Community-supported businesses models as microeconomic sufficiency models

Jana-Michaela Timm¹, Michaela Hausdorf^1,*

¹Faculty of Business, Economics and Social Sciences, Department of Socioeconomics, Hamburg University, Hamburg, Germany

*[email protected]

Abstract

In line with the sustainable development goals (SDGs), the idea of a 'sufficiency economy' is regarded as one of the most valuable strategies for meeting human needs within the planetary boundaries (Alexander, 2015; Niessen & Bocken, 2021). Scholars are increasingly exploring how businesses can apply sufficiency thinking and foster sustainable production and consumption (Bocken et al., 2022; Bocken & Short, 2016; Gossen & Kropfeld, 2022; Jungell-Michelsson & Heikkurinen, 2022; Niessen & Bocken, 2021). Our study aims at contributing to this discourse by directing scholarly attention to a novel phenomenon that is spreading in practice: community-supported business models (CSBMs). We argue that sufficiency is core to CSBMs (Bloemmen et al., 2015; Debucquet et al., 2020; Hausdorf & Timm, forthcoming), and thus, it is worth exploring CSBMs as new forms of business models that contribute to broader sustainability transformations (Aagaard et al., 2021; Bocken et al., 2014; Geissdoerfer et al., 2018; Lüdeke-Freund & Dembek, 2017; Stubbs & Cocklin, 2008).

Sufficiency business models, also referred to as ‘business models of enough’ (Kropfeld & Reichel, 2021), describe how ventures can propose, create, and capture value for a broad range of stakeholders beyond organisational boundaries (Niessen & Bocken, 2021; Schaltegger et al., 2016) while moderating production and avoiding rebound effects (Kropfeld & Reichel, 2021). Concrete strategies on the business model level range from the three well-known approaches of reducing, avoiding, and reusing (Price & Joseph, 2000; Bocken & Short, 2016) over more granular strategies like regionalisation, decluttering, slowing down, and de-commercialisation (Sachs, 2015; Schneidewind & Palzkill-Vorbeck, 2011). Bocken, Morales, and Lehner (2020) explored sufficiency business models in the food industry and presented a framework encompassing twelve business strategies for sufficiency. However, all these strategies seem not to change anything in the market-based operating mode of these ventures. So-called sufficiency business models still generate revenues - sometimes more and sometimes less. That means that entrepreneurs sometimes generate more profit than they need, and sometimes revenues may fall short of their needs. When we imagine accumulating all these individual ventures with their variable revenues, we come close to the picture of the Doughnut Economy (Raworth, 2017). Sometimes, businesses fall short of essentials – they fall below the social foundation of the Doughnut. And sometimes, businesses generate more profit than needed – they overshoot the ceiling. To date, research has not yet found a solution to this problem. In practice, sufficiency ventures usually reinvest or donate surpluses. In case of falling short, entrepreneurs take the risk on their own. This is where CSBMs come in.

CSBMs represent a “holistic approach […] based upon trust, cooperation and ecologically responsible behaviours” (Bloemmen et al., 2015, p. 110). These business models uniquely unite producers and consumers and enable a close relationship between both parties (Debucquet et al., 2020; Hausdorf & Timm, forthcoming). Community-supported businesses “are found and run by a single person or a team that provides access to products and services for (and to some extent with) a community of consumers. The community of consumers provides the material and immaterial resources1 needed and, in turn, receives the product or service (often on a regular basis)” (Hausdorf & Timm, forthcoming, p. 5) (see figure 1).

It is crucial to distinguish community-supported businesses from community-based businesses. In community-based businesses, a community of people jointly starts a venture that is usually fruitful for their specific region (Peredo & Chrisman, 2006; Peredo & McLean, 2013; Sinnicks, 2020). In contrast, solo entrepreneurs or teams set up CSBMs for (and partly with) a community of people. Moreover, we can differentiate community-supported businesses from cooperatives. While a cooperative's members jointly own and run their venture, CSBMs' members usually do not own the organisation but receive the products and services provided by the producer (Bacq et al., 2020; Davila & Molina, 2017). Nevertheless, cooperatives are often suitable as legal forms for CSBMs (Hausdorf & Timm, forthcoming).

Community-supported businesses increasingly attract scholarly attention as environmentally, socially, and economically sustainable ventures (Hausdorf & Timm, forthcoming). In this essay, we argue that CSBMs have even more to offer than just being particularly sustainable: They represent an ideal type of a concrete and already existing sufficiency business model that enables ventures to operate within the safe space between the social foundation and the ecological ceiling (Raworth, 2017). Three principles build the foundation of CSBMs as sufficiency business models: (1) direct instead of indirect relationships enable CSBMs to negotiate production quantity, quality and wages in order to avoid overproduction and to eliminate the need for the producer to sell more products during good times in order to prepare for hard times (Bloemmen et al., 2015). (2) Needs-orientation instead of growth orientation enables CSBMs to meet the members' and the entrepreneurs' needs and encourages sufficiency, as it antagonises economic growth. (3) Solidary contributions instead of fixed prices facilitate social inclusion and fairness among participants of CSBMs as it secures the social foundation for entrepreneurs and members. In our essay, we explain each of these principles in greater detail.

Moreover, the essay provides six intriguing examples of CSBMs in practice. For example, we introduce community-supported car-sharing. Conventional car-sharing is usually offered in large cities, whereas people in smaller towns or rural areas often have no alternative to owning a vehicle. The community-supported business ‘Vianova Coop’ enables neighbourhoods in rural areas to create a market-autonomous car-sharing opportunity and become independent from owning their own vehicle. Six to eight users share the fixed costs of the vehicle in solidarity through bidding rounds, while the variable costs are borne individually. In this way, the community meets the entrepreneurs’ demands in a needs-oriented way. The direct relationship between producers and members and the needs-oriented and solidary financing structure in these ventures contribute to the sufficiency economy.2

In summary, this essay contributes to the scholarly discourse on sufficiency in business by introducing CSBMs as unique microeconomic sufficiency models. We discuss how direct relationships between producers and consumers and a needs-oriented, solidary financing structure build the foundation of CSBMs. We explain how these core principles enable CSBMs to generate the necessary revenue - neither more nor less. This unique business model is perfectly suitable to act within the socially just space in which humanity can thrive (Raworth, 2017).

Keywords 

Degrowth, sustainable development, community-supported agriculture, needs-orientation

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