Producer organizations (POs) in developing countries are adopting diverse business models to remain competitive in the modern agri-food value chains. However, not much is known about the characteristics and types of these POs. This study employs business model framework to assess the business model components of POs and derive a typology based on these components. Further, the global value chain theory is used to draw implications of a PO business model for value chain coordination and upgrading. The Kenya dairy value chain is used as a case study. The paper finds that POs use a mix of business model components including membership, governance structure, legal form, key activities, value proposition, key resources, customer segment, revenue streams, and cost structure. Further, the study develops a typology consisting of bargaining, cooling, hub, and processing business models, which POs adopt. Findings indicate responsiveness of POs to coordination and upgrading in value chains. Specifically, increasing coordination and upgrading entails a shift from a bargaining business model to a processing business model. This, in turn has implications for investment, which can threaten social inclusion and hence rural development.