand reputation.	Personalized service; timely delivery; regular communication with customers.	(CL); (T); ethical behavior; social responsibility.
Channels	Supermarkets (S); hypermarket (H); traditional stores (TS); e-commerce (EC); horeca (HR); export (E)	(HR); (S); (H); (EC); (E); (TS)	Gaza online store; (S); (H); (TS); (EC)	Nestlé online store; (EC); (S); (H); (HR); (E); (TS).
Cost streams	Fixed costs including labor costs, land costs, capital costs, and depreciation of a fixed costs (FC); variable costs including supplies, processing, research and development, marketing (VC); other operating costs (OC).	(FC); (VC); (OC).	(FC); (VC); (OC).	(FC); (VC); (OC).
Revenue streams	Net turnover (825 million euros); other operating revenues; subsidies (S).	Product sales (PS); export sales; (OS); (S).	(PS); (OS).	(PS); (OS).

Note: In each block, in order to avoid reiterations, when the same indicator is identified in more than one company, it is named fully once and then mentioned by its corresponding abbreviation in the following columns where it is relevant.

Table 2. Micro-level economic business model: main insights from study companies.

Blocks	Central Lechera Asturiana (CLAS)	Industrias Lácteas Asturianas (ILAS)	Leche Gaza (LG)	Nestlé Dairy Brands (ND)
Key Partners	7000 farming families; 958 livestock farm members; suppliers (S); retailers; exporters (E); (NGOs); institutions (I); veterinary services.	(S); farmers (F); (E); (I); wholesalers (W); retailers (R).	(F); (S); (W) and traders; (R); (I)	(F); (S); NGO (Red Cross); (I); distributors.
Key Activities	Collection of milk (CM); milk transportation (MT); dairy processing (DP); research and development (RD); waste management; marketing (M); management (MG); packaging (P); logistics (L).	(MT); (DP); (RD); (MG); (P); (L); (M).	(RD); (DP); (P); (MG); (M); (L).	(CM); (DP); (RD); (MG); (L); (M).
Key Resources	44,358 cows; automatic milking; employees (E); transport vehicles (TV); electricity (EL); water (W); fuel (F); land (L); processing machines (PM); packaging (P).	747(E); (TV)/milk tank cars; (EL); (W); (F); (L); (PM); (P).	80 dairy farms; (E); (TV); (EL); (W); (F); (L); (PM); (P).	(E); (PM); (P); (W); (TV); brand reputation.
Value Proposition	100% products with natural ingredients; products with no added sugars; lactose-free products (LF); products with natural functionality; healthy and balanced recipes.	Infant formula and baby food; products with designation of origin (DO); goats’ milk products; (LF); traditional products.	(LF); calcium-enriched milk; wide range of products (shakes, creams, mini bricks); sheep milk; products with (DO).	Natural and (LF); reduced fat products; vegan products; services (recipes, online store, nutrition education programs).
Customer Segments	Families (F); Consumers interested in specific diets, innovative products, healthy products, and sustainable products.	Infants; (F); full-range of consumer segments (high and low purchasing power); hospitality sector.	General consumers; small and medium-sized businesses; government agencies.	(F); health-conscious consumers; consumers who value convenience and portability; athletes.
Customer Relationship	Trust (TR); transparency (T); customer loyalty (CL); social and environmental engagement.	(TR); honesty; openness; (T); customer service; brand reputation.	Personalized service; timely delivery; regular communication with customers.	(CL); (T); ethical behavior; social responsibility.
Channels	Supermarkets (S); hypermarket (H); traditional stores (TS); e-commerce (EC); horeca (HR); export (E)	(HR); (S); (H); (EC); (E); (TS)	Gaza online store; (S); (H); (TS); (EC)	Nestlé online store; (EC); (S); (H); (HR); (E); (TS).
Cost streams	Fixed costs including labor costs, land costs, capital costs, and depreciation of a fixed costs (FC); variable costs including supplies, processing, research and development, marketing (VC); other operating costs (OC).	(FC); (VC); (OC).	(FC); (VC); (OC).	(FC); (VC); (OC).
Revenue streams	Net turnover (825 million euros); other operating revenues; subsidies (S).	Product sales (PS); export sales; (OS); (S).	(PS); (OS).	(PS); (OS).

Note: In each block, in order to avoid reiterations, when the same indicator is identified in more than one company, it is named fully once and then mentioned by its corresponding abbreviation in the following columns where it is relevant.

