# Niche-Regime Contractual Arrangements as Drivers of Agri-Food Transitions: Insights from the French Dairy System

Melise Bouroullec-Machado, Amanda Ferreira Guimarães, Marie Dervillé, Marie-Benoit Magrini

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Melise Bouroullec-Machado, Amanda Ferreira Guimarães, Marie Dervillé, Marie-Benoit Magrini. Niche-Regime Contractual Arrangements as Drivers of Agri-Food Transitions: Insights from the French Dairy System. XVIII EAAE Congress: food system transformation in challenging times, European Association of Agricultural Economists, Aug 2025, Bonn (Germany), Germany. 20 p. hal-05489309

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# Niche-Regime Contractual Arrangements as Drivers of Agri-Food Transitions: Insights from the French Dairy System

Melise Machado, Amanda Ferreira Guimarães, Marie Dervillé and Marie-Benoît Magrini

**Abstract:** The economic literature views contractual arrangements as essential tools for securing supply chain and managing risk within agri-food value chain. Recent research, combined with insights from transition studies, has advanced the idea that they can also serve as instruments for developing new, more sustainable value chains. In the context of agri-food systems transitions, this requires rethinking contractual arrangements between producers, processors, and retailers. This paper introduces what we call Niche-Regime Contractual Arrangements (NiReCa), defined as adaptive coordination mechanisms structuring interactions between niche-innovations (farmer-led initiatives) and regime (incumbent dairies). Drawing on Multi-Level Perspective (MLP) and New Institutional Economics (NIE) - particularly Transaction Cost Economics (TCE) - we propose a three-phase analytical framework: (1) the emergence of niche-innovations, shaped by sustainability ambitions and internal coordination mechanisms; (2) the evolution of NiReCa patterns; and (3) the institutionalisation of NiReCa and their role in reshaping the architecture of agri-food systems through empowerment dynamics. Empirically, using a qualitative methodology, the study draws on seven cases to analyse cross-case patterns. The findings highlight three major dynamics: (1) dairy farmers-led niche-innovations leverage regional branding and innovative contractual arrangements to regain economic agency; (2) tensions between farmer-led niche-innovations and incumbent dairies require flexible strategies, including informal agreements and strategic alliances; (3) small and medium-sized enterprises (SMEs) play a key role in supporting dairy system transitions by facilitating news projects and offering alternative enabling transitions by offering alternative processing and market access. NiReCa are not merely tools for securing fairer remuneration – they are fundamental drivers of structural change. By enabling coordination between diverse actors, they foster contractual innovations that balance economic resilience with sustainability goals. These findings contribute to agri-food economics by showing how contractual adaptations mediate structural transformations in food systems.

**Keywords:** Farmer-led Initiatives, Contractual Innovation, Dairy Value Chains, Agri-Food System Transformation
# 1. Introduction

Contractual arrangements are central to structuring agri-food systems, governing relationships between producers, processors, distributors, and consumers. They serve as coordination mechanisms that reduce transaction costs, allocate risks, and establish incentives within agri-food value chains (Williamson, 1985; Ménard, 2011). These agreements - whether formal (written) or informal (verbal) - delineate the rights, duties, and responsibilities of each actor involved (UNIDROIT et al., 2015). Contractual arrangements play a critical role in mitigating uncertainty, fostering cooperation, and structuring long-term economic relationships in agri-food systems (Sykuta & Harvey, 2004).

In the context of agri-food system transitions, contractual arrangements have gained renewed relevance as sustainability imperatives, market deregulation, and shifting consumer demands reshape traditional production and distribution models. Market liberalisation and the decline of price support mechanisms have heightened volatility, compelling actors to engage in contractual arrangements that ensure stability and secure market access (Sonnino & Marsden, 2006; Seyfang & Smith, 2007). Moreover, the rise of alternative agri-food value chain - such as short value chains and fair-trade initiatives - illustrates how niche-innovations, including emerging models, can support value chain and inclusive coordination (Marsden, 2013).

Transition studies provide a valuable lens for understanding these transitions, particularly through the Multi-Level Perspective (MLP), which examines the interactions between the socio-technical landscape, socio-technical regimes, and niche-innovations (Geels, 2002). Transitions are driven by pressures from the socio-technical landscape, including policy shifts and increasing societal concerns regarding sustainability and equity (Geels, 2022). Regimes - comprising dominant market structures, regulatory frameworks, and institutional norms - tend to resist change due to their embedded routines and power asymmetries. However, niche-innovations - emerging from grassroots movements, alternative initiatives, or experimental production practices - challenge and potentially reconfigure entrenched market relations (Geels, 2004; Ollivier et al., 2018).

The role of contractual arrangements in these transitions is both strategic and multifaceted. On the one hand, contractual rigidity can reinforce existing power imbalances and limit the adaptability of agri-food systems to emerging challenges. On the other hand, innovative contractual arrangements, such as producer-led agreements and some cooperative contracts, can facilitate the diffusion of niche-innovations and promote structural change. The interactions between niche-innovations and regimes are dynamic and multifaceted, often leading to adaptive
coordination that balance economic efficiency with sustainability goals (Elzen et al., 2012).

