Strategic symbiotic arrangements: how can contract breweries help change a local market into part of an integrated broader market

Abstract

The impacts of the craft beer revolution reached Brazilian beer industry in the first years of this century. The evolution of the craft beer segment is paving the way to the development of different forms of organising in Brazil, such as contract brewing, designed for firms that do not own physical brewing facilities. This form of organising has several combinations, which vary according to the firm's value proposition. Contract brewing may be a reflection of open strategy practices, which affect both organisational structures and ownership forms. This research on the contract brewing business model attempts to advance our understanding of strategic symbiotic arrangements in this particular industry. After examining how contract breweries are operating in practice, we were able to group the business model's key components into two different configurations - symbiotic and transitional, whose main challenges are closely related to their interdependencies with a production partner and their interorganisational strategy.