In case of the CLAS company, the value proposition is based on producing products totally with natural ingredients, no artificial additives, and no added sugars. Also, it offers a complete range of lactose-free products for people with lactose intolerance or with digestive problems associated with dairy consumption. The company promotes healthy lifestyle habits by offering a range of products with natural functionality. CLAS carries out its activities through its structure and its subsidiaries, thus the key activities of the company start from collecting milk from farmers until the processing and marketing of its range of products. To create and deliver value propositions for customers, the company holds 44,358 cows, automatic milking parlors, dairy processing machines, and a milk tank car and other vehicles for transportation. The key partners of CLAS are seven thousand farming families, 958 livestock farm members, input suppliers, exporters, and veterinary services. Moreover, the company has a partnership with non-governmental organizations, such as food banks. The customer segments of the company are heterogeneous, and the company is working to reach customers interested in healthy, innovative, and sustainable products; customers interested in specific diets; and also families and children. The company is working to build a solid relationship with its customers based on trust, transparency, and customer loyalty. The company delivers its value proposition to customer segments through hypermarkets, supermarkets, traditional grocery stores, the HORECA channel, e-commerce on the national scale, and export networks on the international scale. The sources of revenue of the company come from net sales amounting 825 million euros (811 million euros from product sales and 14 million euros from provision of services). The costs of CLAS are composed of fixed costs including wages and salaries (46 million euros), security charges (15 million euros), and variable costs, including supplies (552 million euros). In addition, there are other operating costs (187 million euros), including external services, losses, the deterioration and variation of provisions for commercial operations, and other current management expenses. Also, there are the costs of depreciation of fixed assets.

The ILAS company also has a wide range of value propositions. One of its purposes is to produce premium-quality dairy products, which are crafted from locally sourced milk. In addition, it capitalizes on its heritage as a traditional dairy company to provide authentic and traditional dairy products that cater to consumers who appreciate regional and cultural attributes of food products. Moreover, ILAS is investing in research and development to develop new dairy products and improve existing ones to provide customers with innovative and unique dairy choices, such as lactose-free products. The company has also products with a designation of origin. To create and deliver value propositions for customers, the company has various resources, including advanced technology and machinery, employees, transport vehicles, energy, and other raw materials. The main partners of the company are the local farmers, suppliers, a network of wholesalers and retailers, exporters, and the public institutions. The customer segments of ILAS are quite heterogeneous, including different consumer profiles, the hospitality sector, families, and infants. The goal of the company is to maintain a good relationship with its customers and a good brand reputation through marketing and communication. The company sources of revenues are the sale of its dairy products nationally and internationally, online sales, and public subsidies. The costs of the company are divided into fixed costs including items such as labor costs, land, and other capital costs, and variable costs such as supplies, processing, marketing, and research and development.

In LG, the value propositions are quality products and services for consumers through recipes and the online store of the company. The main activities of LG are producing varieties of milk, investing in packaging and design, and maintaining strict quality control. The company possesses a range of resources, such as dairy processing machinery, energy, employees, and vehicles. The main partners of the company are farmers, suppliers, wholesalers, traders, retailers, and public institutions. LG serves a heterogeneous customer base, including small- and medium-sized businesses, large enterprises, government agencies, and individuals. For the distribution channels, the company distributes its dairy products through a network of wholesalers and retailers and through e-commerce. As for the viability area, the company revenues derive from the sale of its products. The costs are divided into fixed costs, including labor costs, land, and other capital costs, and variable costs, such as supplies, processing, marketing, and research and development.

As for ND, it offers several value propositions to its customers based on a wide range of high-quality dairy products. The company is committed to using only the fresh ingredients and ensuring that its products are obtained in an environmentally friendly manner. Secondly, ND is constantly innovating and developing new products that meet the changing needs and preferences of its customers. This includes the development of new products, formats, and packaging options. Additionally, the company places a strong emphasis on social responsibility, seeking to create long-term value for its stakeholders and contributing to the well-being of the communities in which it operates. The company engages in several key activities to create and deliver value propositions for customers. Indeed, the company sources its milk and other dairy ingredients from local farmers and suppliers, ensuring that they meet strict quality and sustainability standards. The milk is then transported to Nestle’s processing facilities, where it is processed into various dairy products. The company also engages in extensive research and development to create new products that meet the changing needs and preferences of its customers. The dairy brands of the company target a diverse range of customer segments who have different needs and preferences, including families with young children, health-conscious consumers who prioritize healthy eating habits and nutritious dairy products, and athletes and fitness enthusiasts who require high-protein and nutrient-rich dairy products. Busy consumers who value convenience and portability also are a key segment, as they often purchase on-the-go dairy products. The company places a strong emphasis on building and maintaining customer relationships that are based on trust, loyalty, and ethical behavior. The company revenues derive from product sales, while its costs include fixed costs (labor costs, land, other capital costs, transportation, water, electricity) and variable costs (supplies, processing, research and development, marketing).