Despite these insights, much of the literature has focused on technological and policy-driven aspects of agri-food system transitions (Runhaar et al., 2020), often overlooking the role of contractual arrangements as instruments of institutional adaptation. Studies have yet to fully explore how contractual arrangements mediate the coexistence and coevolution of niche-innovation and regime actors. While discussions of socio-technical transitions often highlight the agency of actors in transforming agri-food practices (Shove and Walker, 2010), there is limited research on how contractual arrangements facilitate or hinder these processes (Cholez et al., 2020; Cholez and Magrini, 2023). This study aims to address this gap by examining how Niche-Regime Contractual Arrangements - hereafter referred to as NiReCa - evolve and contribute to agri-food system transitions.

The paper is structured in five sections. The next section presents the analytical framework. Section 3 presents the multi case study choice, and the methods used for collecting and analysing empirical data. Section 4 presents and discusses the results. We conclude in section 5 with key findings and implications for researchers and practitioners.

## 2. Analytical Framework: Contractual Arrangements and Niche-Regime Interactions

Although the MLP provides a robust framework for analysing transitions, it has been criticised for its limited capacity to account for how actors coordinate interactions and negotiate institutional change. In response, recent theoretical developments - particularly Geels (2020) - have proposed to strengthen the micro-foundations of the MLP by drawing on neo-institutional theory, evolutionary economics, and social constructivism. These approaches shed light on how coordination is shaped by actors' cognitive frames, resources, and institutional strategies.

This is particularly salient in the agri-food systems, where coordination across value chains relies heavily on formal and informal contractual arrangements shaped by institutional rules and long-term investments (Martino et al., 2017; Ménard, 2011, 2018). In this context, we put forward our own conceptual contribution - NiReCa - as a framework to explore the processes of coordination between niche-innovation and regime. Our analytical framework builds on socio-technical transition approach reviewed by Geels (2019), which is divided into four phases with different core activities and struggles. We extend this framework by integrating insights from NIE, and more specifically TCE, to bridge systemic perspective of socio-technical transitions with the micro-level transactional interactions that are central to niche-regime
coordination (see Figure 1).

<figure><img src="image_2.png" /><figcaption>Figure 1: NiReCa Conceptual Framework</figcaption></figure>

Rather than treating these perspectives as separate, we develop a unified approach that examines the role of NiReCa in agri-food transitions. Our framework suggests that, beyond securing asset specificity and mitigating uncertainties stemming from the environment and behaviours (Williamson, 1991), NiReCa serve as a lever for coordinating actors in agri-food system transitions. Niche-innovations do not exist in isolation - particularly those led by farmers who, while embedded within the regime, dedicate part of their production to supporting niche-innovation, for instance through territorialised agri-food value chains. These niche-innovations emerge within the regime and regulatory frameworks, requiring NiReCa adjustments to gain legitimacy and scalability.

This creates a space for dialogue that promotes co-construction and coevolution between niche-innovations and regimes. NiReCa play a dual role in agri-food system transitions, acting either as stabilising forces that reinforce regime structures or as catalysts that facilitate the integration of niche-innovations. This dynamic requires an ongoing negotiation process between actors navigating regulatory frameworks, market structures, and power asymmetries. These contractual arrangements evolve through distinct stages that characterise their adaptation within agri-food systems.

## 2.1 Operationalising NiReCa: A Three-Phase Analytical Framework

To translate our conceptual framework into an analytical tool, we propose a three-phase structure - adapted from Geels (2019) - to analyse the evolution of NiReCa over time (see Figure 2). This operationalisation enables us to examine how coordination mechanisms emerge,
evolve, and become institutionalised, linking micro-level transaction dynamics with broader
transitions in agri-food systems.

<figure><img src="image_3.png" /></figure>

Adapted from Geels (2019); Ingram (2015); Williamson (1985), Raynaud & Sauvée, (2000), and Ménard (2018)

<caption>Figure 2: Phased Evolution of NiReCa in Agri-food System Transitions</caption>

Socio-technical transitions unfold over several decades, which we divide into three phases. Phase 1 - Experimentation - is characterised by the steering and incubation of niche-innovations through collective visions and coordination mechanisms. Actors define sustainability goals, position themselves in relation to the regime (Ingram, 2015), and organise decision-making within internal structures through three key mechanisms: coordination, incentive, and control (Raynaud & Sauvée, 2000). These are designed to support collective action and mitigate opportunistic behaviours. Particular attention is paid to the allocation of property rights (who controls resources) and decision rights (who decides how resources are used) (Ménard, 2018) which are facilitated by experimentation and trial-and-error learning (Geels, 2019).

