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Assessing the Financial Viability and Sustainability of Circular Business Models in the Wine Industry: A Comparative Analysis to Traditional Linear Business Model—Case of Georgia

Author

Listed:
  • Vakhtang Chkareuli

    (Finance Program, Faculty of Business and Technology, Business and Technology University, 0162 Tbilisi, Georgia)

  • Gvantsa Darguashvili

    (Faculty of Business and Technology, Business and Technology University, 0162 Tbilisi, Georgia)

  • Dzintra Atstaja

    (Faculty of Law, Riga Stradins university, 1010 Riga, Latvia)

  • Rozita Susniene

    (School of Economics and Business, Kaunas University of Technology, 44249 Kaunas, Lithuania)

Abstract

In the contemporary global context, waste management and the judicious utilization of resources have emerged as pressing concerns. Consequently, the concept of a circular business model has gained prominence as a viable solution. This innovative model reframes waste not as a disposable byproduct but as an opportunity to generate new value, setting it apart from the conventional linear business model, particularly in financial, economic, and operational dimensions. Numerous industries grapple with the issue of excessive waste generation, among them the wine industry, notable for its substantial water and grape waste outputs. This predicament holds significant ramifications both on a global scale and within the specific context of Georgia. Yet, it also presents an innovative avenue for waste recycling. This study draws upon a comprehensive review of internationally recognized literature, noted for their scholarly significance and citation prevalence. In its practical segment, two distinct investment projects have been meticulously developed which seek to evaluate the financial viability of the circular business model in contrast to the conventional linear business model. The investment projects considered are as follows: 1. Under the framework of a linear business model, the company exclusively engages in the production and sale of wine. 2. Within the circular business model paradigm, the company not only produces wine but also harnesses waste processing to yield grape seed oil, which is subsequently marketed alongside wine bottles. Both models undergo rigorous scrutiny, employing a comprehensive analysis of key financial indicators essential for assessing project profitability and efficiency. The outcomes of this investigation reveal that, under identical capital investment conditions, the circular business model surpasses the linear model in terms of profitability. This underscores the potential for sustainable practices within the wine industry and the broader business landscape.

Suggested Citation

  • Vakhtang Chkareuli & Gvantsa Darguashvili & Dzintra Atstaja & Rozita Susniene, 2024. "Assessing the Financial Viability and Sustainability of Circular Business Models in the Wine Industry: A Comparative Analysis to Traditional Linear Business Model—Case of Georgia," Sustainability, MDPI, vol. 16(7), pages 1-22, March.
    • Handle: RePEc:gam:jsusta:v:16:y:2024:i:7:p:2877-:d:1366931
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    References listed on IDEAS

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    1. Wisdom Kanda & Martin Geissdoerfer & Olof Hjelm, 2021. "From circular business models to circular business ecosystems," Business Strategy and the Environment, Wiley Blackwell, vol. 30(6), pages 2814-2829, September.
    2. Jekaterina Kuzmina & Dzintra Atstaja & Maris Purvins & Guram Baakashvili & Vakhtang Chkareuli, 2023. "In Search of Sustainability and Financial Returns: The Case of ESG Energy Funds," Sustainability, MDPI, vol. 15(3), pages 1-16, February.
    3. Henryk Dzwigol & Nataliia Trushkina & Aleksy Kwilinski, 2021. "The Organizational and Economic Mechanism of Implementing the Concept of Green Logistics," Virtual Economics, The London Academy of Science and Business, vol. 4(2), pages 41-75, April.
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