4.2.2. Environmental Sustainability

The environmental TLBMC layer is presented in Table 3. This layer is built with the aim of illustrating the environmental value system associated with introducing sustainable practices.

Table 3. Micro-level environmental business model: main insights from study companies.

Blocks	Central Lechera Asturiana (CLAS)	Industrias Lácteas Asturianas (ILAS)	Leche Gaza (LG)	Nestlé Dairy Brands (ND)
Supplies and outsourcing	Farmers (F); employees (E); water (W); energy (EG)	(F); (E); (W); (EG).	(F); (E); (W); (EG).	(F); (E); (W); (EG).
Production	Use of renewable energy (RE); calculation of carbon footprint; reduction of water consumption (WC); management of manure (production of biogas); study of soil health; energy savings; vehicle emissions testing.	Reduction of energy consumption (EC); (RE); (WC); waste reduction (WR); sustainable farming; waste recycling; use of sustainable packaging (SP)	Working with Kyoto Protocol regulations; (RE); (WC); (EC); (WR); work with sustainable suppliers; circular economy (CE); (SP); diversity of dairy production systems (DS)	(EC); (RE); (WC); (WR); (CE); (SP); (DS); support for organic milk production; sustainability academy.
Materials	Photovoltaic panels; 40 vehicles tanker with electronic equipment; Letter Q; GPS located on herds.	Digital technologies (DT).	(DT); sustainable packaging.	(DT); cleaner technologies; Nestlé Environmental Management System (NEMS); product Life Cycle Assessment.
Functional value	Sustainable dairy production systems (SDP).	(SDP).	(SDP).	(SDP).
Distribution	Truck (T); car milk tank (CM).	(T); (CM).	Camions; (CM).	Rail transportation; efficient routing and scheduling; collaborative logistics.
Use phase	Energy (electricity, gas, fuel) (E).	(E).	(E).	(E).
End of life	Organic waste recycling.	Packaging recycling (PR) (100% recyclable).	(PR).	(PR); product recycling.
Environme-ntal impacts	Water pollution.	CO2 emissions.	CO2 emissions.	GHGe; pollution.
Environmental benefits	Biodiversity and sustainable fertilization; zero carbon footprint.	Preservation of biodiversity; reduction of pollution (eco-friendly packaging, transforming waste into new resources).	Biodiversity preservation; reduction of pollution (eco-friendly packaging, transforming waste into new resources); CO2 footprint reduction.	Reduction of GHGe; biodiversity preservation; reduction of pollution.

Note: In each block, in order to avoid reiterations, when the same indicator is identified in more than one company, it is named fully once and then mentioned by its corresponding abbreviation in the following columns where it is relevant.

Table 3. Micro-level environmental business model: main insights from study companies.

Blocks	Central Lechera Asturiana (CLAS)	Industrias Lácteas Asturianas (ILAS)	Leche Gaza (LG)	Nestlé Dairy Brands (ND)
Supplies and outsourcing	Farmers (F); employees (E); water (W); energy (EG)	(F); (E); (W); (EG).	(F); (E); (W); (EG).	(F); (E); (W); (EG).
Production	Use of renewable energy (RE); calculation of carbon footprint; reduction of water consumption (WC); management of manure (production of biogas); study of soil health; energy savings; vehicle emissions testing.	Reduction of energy consumption (EC); (RE); (WC); waste reduction (WR); sustainable farming; waste recycling; use of sustainable packaging (SP)	Working with Kyoto Protocol regulations; (RE); (WC); (EC); (WR); work with sustainable suppliers; circular economy (CE); (SP); diversity of dairy production systems (DS)	(EC); (RE); (WC); (WR); (CE); (SP); (DS); support for organic milk production; sustainability academy.
Materials	Photovoltaic panels; 40 vehicles tanker with electronic equipment; Letter Q; GPS located on herds.	Digital technologies (DT).	(DT); sustainable packaging.	(DT); cleaner technologies; Nestlé Environmental Management System (NEMS); product Life Cycle Assessment.
Functional value	Sustainable dairy production systems (SDP).	(SDP).	(SDP).	(SDP).
Distribution	Truck (T); car milk tank (CM).	(T); (CM).	Camions; (CM).	Rail transportation; efficient routing and scheduling; collaborative logistics.
Use phase	Energy (electricity, gas, fuel) (E).	(E).	(E).	(E).
End of life	Organic waste recycling.	Packaging recycling (PR) (100% recyclable).	(PR).	(PR); product recycling.
Environme-ntal impacts	Water pollution.	CO2 emissions.	CO2 emissions.	GHGe; pollution.
Environmental benefits	Biodiversity and sustainable fertilization; zero carbon footprint.	Preservation of biodiversity; reduction of pollution (eco-friendly packaging, transforming waste into new resources).	Biodiversity preservation; reduction of pollution (eco-friendly packaging, transforming waste into new resources); CO2 footprint reduction.	Reduction of GHGe; biodiversity preservation; reduction of pollution.