During this experimentation period, tensions may emerge as niche-innovation and regime
actors begin to articulate their positioning. Initial NiReCa should take the form of informal or
experimental contractual arrangements between farmers from the niche-innovation and first
buyers (e.g., incumbent dairies from the regime), prefiguring the first struggles and
collaborations. These early interactions lay the groundwork for subsequent phases, where
NiReCa begin to respond to evolving coordination needs and institutional pressures, shaping
the agri-food system transitions.

In our framework, Phase 2 - Evolution - merges the second and third phases of Geels (2019),
focusing on how niche-innovations consolidate within market niches and progressively diffuse
into mainstream markets. Following Elzen et al., (2012), market niches are understood as
subsections of the regime where innovations can survive without protective measures,
indicating a degree of compatibility with existing structures. This phase is marked by the
evolution of NiReCa, which adapt to the specific characteristics of transactions and the strategic
constraints they entail. These arrangements are not static; they evolve through iterative
processes of learning, bargaining, and experimentation (Cholez and Magrini, 2023; Cholez et
al. 2023), which can either stabilise or disrupt NiReCa - particularly in agri-food systems, where
relationships are often shaped by power imbalances and long-term dependencies.

Drawing on TCE, in this phase we analyse how food or/and service transactions are coordinated based on factors such as uncertainty, asset specificity (physical, human, brand-related, temporal, or dedicated), and the allocation of rights (Williamson, 1985; Ménard, 2018). These factors influence the design and dynamics of NiReCa, which in turn shape the capacity of niche-innovations to scale up and respond to regime pressures. In this way, our approach complements Geels' MLP by highlighting the contractual dimension of coordination that underpins socio-technical transitions.

The Phase 3 - Institutionalisation/Anchoring - corresponds to the stage where NiReCa stabilise and potentially reshape coordination rules within the socio-technical regime. This phase reflects both the institutional embedding of niche-innovations and their strategic empowerment. Following Smith & Raven (2012), empowerment can occur through two distinct pathways: fit-and-conform, where niche-innovation practices align with existing regime rules, and stretch-and-transform, where niche-innovation actively seek to modify those rules.

Institutionalisation is observed through the integration of NiReCa into formal norms, standards,
or public regulations, their recognition by regime actors, and their influence on dominant
coordination practices (Geels et al., 2016). These arrangements may also alter power relations,
such as bargaining positions between farmers and buyers, and provoke regime responses
ranging from resistance to co-optation.

NiReCa thus play a dual role: as instruments for coordinating transactions and as potential
drivers of agri-food system transitions. Their evolution reflects the balance between
endogenous coordination mechanisms and institutional embeddedness, which, while often
constraining, can be strategically reshaped through negotiated change.
# 3. Material and Methods

## 3.1 Context: Dairy System in Southwestern France

The French and EU dairy sector has experienced significant institutional restructuring since the end of milk quotas in 2015, notably through the implementation of mandatory five-year contracts between farmers and dairies. While these arrangements, supported by national and EU legislation, aimed to stabilise market relations and empower farmers via Producer Organisations (POs), most POs remain mono-dairy and non-commercial, limiting farmers' strategic autonomy and access to value chains (CGAAER, 2016; Dervillé et al., 2022). These constraints reflect broader pressures within the socio-technical landscape, including regulatory inertia and uneven market liberalisation.

In response, several farmer-led niche innovations have emerged, seeking to regain control over milk valorisation and challenge dominant structures of the regime. The dairy system in southwestern France provides a particularly relevant setting for analysing the role of NiReCa in agri-food system transitions. This region is characterised by a tradition of dairy production, encompassing both lowland and mountain farming systems. The coexistence of these production systems contributes to the richness and diversity of local dairy products but also presents distinct structural challenges. Mountain dairy farming, often practiced in less accessible areas with lower economies of scale, faces additional constraints related to logistics, processing infrastructure, and farmer remuneration (Dervillé and Allaire, 2014). The region is also experiencing significant depopulation of dairy farms, which threatens the viability of small-scale farms and the continuity of traditional production methods. These structural pressures position southwestern France as a key case for investigating NiReCa's role in dairy system transitions.

