FROM WASTE TO VALUE: CIRCULAR BUSINESS MODEL INNOVATION IN TRANSFORMING TOFU BY-PRODUCTS INTO ANIMAL FEED AND DAGE ECONOMIC PRODUCTS

Abstract

This research aims to examine the application of the circular economy concept and Circular Business Model Innovation (CBMI) in the tofu industry in managing tofu residue waste into value-added products. This study employs a qualitative approach with a descriptive analysis method focused on the "RUN" tofu industry. The results indicate that "RUN" tofu industry have successfully implemented the principles of the circular economy by transforming production residues in the form of tofu waste into animal feed and dage food raw materials. The implementation of Circular Business Model Innovation not only reduces potential environmental pollution but also promotes product innovation that provides additional income sources. There have been innovations in the distribution system and operational cost efficiency, where consumers directly collect products from the "RUN" tofu industry location and the packaging process reuses without incurring additional operational costs. These findings confirm the hypothesis that Circular Business Model Innovation has a positive impact on the creation of value-added products efficiently without requiring large-scale modern technological investment. The collaborative network formed between tofu producers, livestock farmers, and dage makers has successfully created a mutually supportive business ecosystem. The value of this research is expected to contribute theoretically to the literature on sustainable business model innovation and serve as a practical reference for SMEsin realizing resource efficiency as well as economic, social, and environmental sustainability.