Note: In each block, in order to avoid reiterations, when the same indicator is identified in more than one company, it is named fully once and then mentioned by its corresponding abbreviation in the following columns where it is relevant.

In the environmental layer of CLAS, the functional value is a sustainable production system. For the production component, the company has intensified its work to reinforce its environmental sustainability strategy and to apply the progress made through different projects on its farms and industries. The company aims at reducing energy consumption, introducing renewable energy in farms, and reducing fuels and CO₂ emissions by optimizing milk collection routes. As a result, 75% of the energy consumed by CLAS farms is from a renewable origin, and the aim is reaching 100% at the end of 2025. CLAS has signed agreements with energy companies to provide innovative photovoltaic solutions to 1100 family farms to promote overall sustainability and energy savings. Moreover, in four years, CLAS has decreased its water-use ratio by 10% while co-generating 99% of the power used by its plants and offices. The company has doubled the use of natural gas lorries and implemented super tracks to optimize trips, reducing CO₂ emissions by 20%. It also has recovered 95% of its waste to be the first dairy company in Spain to have a Zero Waste certificate. In addition, the company started performing studies of the soil health of the farms, calculating the carbon footprint, and carrying out a project of producing biogas by managing the manure. To achieve the functional value, CLAS uses a specific material for sustainable environmental practices, including photovoltaic panels, renewable energy, vehicle tankers equipped with electronic measurement, GPS located on herds, and software for management and control of milk collection. CLAS has environmental benefits, such as preserving biodiversity and sustainable fertilization and contributing to a zero-carbon footprint. Nevertheless, the company has environmental impacts such as water pollution.

Similarly, in ILAS, the functional value is a sustainable production system. The company has implemented several practices to reduce its environmental impact and promote sustainability by using renewable energy. The company has implemented a biomass boiler that uses wood pellets as fuel, reducing their dependence on fossil fuels and reducing GHGe. In addition, ILAS has adopted sustainable packaging materials, such as biodegradable and recyclable materials and has implemented waste reduction measures, reducing waste generation and promoting a circular economy. Moreover, the company has implemented water-saving measures, reducing its water consumption and promoting water conservation. ILAS also works with farmers who use sustainable farming practices, such as reducing chemical use, promoting biodiversity, and protecting natural habitats. To apply all the sustainable practices, the company has invested in digital technologies to improve the flexibility, efficiency, and sustainability of its value chain. However, despite all the efforts established by the company to promote sustainability, it does not have a future strategy to achieve net-zero carbon emissions.

In LG, the functional value is a sustainable production system. The company has adopted several measures to minimize its environmental impact and advance sustainable practices by working with sustainable suppliers, transforming waste into new resources, using renewable energy, and using more sustainable packaging. In addition, all of LG’s farms comply with the environmental regulations established by the Kyoto Protocol. The company is also working to reduce its consumption of energy, water, and chemicals. Moreover, the company supports the diversity of dairy production systems and the preservation of biodiversity. To apply all the sustainable practices, the company has invested in digital technologies and sustainable packaging. The company has environmental benefits such as preserving biodiversity and natural resources and reducing pollution through the circular economy. However, it still has environmental impacts, including CO₂ emissions and a lack of a strategy to achieve net-zero carbon emissions at a future date.