## 3.2 Case Study Design and Selection

Given the lack of data on contractual arrangements in agri-food systems (Vavra, 2009), to capture the diversity of NiReCa, we adopted a multiple-case study design. According to Yin (2018), they offer several advantages over single-case designs, notably in terms of robustness, analytical generalisation, and explanatory power. As presented in Table 1, the seven cases vary in scale, legal form, product type, and territorial reach. They include individual farm-based initiatives producing cheese for on-farm sales, as well as POs - associations and cooperatives - operating across one to three collection areas or the broader Southwest region, and marketing UHT milk and other dairy products through supermarket channels.
<table><caption>Table 1: Overview of Case Studies</caption><thead><tr><td>Niche-innovation</td><td>Year of creation</td><td>Legal status</td><td>Farmers (n)</td><td>Collection area*</td><td>Annual volume (l)</td><td>Products</td><td>Main marketing channel</td></tr></thead><tbody><tr><td>Fromagerie de la Sestière</td><td>2021</td><td>Farm**</td><td>2</td><td>1</td><td>260k</td><td>Cheese</td><td>On-farm sales</td></tr><tr><td>Tomme du Ramier</td><td>1951</td><td>Farm**</td><td>2</td><td>1</td><td>700k</td><td>Cheese</td><td>On-farm sales</td></tr><tr><td>Mont Valier</td><td>2014</td><td>Farm**</td><td>1</td><td>1</td><td>210k</td><td>Cheese</td><td>On-farm sales</td></tr><tr><td>Brique Rose</td><td>2023</td><td>Association</td><td>14</td><td>1</td><td>3,5M</td><td>UHT milk</td><td>Supermarkets</td></tr><tr><td>Blanc des Pyrénées</td><td>2018</td><td>Association</td><td>17</td><td>1</td><td>7,5M</td><td>UHT milk, yoghurt, cream</td><td>Supermarkets</td></tr><tr><td>Cant'Avey'Lot</td><td>2010</td><td>Regional cooperative</td><td>30</td><td>3</td><td>13M</td><td>UHT milk, yoghurt, cheese</td><td>Supermarkets</td></tr><tr><td>Éleveurs du Sud-Ouest</td><td>2022</td><td>National cooperative</td><td>100</td><td>Southwest</td><td>800k</td><td>UHT milk, cheeses</td><td>Supermarkets</td></tr></tbody></table>

The replication logic forms the cornerstone of the multiple-case study approach (Yin, 2018). In this study, each case functions as a theoretical replication, offering either confirmatory or contrasting evidence on the role of NiReCa in dairy system transitions. This strategy strengthens the validity of the findings by identifying recurring patterns while also highlighting contextual nuances specific to niche-innovations.

### 3.3 Data Collection and Analysis

The empirical material was collected using a longitudinal approach between 2020 and 2023. As presented in Table 2, it includes 27 semi-structured interviews with farmers, representatives of POs, incumbent dairies, small and medium-sized dairies (SMEs), and the National Federation of Milk Producers. These interviews were complemented by participant observation in general assemblies, interprofessional meetings, and a multi-stakeholder seminar co-organised with researchers and practitioners. Regular exchanges over the study period supported the monitoring of NiReCa developments and institutional changes. Internal documents - such as production specifications, statutes, and drafts of contractual arrangement proposals - were also analysed to triangulate and enrich the findings.

<table><caption>Table 2: Primary Data Collection (December 2020 - November 2023)</caption><thead><tr><td>Category</td><td>Type of Data</td></tr></thead><tbody><tr><td>17 Farmers</td><td>Semi-structured interviews</td></tr><tr><td>2 Representatives of POs</td><td>Semi-structured interviews</td></tr><tr><td>3 Incumbent Dairies</td><td>Semi-structured interviews</td></tr><tr><td>3 Small-and Medium-Sized Dairies</td><td>Semi-structured interviews</td></tr><tr><td>2 Representatives of the National and Regional Federation of Milk Producers</td><td>Semi-structured interviews</td></tr><tr><td>Niche-innovation's General Assemblies</td><td>Meeting Participation</td></tr><tr><td>Niche-innovation Meeting</td><td>Meeting Participation</td></tr></tbody></table>

<footnote>*département* refers to a sub-regional administrative unit in France, smaller than a region; **farm** refers to small-scale family-run operations</footnote>
<table><tr><td>Dairy Field Visit</td><td>Meeting Participation</td></tr><tr><td>Dairy Agri-Food Actors and Researchers' Forum</td><td>Meeting Participation</td></tr><tr><td>Interprofessional Meeting</td><td>Meeting Participation</td></tr></table>

Interviews lasted between 74 and 170 minutes and followed a semi-structured guide addressing: (1) the history and vision of the niche-innovation; (2) the evolution of contractual arrangements and the emergence of new coordination mechanisms; (3) key transaction attributes (e.g. investments, uncertainty, rights); and (4) how these arrangements support or hinder niche-regime interactions and transitions. The interviews were fully transcribed and coded using Atlas.ti. The coding scheme was directly aligned with the analytical framework (2.1) summarised in Table 3. A synthesis was conducted for each individual case, followed by a comparative analysis across cases, as recommended by Yin (2018). This approach strengthens the validity and explanatory power of the findings.

