Minhoca – market segmentation background
There are two main ways to categorise an economy: by design or by markets. The design approach connects suppliers and customers to each other through specialised products and services tailored to each specific interaction. A market place on the other hand is commoditised: products and services are supplied and consumed as-is and with little or no customisation.
A circular design can be built from zero, typical in the industrial symbiosis approach represented by e.g. the Kalundborg ecosystem. It can also develop within existing industries, such as in the Norwegian fishing sector. However, so far there has been little success in creating market places for circular commodities. For the circular economy to scale up, this issue needs to be resolved.
There are two main reasons why there are few large scale market exchanges for circular products. First, few circular products are currently standardised and are therefore not suitable for trading. Second, for those products that are standardised, supply is frequently inconsistent and unreliable. The way to resolve these barriers is to first segment the market for circular resources into trade readiness and value preservation, second to establish market places for segments with trade readiness and third to develop potential new segments. This is the mission of Minhoca.
Minhoca has identified fish processing as being ready for trade and to also have an acceptable level of value preservation. Fish processing is therefore where we plan to establish our first circular products exchange.
Plastics is an example of a segment where current trade readiness and value preservation are low, but which we believe has significant potential. Minhoca will make this and similar segments tradeable in two ways. First, we will use the Minhoca Knowledge Network, which consists of NGO´s, RD&I partners and potential customers to improve segmentation. Second, we aim to build an AI engine to identify and improve segmentation, i.e. to identify and develop markets of circular products.
By addressing the shortcomings of today´s exchanges for circular products, Minhoca will establish market places for secondary raw materials: the commodity markets of the future.