In ND, the functional value is a sustainable production system preserving the environment. The company has launched its sustainability academy with a series of educational sessions that focus on different environmental topics with the aim of raising awareness and making understandable key concepts related to climate change, recycling and packaging, the sustainable use of natural resources, and regenerative agriculture. In addition, the company is implementing effective processes throughout the entire supply chain, ranging from sourcing of raw materials and packaging material to manufacturing processes and physical distribution of products. Nestle Continuous Excellence (NCE) is based on the principles of “Lean Thinking”, which seeks to optimize activities with added value, reducing those that do not have it and eliminating everything that is not necessary. NCE includes all environmental aspects derived from Nestlé’s direct and indirect activities, especially those related to water and energy. To achieve its sustainability goals, the company also invests in digital and cleaner technologies and in establishing various tools and processes to ensure that its environmental policy is effectively implemented in its day-to-day operations. One such tool is the Nestle Environmental Management System (NEMS), which serves as a framework for managing the company’s environmental impact. Additionally, ND has implemented an Integrated Management System (IMS) that allows for the effective management of quality, safety, and environmental performance across all its operations. Another critical process is the conducting of Product Life Cycle Assessments (LCA) to identify and address potential environmental impacts throughout the entire product lifecycle. ND has implemented several environmental practices to reduce the environmental impact of its transportation activities. Whenever possible, the company uses rail transportation to move products from manufacturing plants to distribution centers, which is considered a more environmentally friendly transportation mode compared to road transportation, as it produces fewer GHGe per unit of cargo transported. Moreover, ND uses advanced logistics software to optimize its transportation routes and schedules, which helps to reduce the number of miles driven and minimize fuel consumption. Furthermore, the company has been gradually introducing electric and hybrid vehicles to its transportation fleet, including those used to transport its dairy products.

4.2.3. Social Sustainability

The social BMC is presented in Table 4. It links directly to social value and examines the relationship between companies and their and stakeholders from suppliers to consumers.

To create social value, CLAS has been developing a set of agricultural services for more than 20 years aimed at the comprehensive improvement of its member farms. The company provides support for farmers and stockbreeders with the latest technological innovations. CLAS has also offered to all the partners and employees the possibility of obtaining study grants for their children to support them in financing their education. In addition, the company is working on the renovation of its communication services through its website and magazine in order to improve transparency. CLAS is working to build strong and lasting relationships with its partners and employees through co-participation in decision-making, talent promotion, and employee satisfaction and motivation. The social benefits of the CLAS group are the improvement of people’s health and quality, the improvement of partners’ and employees’ well-being, and job creation. However, despite the company’s efforts to prioritize social sustainability, there are still social impacts, such as health impacts.

Table 4. Micro-level social business model: main insights from study companies.

Blocks	Central Lechera Asturiana (CLAS)	Industrias Lácteas Asturianas (ILAS)	Leche Gaza (LG)	Nestlé Dairy Brands (ND)
Local communities	Local farmers (LF); regional university; local organizations and foundations; regional research center.	(LF); regional public institutions (RI).	(LF); (RI); rural community.	(LF); local stakeholders; consumer organizations
Governance	Vertical integration (VI); transparent communication.	Working with supplier portal.	Traceability; (VI).	Transparency in decision-making; (VI); multinational scope and management.
Employees	Talent promotion; employee satisfaction and motivation.; co-participation in decision-making.	Interpersonal relations between suppliers, clients and employees; equal opportunities for employees (EO)	(EO)	(EO); human rights guarantee.
Social value	Agricultural services for partner farms; scholarships for children of partners/employees; awards for partners; communication services (magazine, website); support for farmers and stockbreeders; social networks for SOS Children’s Villages.	Income support for small farmers; youth and women employment; settlement of the population in rural areas; sponsoring cultural events; supporting local charities.	Dairy class for children and adults; income support for small farmers; support for fixing the population in rural areas; encourage women employment.	Income support for small farmers; youth and women employment; support for the maintenance of the population in rural areas; food donations and disaster relief efforts.
Social culture	Employment (E); culture of respecting human rights (HR); culture of responsibility (CR).	(HR); (E); (CR).	Culture of equality (CE); (E).	Health and wellness; diversity and inclusion; innovation; community involvement;(CE); (E).
Scale of outreach	Strengthen relationships with partners; deep and diversified relationships with employees.	Strengthen relationships with employees, partners, and customers (RPC).	(RPC); customer outreach via social media.	Strong, long-term relationships with all stakeholders
End-User	Tasty (T); fresh (F); sustainable (S); natural (N); innovative (I); healthy (H).	(T); (I); (H); (F); (S).	(T); (I); (H); (F); (S).	(T); (I); (H); (F); (S); (N).
Social impacts	Potential health concerns (e.g., high cholesterol levels, obesity) (HC).	(HC).	(HC).	(HC).
Social benefits	Job creation (JC); improvement of livelihoods; improvement of people’s health and quality of life (HL); transparency.	(JC); improvement of farmers’ well-being; improvement of food safety.	(JC); guaranteed fixed monthly income for hundreds of families; (HL).	(JC); economic development of local communities; (HL); community engagement.