<table><caption>Table 3. Main analytical concepts and variables considered</caption><thead><tr><td>Phases</td><td>Analytical concepts</td><td>Concept delineation</td><td>Variables addressed in case studies</td><td>References</td></tr></thead><tbody><tr><td>Phase 1 - Emergence</td><td>Origin of the niche-innovation</td><td>Cognitive and normative foundations that orient collective action towards evolve coordination forms</td><td>-Positioning relative to regime<br/>-Sustainability goals/shared values<br/>-Coordination, incentive, and control mechanisms (e.g. pooled investments, shared standards, collective branding, joint quality control)</td><td>Geels (2019); Ingram (2015); Raynaud & Sauvée (2000); Ménard (2018)</td></tr><tr><td>Phase 2 - Evolution</td><td>Evolution<br/>NiReCa patterns</td><td>NiReCa adapt over time to the specific characteristics of transactions and the strategic constraints they entail</td><td>-Specific investments<br/>-Uncertainty<br/>-Allocation of property and decision rights</td><td>Geels (2019); Williamson (1985); Ménard (2018)</td></tr><tr><td>Phase 3 - Institutiona lisation/ anchoring</td><td>NiReCa stabilisation & empoweme nt dynamics</td><td>NiReCa stabilise and potentially trigger adjustments in the socio-technical system.</td><td>-Type of empowerment strategy (fit vs. stretch)<br/>Integration into formal norms, standards or public regulations<br/>-Recognition by regime actors<br/>-Influence on dominant coordination practices<br/>-Shifts in bargaining power<br/>-Regime responses (resistance, adaptation, or co-optation)</td><td>Smith & Raven (2012); Geels et al. (2016)</td></tr></tbody></table>

## 4. Results and Discussion

The following section presents the key findings from our case studies, highlighting the role of NiReCa in shaping dairy system transitions in southwest France. These results illustrate how different actors navigate market constraints, institutional pressures, and power asymmetries through cooperative reappropriation and the adaptation of both formal and informal contractual arrangements.
## 4.1 Cooperative Contractual Adaptations: From Rigidity to Regional Branding and Value Distribution

The case of *Les Éleveurs du Sud-Ouest*, a regional initiative within the Sodiaal cooperative, illustrates the Emergence Phase by showing how farmers regain control over added value through regional branding. Faced with the rigidity of uniform cooperative pricing, a group of 200 farmers mobilised in 2022 to establish a niche-innovation leveraging short value chains and reinforced territorial identity. Despite governance constraints inherent in cooperative contracts, the initiative developed a regional solidarity fund, which redistributed additional revenues (€0.05 per litre of milk and €0.28 per kilogram of cheese). This fund, supported by consumer contributions, enabled farmers to finance environmental improvements, animal welfare initiatives, and workforce support, reinforcing sustainability commitments while ensuring social viability. A Sodiaal member explains: “For the first time, we felt that our milk had a unique identity. This fund allows us to think beyond basic survival and reinvest in the farm’s future”.

In 2023, the project resulted in the sale of 800,000 litres of milk, accounting for less than 1% of Sodiaal's total milk collection in southwest France. However, as one farmer described it: “We are experiencing something that no one else has ever experienced before”, underscoring the transformative impact of this niche-innovation within cooperative contractual arrangements. By overcoming contractual rigidities and leveraging innovative value redistribution mechanisms, *Les Éleveurs du Sud-Ouest* demonstrates the potential of regionalised cooperative strategies to reconcile tensions between large-scale and localised agri-food value chains. One farmer described the impact of this niche-innovation: “For years, we were anonymous suppliers. Now, through this regional brand, we are seen as part of a community, not just a source of raw milk”.

Participation in the initiative required farmers to sign a charter of engagement, committing to actively promoting the brand through in-store and online outreach. Farmers also played a role in direct negotiations with retail buyers, reinforcing their position within the value chain. This re-engagement with the cooperative structure has been instrumental in reducing farmer isolation and restoring agency, particularly among those nearing retirement, for whom the initiative provided new perspectives on farm succession and dairy system resilience. This niche-innovation, although representing a small fraction of Sodiaal's total milk collection, demonstrates the potential scalability of regionalised cooperative strategies to reconciling large-scale production with localised value creation.
## 4.2 Tensions and Collaborations in Niche-Regime Contractual Arrangements

The cases of *Blanc des Pyrénées*, *La Ferme du Ramier*, and *La Brique Rose* reflect insights of Phase 2 - Evolution in the framework, highlighting how farmers navigate NiReCa rigidity by fostering collaborations or engaging in tensions and ruptures with incumbent dairies.

*Blanc des Pyrénées*, established in 2018 by a collective of 17 farmers producing approximately 10 million litres of milk annually, exemplifies a dual strategy approach. Farmers maintained contractual ties with incumbent dairies while simultaneously scaling niche-innovation through vertical integration, facilitated by targeted subcontracting agreements. Confronted with resistance from certain incumbents - some issuing ultimatums such as “Either you stay with us entirely, or you leave” - farmers responded by initiating contractual ruptures, forming informal agreements, and pursuing gradual structural transformations. Over time, the NiReCa evolved to accommodate new subcontracting partnerships with both incumbents and SMEs dairies, particularly for UHT processing and logistics. This adaptive strategy ensured sufficient processing capacity and market reach, enabling the niche-innovation to offer a differentiated milk price of €460 per 1,000 litres in 2023, markedly higher than the regime-standard €330 per 1,000.

In contrast, *Ferme du Ramier*, demonstrates complementary NiReCa pattern that has successfully balanced direct valorisation and cooperative-based security over more than three decades. In response to the introduction of milk quotas in 1988, the farm initiated on-site milk processing, establishing one of the region's pioneering farmstead cheese dairies. This mixed strategy integrates artisanal cheese production with contractual security via the Sodiaal cooperative, which absorbs surplus milk not processed on-site. The cooperative adapts its collection schedule to align with the farm's operational rhythms, collecting milk during weekends when cheese production is suspended. This flexible NiReCa enables the farm to optimise production cycles without facing immediate market pressure, thereby enhancing economic resilience and mitigating exposure to price volatility. The case illustrates how short and long value chains can be mutually reinforcing when coordinated through hybrid contractual arrangements.

*La Brique Rose*, launched in late 2022 by a group of eight farmers, sought to establish a territorially embedded and socially equitable local dairy system, ensuring fair milk pricing and supports the next generation of farmers. A solidarity fund was introduced, allocating €0.05 per litre of milk to assist young farmers in establishing dairy operations - a critical intervention amid declining farm installations. However, the decision to dissociate from incumbent dairies
generated significant tensions, particularly with cooperative actors. Farmers faced termination
periods of up to five years, as stipulated in cooperative contracts, which significantly delayed
their ability to redirect milk flows towards the niche-innovation. Unlike other cases where
informal agreements facilitated earlier exits or adaptations, *La Brique Rose* encountered a strict
enforcement of formal contractual terms, with no informal flexibility granted by incumbent
dairies.

To circumvent these institutional barriers, farmers secured alternative contractual arrangements
with SMEs such *YéoFrais*, a dairy owned by the cooperative *Maîtres Laitiers du Cotentin*,
which progressively integrated their milk into its production system. This scalable NiReCa
partnership, initially involving four farmers and later expanding to eight, facilitated the launch
of a dedicated production line. The case underscores how production scale and milk volume
can shape the emergence and consolidation of niche-innovations. A strategic alliance with Max
Havelaar France further bolstered the initiative by securing Fair-Trade certification, enhancing
consumer trust and aligning the niche-innovation with broader sustainability and ethical
sourcing objectives.

Collectively, these three cases illustrate diverse NiReCa patterns of stabilisation: from complementary contractual arrangements (*Ferme du Ramier*) to dual strategies of coexistence and subcontracting with incumbents (*Blanc des Pyrénées*), and SME-led collaborations (*Brique Rose*). They underscore the transitional dynamics of the Evolution Phase, revealing multiple pathways to balance tensions, secure value chains, and construct resilient market positions within the southwest dairy system.

4.3 From Crisis Response to Market Niche through Total Vertical Integration

* Cant'Avey'Lot* represents a longstanding niche-innovation that has withstood significant external shocks, demonstrating how farmers-led niche-innovations can evolve into stable market niches. This case aligns with the Evolution Phase 2 – Diffusion, wherein niche-innovations may integrate into the regime as a market niche without requiring protective measures (Elzen et al. 2012). Initially formed in response to a structural crisis in 2010 - when a group of 220 dairy farmers lost their contracts with their exclusive Spanish dairy collector - the initiative aimed to stablish a more secure and autonomous coordination mechanism.

At its inception, the niche-innovation lacked capital, processing infrastructure, and formal
contractual arrangements. It progressively developed internal processing capabilities, enabling
farmers to regain control over pricing and distribution. This transformation was not fraught with challenges, including regulatory constraints, market volatility, and resistance from incumbent dairies to engage in subcontracting agreements. A small cooperative was formed and gradually built new processing partnerships, evolving from bottled milk to a diversified portfolio of dairy products. A pivotal subcontracting agreement with a SME dairy (Laiterie Saint-Denis-de-l'Hôtel) enabled large-scale UHT milk production. *Cant'Avey'Lot* expanded its market reach through major retailers, including a strong partnership with Franprix in the Paris region and several supermarket chains in southern France.

Over time, sustained efforts and investments in processing infrastructure reinforced its economic viability of the niche-innovation. Through vertical integrating and direct retail partnerships, *Cant'Avey'Lot* emerged as a resilient market niche, illustrating how crises can serve as catalysts for structural transformation within mainstream regime.

The initiative offers a favourable base milk price, supplemented by two end-of-year premiums linked to product sales. By 2021, the base milk price reached €430 per 1,000 litres (€453 with quality premiums), significantly exceeding the national average of €363 per 1,000 litres for that year. *Cant'Avey'Lot* provides a distinct example of NiReCa adaptation, characterised by a rupture with incumbent dairies, synergic contractual arrangements with SMEs and retailers, and progressive vertical integration.

## 4.4 SME-Led Contract Valorising Organic and Pastoral Milk

The cases of *Sestière et Mont Valier* farmstead cheese dairies illustrate again how SMEs can serve as pivotal actors in the Emergence Phase (Phase 1) of socio-technical transitions by offering farmers alternative contractual arrangements to initiate dairy value chain. These partnerships foster strong, long-term collaborations between individual farms and independent artisanal cheesemakers. Unlike previous cases where farmers negotiated with incumbent cooperatives or exited the mainstream dairy system entirely, these niche-innovations demonstrate that structural change can also emerge through decentralised, SME-driven NiReCa, rather than through direct confrontation with incumbent dairies.