Note: In each block, in order to avoid reiterations, when the same indicator is identified in more than one company, it is named fully once and then mentioned by its corresponding abbreviation in the following columns where it is relevant.

Table 4. Micro-level social business model: main insights from study companies.

Blocks	Central Lechera Asturiana (CLAS)	Industrias Lácteas Asturianas (ILAS)	Leche Gaza (LG)	Nestlé Dairy Brands (ND)
Local communities	Local farmers (LF); regional university; local organizations and foundations; regional research center.	(LF); regional public institutions (RI).	(LF); (RI); rural community.	(LF); local stakeholders; consumer organizations
Governance	Vertical integration (VI); transparent communication.	Working with supplier portal.	Traceability; (VI).	Transparency in decision-making; (VI); multinational scope and management.
Employees	Talent promotion; employee satisfaction and motivation.; co-participation in decision-making.	Interpersonal relations between suppliers, clients and employees; equal opportunities for employees (EO)	(EO)	(EO); human rights guarantee.
Social value	Agricultural services for partner farms; scholarships for children of partners/employees; awards for partners; communication services (magazine, website); support for farmers and stockbreeders; social networks for SOS Children’s Villages.	Income support for small farmers; youth and women employment; settlement of the population in rural areas; sponsoring cultural events; supporting local charities.	Dairy class for children and adults; income support for small farmers; support for fixing the population in rural areas; encourage women employment.	Income support for small farmers; youth and women employment; support for the maintenance of the population in rural areas; food donations and disaster relief efforts.
Social culture	Employment (E); culture of respecting human rights (HR); culture of responsibility (CR).	(HR); (E); (CR).	Culture of equality (CE); (E).	Health and wellness; diversity and inclusion; innovation; community involvement;(CE); (E).
Scale of outreach	Strengthen relationships with partners; deep and diversified relationships with employees.	Strengthen relationships with employees, partners, and customers (RPC).	(RPC); customer outreach via social media.	Strong, long-term relationships with all stakeholders
End-User	Tasty (T); fresh (F); sustainable (S); natural (N); innovative (I); healthy (H).	(T); (I); (H); (F); (S).	(T); (I); (H); (F); (S).	(T); (I); (H); (F); (S); (N).
Social impacts	Potential health concerns (e.g., high cholesterol levels, obesity) (HC).	(HC).	(HC).	(HC).
Social benefits	Job creation (JC); improvement of livelihoods; improvement of people’s health and quality of life (HL); transparency.	(JC); improvement of farmers’ well-being; improvement of food safety.	(JC); guaranteed fixed monthly income for hundreds of families; (HL).	(JC); economic development of local communities; (HL); community engagement.

Note: In each block, in order to avoid reiterations, when the same indicator is identified in more than one company, it is named fully once and then mentioned by its corresponding abbreviation in the following columns where it is relevant.

ILAS has been developing a set of social practices aiming to create social value, such as providing income support for small farmers to ensure a stable and sustainable supply of milk, creating jobs for youth and women, and supporting the settlement of the population in rural areas. In addition, ILAS is involved in various social initiatives, such as supporting local charities and sponsoring cultural events that contribute to the development and well-being of the local community. It also contributes to improving the well-being of farmers, which supports the agricultural sector in the producing region. Moreover, ILAS improves food safety through the implementation of new facilities to obtain new products, co-financed by the Spanish Ministry of Agriculture, Fisheries and Food, and the European Agricultural Fund for Rural Development. The company builds strong relationships with its stakeholders by focusing on quality, sustainability, social responsibility, and community engagement. Like other dairy companies, ILAS may have a social impact associated with its operations as well as with excessive consumption of dairy products, which can be detrimental to health.