Rather than joining collective initiatives, farmers in these cases secured individual contractual arrangements with local artisanal dairies. These arrangements enabled them to retain greater control over milk pricing and production, particularly for organic and mountain milk.

At *Sestière* farm, milk was previously supplied to the Sodiaal cooperative. However, in 2010,
along with twenty other farmers, the farm terminated its cooperative contract in favour of an
individual agreement with an artisanal cheese dairy in the Pyrénées Mountains. This SME dairy,
which processes only conventional milk, was unable to valorise the farm's organic milk
following its conversion. In 2021, after two years of project development, a lease-based contract
led to the establishment of The Sestière Cheese Dairy on the farm premises. The farm now
retains up to 80% of its organic milk production for local and regional cheese production and
distribution, with the long-term objective of achieving full autonomy. The price premium
generated by this niche-innovation exceeds €100 per 1,000 litres, significantly surpassing
returns from conventional organic milk systems.

At Mont Valier, the creation of a commercial entity in the early 2000s provided a local legal
framework that secured a long-term partnership between the farmer and Jean Faup Cheese
Dairy. To fully integrate high-altitude milk processing, the SME established a dedicated
mountain pasture cheesemaking facility, enabling on-site transformation of milk into traditional
cheeses during the summer months. By processing milk directly in the mountains, this niche-
innovation enhances the value chain of mountain pasture dairy production and ensures a price
premium exceeding €100 per 1,000 litres, providing essential added value for the farm.

These cases offer valuable insights for replicating SME-driven NiReCa patterns. Such contracts enable farmers to secure higher milk prices reducing exposure to market volatility. SMEs provide alternative processing infrastructures, creating opportunities for farmers to exit low-value conventional value chains. SME-driven partnerships allow individual farms to progressively reallocate high-quality milk production towards independent, value-added processing.

4.5 Institutionalisation and Anchoring of NiReCa Patterns

The comparative analysis of the seven case studies reveals differentiated patterns of NiReCa
institutionalisation, reflecting varying degrees of stabilisation and empowerment within the
socio-technical dairy system. This corresponds to Phase 3 of transition dynamics, where
NiReCa begin to consolidate and exert influence on dominant structures. The analysis
highlights how empowerment strategies, anchoring, coordination practices, and regime
responses shape the trajectories of NiReCa and their potential to transform the dairy value
chain.

The observed NiReCa patterns illustrate a continuum of empowerment, ranging from alignment
with regime to an ongoing transition. Fit and conform empowerment, as exemplified by
*Éleveurs du Sud-Ouest* and *Ferme du Ramier*, operate within stablished cooperative
frameworks and on-farm processing embedded rules (established since the beginning of quota).
While these cases do not fully break with the socio-technical regime, they initiate a process of
transition from within. In particular, *Éleveurs du Sud-Ouest* demonstrates an internal
territorialisation strategy through the creation of a regional fund ("cagnotte") within the
cooperative system, enabling a form of regionalisation without exiting the incumbent patterns.
This illustrates an early-stage transition, where niche-innovation empowerment emerges
through negotiated adjustments rather than structural rupture.

In contrast, stretch and transform empowerment, visible in *Cant'Avey'Lot, La Brique Rose, Blancs des Pyrénées, Mont Valier, and Sestières*, reflect a more transformative intent. These niche-innovations mobilise autonomous infrastructures, rupture with incumbent contracts (cooperative & private), and engage in strategic partnerships with SMEs, thereby challenging established coordination mechanisms and repositioning farmers within the value chain.

The degree of formalisation and institutional recognition varies across niche-innovations. In *Cant'Avey'Lot* the development of joint ventures and partial vertical integration signals a process of anchoring, potentially leading to integration into regional development policies. This case demonstrates a capacity to stabilise NiReCa and gain legitimacy beyond the immediate network of actors. In contrast, *La Brique Rose, Blanc des Pyrénées, Sestière, and Mont Valier* represent younger niche-innovations. While their current institutional embedding remains limited, their legitimacy may strengthen over time. Provided that competitive tensions do not emerge between them, these initiatives could progressively attract the attention of public authorities and be considered for inclusion in policy frameworks or formal standards.

NiReCa patterns differ significantly in their capacity to reshape coordination practices and renegotiate power relations within the dairy system. In *Cant'Avey'Lot, La Brique Rose, Sestière, and Mont Valier*, farmers progressively - or in some cases abruptly - terminated their relationships with incumbent dairies. This disengagement from the regime illustrates a growing discontent with the regime. Farmers are compelled to invest, take risks, or form new alliances with SMEs to sustain their dairy value chains. These cases reflect a transition from passive to proactive coordination, with farmers asserting greater control over processing and marketing infrastructures. Conversely, *Éleveurs du Sud-Ouest* and *Blanc des Pyrénées* demonstrate that farmers can also influence coordination mechanisms from within incumbent dairies. Through mechanisms such as regional branding or negotiated alliances, these niche-innovations show
varying degrees of power rebalancing, challenging dominant norms and eliciting resistance or adaptation from regime actors.

The regime's responses to NiReCa patterns range from accommodation to resistance. *Ferme du Ramier* illustrates a case of accommodation, supported by the regulatory framework that protects on-farm processing and direct sales from producers to consumers – measures initially introduced during the quota era and maintained after its abolition. *Éleveurs du Sud-Ouest* presents a potential case of co-optation, as regional branding initiatives are being experimented within the national cooperative dairy structure. This integration may contribute to reducing farmers' willingness to exit the regime and to initiate or support other niche-innovations. *La Brique Rose* reflects a more conflictual dynamic, where the contractual rupture from incumbent dairies is a deliberate last resort for this group of farmers. These varied responses underscore the importance of understanding regime-niche interactions not only in terms of structural compatibility but also in terms of strategic positioning and power asymmetries.

**5. Conclusion**

This article aimed to explore how NiReCa can enable socio-technical transitions in the dairy system of southwestern France. Drawing on insights from MLP and TCE, we mobilised the NiReCa framework as a heuristic tool to analyse the evolving coordination patterns that support the emergence and consolidation of niche-innovations, as well as the transition of agri-food systems.

Our findings show that NiReCa operate as a flexible and evolving coordination mechanisms that supports the emergence, evolution, and institutionalisation of niche-innovations within the dairy sector. NiReCa captures a diversity of empowerment strategies - from negotiated adjustments within incumbent dairies to more transformative pathways involving contractual ruptures and autonomous infrastructures. The comparative analysis of seven case studies reveals that NiReCa patterns vary in their degree of formalisation, influence on coordination mechanisms, and capacity to shift bargaining power. These patterns also elicit differentiated regime responses, ranging from accommodation and co-optation to resistance.

This study advances both transition studies and NIE by integrating MLP and TCE to analyse NiReCa as key mediators in niche-regime interactions. As noted by El Bilali (2019), transition studies in agri-food systems often overemphasise technological innovation and macro-level pressures, overlooking the actors' coordination mechanisms that underpin transitions. Our
framework addresses this gap by positioning NiReCa as key tool of institutional coordination. It also responds to Van den Bergh et al. (2021)'s call for more pluralistic and institutionally grounded approaches to sustainability transitions. This combined approach offers a richer analytical framework for examining transition in agri-food systems.

For practitioners, considering NiReCa reveals distinct coordination patterns across the transition pathway. In the Emergence Phase, NiReCa is characterised by informal agreements, solidarity-based redistribution mechanisms, and SME-led contracts that enable initial value capture and identity reconfiguration. As the Evolution Phase unfolds, NiReCa patterns become more structured and diversified, with hybrid contractual arrangements such as dual strategies of subcontracting and cooperative engagement, flexible coordination mechanisms balancing short and long value chains, and increasing formalisation through vertical integration, and strategic alliances with SMEs and retailers. These evolving patterns reflect differentiated trajectories of institutionalisation and empowerment, ranging from negotiated adjustments within incumbent actors to transformative ruptures and autonomous coordination. Across these phases, NiReCa evolve from adaptive and experimental forms to stabilised and potentially regime-influencing arrangements, illustrating its role as a dynamic instrument for navigating structural tensions, and fostering inclusive dairy value chains.

Building on these insights, it becomes evident that NiReCa have significant implications for public policy. This includes strengthening producer-led initiatives, promoting multi-buyer POs, and ensuring alignment with evolving legislative frameworks such as the EU CAP agroecologist reforms and the French EGAlim law, both of which aim to improve price transparency and support fairer remuneration for farmers. Such institutional support can reduce exposure to power asymmetries and mitigate the risks of contractual failures. The adaptive evolution of NiReCa should therefore be recognised as a critical lever in shaping the future of dairy value chains - affecting negotiation processes, and farmers' capacity for collective empowerment.

Looking ahead, further research is needed to assess the scalability and transferability of NiReCa across sectors and territories. Comparative studies - such as Bojovic and McGregor (2025) on New Zealand's dairy sector - highlight how diverse contractual arrangements respond to similar sustainability challenges in distinct institutional environments. These cross-national insights reinforce the relevance of NiReCa as an analytical and practical tool for guiding agri-food transitions. As Vermunt et al. (2020) remind us, ecological and regional specificities significantly shape the coordination mechanisms that emerge.
Finally, greater attention should be paid to the longitudinal dynamics of NiReCa adaptation. The early stage of certain niche-innovations offers valuable insight into medium-term structural change but limits our ability to assess long-term institutional anchoring, regime embedding, or the risk of reversion. Longitudinal studies are needed to explore the transformative potential of NiReCa. This aligns with the perspective of Aubert et al. (2021), who argue that just transitions must account for the socio-economic conditions of actors. Supporting farmers' livelihoods alongside NiReCa innovation is essential to ensuring inclusive, equitable, and resilient dairy system transitions.

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