To create social value, LG has been developing a set of services for its customers and employees, including supporting children and families for their nutritional needs in a balanced diet, and giving dairy classes for children and adults about the sustainability in the dairy sector. It also provides income support for small farmers, aimed at supporting population maintenance in rural areas. Recently, LG has signed a collaboration agreement with the counselor of family and equal opportunities to promote gender equality in the business sector and facilitate the employment of rural women in its producing region. The company is working to build a strong relationship with its employees, partners, and customers. The company uses a variety of marketing and advertising channels, including social media, to reach a broad audience of potential customers. Overall, the company provides several social benefits, including job creation, the improvement of people’s health, and a guarantee of some fixed monthly income for hundreds of families.

The ND company has a strong social value proposition that revolves around supporting the community, especially children and families, in meeting their nutritional needs with a balanced diet. The company also provides income support to small farmers and creates employment opportunities for youth and women. By supporting rural populations and fixing them in their areas, the company is contributing to sustainable development and social cohesion. In addition, Nestle Spain engages in food donations and disaster relief efforts. The company also aims to build strong, long-term relationships with all the stakeholders based on mutual trust. However, the company is not immune to negative social impacts. For instance, the intensification of dairy farming may lead to environmental degradation and potential health risks for animals and humans. In addition, the company targets vulnerable populations, such as children, in its highly efficient marketing practices, which can contribute to issues such as obesity and other problematic health conditions.

5. Discussion

The main focus of this study has been to prompt more SBMs in the dairy industry that enable the shift from the purely-economic driven model towards more sustainable value creation schemes, explicitly integrating environmental and social concerns. While the topic of SBMs has been theoretically developed over the last few decades, how the theories work in practice, especially in the food industry, has been scarcely studied. Our study aimed to broaden the limited empirical knowledge and advance the developing SBM conceptualizations in this realm. This paper offers evidence for dairy companies seeking to design strategies that may enhance their sustainability uptake while contributing to expand the literature in dairy sector economics and sustainable business models in general. Based on the TLBMC as a framework for enhancing sustainable value creation schemes, we tried to provide new ideas and options for business model development and improvement. This paper is the first attempt to empirically test the TLBMC applicability in the Spanish dairy industry.

The TLBMC framework is useful for rethinking and personalizing sustainability by more practically confronting the three dimensions of sustainable development while being adaptable to company situations. Through the application of the TLBMC for the whole dairy sector, we gained insights into the industry’s economic viability, environmental impact, and social responsibility. The model provided a structured framework for evaluating each of these dimensions and allowed us to identify areas where companies could improve their sustainability performance. It was assumed that introducing sustainability in the process of business model innovation can provide entirely new ways to create and capture value [51]. SBMs are identified as key drivers for this transformation requiring the comprehensive development of the entire economic, environmental, and social aspects linked to dairy production, processing, and marketing. It is worth emphasizing that SBMs create opportunities for win–win situations in terms of greater economic profit, social justice, and environmental protection.

The application of the TLBMC in the four case studies highlights the priority areas and identifies pathways for improvement in each layer and potential areas of growth for each company. Case studies allowed researchers to gain a comprehensive understanding of the sustainability challenges and opportunities in the dairy industry from multiple perspectives and contexts. For instance, the CLAS’s approach to sustainability demonstrates that it is possible to balance economic growth with environmental and social responsibility. The TLBMC applied to CLAS reveals that the social, environmental, and economic aspects of the company are interconnected and mutually reinforcing. The company’s successes lie in its ability to operate with coherence across these layers, recognizing that each dimension contributes to the overall value creation.

In the case of ILAS, the company has shown efforts to apply sustainability in its dairy production. However, despite its size, there is a lack of published information and measures about its sustainable practices. This can be a setback for the company, as stakeholders and consumers are increasingly interested in transparency and accountability regarding sustainability issues. Additionally, the lack of clear goals to achieve net-zero emissions in the future can be seen as a missed opportunity for ILAS to take a leading role in the industry’s sustainability efforts. The ILAS case study suggests that the company focuses on sustainable practices more for reputation and marketing efforts than profitability. While this approach may enhance the company’s brand image and attract environmentally conscious consumers, it is important for the company to also ensure that sustainable practices align with long-term profitability. Striking a balance between reputation, marketing, and financial viability is essential for sustainable and successful business growth. Furthermore, ILAS can explore opportunities in organic products and natural ingredients.

LG is relatively a small company compared to other three study companies. It focuses on producing goat’s milk and other dairy products, primarily for the domestic market, while the other companies have a wider range of products and a more international presence. LG has shown a commitment to sustainability by implementing various sustainable practices. The company has recognized the importance of reducing its environmental impact and has taken steps to reduce its GHGe through energy efficiency measures, using renewable energy sources and implementing a water management program. Despite its smaller size, LG is trying to demonstrate that even small companies can make meaningful contributions to sustainability. The application of the TLBMC to LG reveals that the company places a greater emphasis on environmental practices than social ones. It is important for LG to recognize that social and environmental considerations are interconnected and mutually reinforcing. By considering the economic, environmental, and social dimensions together, the company can maximize its positive impact, achieve long-term profitability, and contribute to a more sustainable and equitable future.

For the case study of ND, the data available on the social and environmental practices are generally broad and not specific to dairy brands. For instance, Nestlé has implemented several sustainability initiatives across its operations in Spain, including supporting the maintenance of the population in rural areas and supporting children and families for their nutritional needs. In addition to these social initiatives, the company prioritizes environmental impact reduction. The company develops and implements improvement plans based on best practices and available technologies to minimize its ecological footprint. However, it is not clear how these initiatives are specifically linked to ND brands. Additionally, there is a lack of publicly available information on the working conditions of Nestle’s suppliers and farmers in Spain, which could provide insight into the social practices of the company. Despite the significant presence of Nestle Spain in the market and its extensive commitment to sustainability, our case study findings reveal that the company does not work separately by brands. The application of the TLBMC for the company in Spain highlights the need for improvement and the necessity of implementing measurements on a brand-specific base.

In line with [52,53], the study demonstrated that achieving success in sustainable practices depends on giving equal importance to the economic, environmental, and social dimensions and implementing appropriate innovations in each of these areas. The companies have to apply horizontal and vertical coherence by simultaneously considering all three layers of their business models. As a valuable framework for understanding the industry’s sustainability landscape, the TLBMC also has led to a deeper understanding of the strengths and weaknesses of the dairy sector.

6. Conclusions

This study aimed to investigate the transition toward sustainable business models in the Spanish dairy sector using the TLBMC as a novel methodological approach. Overall, the findings show that the applied framework allows for the identification of business areas especially suited for potential innovations and improvements in terms of sustainable value creation and delivery. Accordingly, diverse options are offered on how the dairy industry can benefit from integrating sustainability into business practices.

At the sector level, the analysis revealed inter alia that sustainable performance could be improved through actions such as enhancing healthy products in the value propositions and giving more focus to the HORECA and alternative food channels. Likewise, more attention to consumers sensitive to environmental and social attributes could increase sales and profit levels. Similarly, several environmental areas are suitable for potential improvements, for example, further reduction of carbon emissions, energy and water consumption, and the expansion of recycling and waste management. In addition, potential social benefits can be achieved in several areas such as working conditions, stakeholder commitment, and health and nutritional levels.

At the company level, firsthand information ensured that the findings are highly grounded in practical experiences and reflect the realities on the field, leading to unraveling the appropriate business areas for creating sustainable value. As expected, diverse attitudes towards sustainability adoption have been noted across study companies. For instance, while one company is trying to establish itself as the leading sustainable dairy company in Spain, another one implements sustainable practices mainly for reputation and marketing purposes. Another company puts stronger emphasis on environmental practices compared to social considerations. There is also a company that conceives sustainability as a quite global issue without brand-specific measurements nor a targeted sustainability approach.

However, while the application of the TLBMC framework offers valuable insights, it also presents several challenges and limitations. The model is, in general, challenging to apply due to the extremely wide range and complexity of products and operations in the dairy supply chain. Moreover, it is important to acknowledge the limitations associated with the lack of more detailed data concerning appropriate measures for sustainability characterization, especially data for the environmental and social layers. This limitation reveals the need for improved data collection systems and increased awareness of sustainability metrics within the dairy industry. By promoting awareness and developing standardized sustainability measurement methods, future research can overcome these limitations and further improve the applicability of the TLBMC framework. Also, by addressing these challenges, stakeholders can gain a more comprehensive understanding of the sustainability practices in the dairy sector, leading to informed decision-making, improved performance, and a more sustainable future for the industry. Furthermore, future studies should delve into the long-term impacts of sustainable practices in the dairy sector. Longitudinal research can assess the effectiveness and persistence of sustainability initiatives as well as identify any unintended consequences and trade-offs that may emerge over time.