STRATEGIC ENTREPRENEURSHIP: EXPLORATION, EXPLOITATION, AND AMBIDEXTERITY PRACTICES IN CRAFT BREWERIES FROM UBERLÂNDIA, MG<sup/>

SILVESTRE, JULIANE; BORGES, ALEX F.; PAULA, VERÔNICA A. F.

doi:10.1590/1678-6971/eRAMR220091

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Resources and Entrepreneurial Development • RAM, Rev. Adm. Mackenzie 23 (01) • 2022 • https://doi.org/10.1590/1678-6971/eRAMR220091 copy

STRATEGIC ENTREPRENEURSHIP: EXPLORATION, EXPLOITATION, AND AMBIDEXTERITY PRACTICES IN CRAFT BREWERIES FROM UBERLÂNDIA, MG¹ 1 This study was funded by the Research Support Foundation of the State of Minas Gerais (Fundação de Amparo à Pesquisa do Estado de Minas Gerais – Fapemig) – Research Project Code APQ00714-17 –, and by Coordination for the Improvement of Higher Education Personnel (Coordenação de Aperfeiçoamento de Pessoal de Nível Superior – Capes) – Finance Code 001.

Authorship SCIMAGO INSTITUTIONS RANKINGS

ABSTRACT

Purpose:

This paper aims to understand the configuration of strategic entrepreneurship practices of exploration, exploitation, and ambidexterity in craft breweries from Uberlândia, MG.

Originality/value:

Strategic entrepreneurship enables the comprehension of entrepreneurial phenomena from an organizational perspective. Furthermore, this research is conducted in an emergent industry in Brazil, with few studies in the field of management that consider the idiosyncrasies of craft breweries.

Design/methodology/approach:

We conducted a qualitative multicase study with three craft breweries from Uberlândia, MG. Twelve interviews were performed, and the set of empirical data collected were analyzed through narrative analysis technique.

Findings:

We identified several strategic entrepreneurship practices in the craft breweing sector. First, exploration practices were found in some radical innovations, such as the pioneering nature in the production of craft beers in Uberlândia, the creation of new products, and in the setting of new business models. Second, exploitation practices were also identified in incremental innovations that enabled business development. Hence, ambidexterity relied on the balance of exploration and exploitation practices, as innovative endeavors enabled the creation and development of new products and access to new markets. Thus, strategic entrepreneurship practices reflect the initiatives of entrepreneurial agents that seek to promote organizational innovations in terms of quality improvements, new production and marketing strategies, and the adoption of new technologies. Therefore, strategic entrepreneurship reflects and contributes to innovation possibilities, strategic renewals, and the competitiveness of craft breweries, revealing the analytical power of this theoretical approach for the study of entrepreneurial phenomena.

KEYWORDS:
Entrepreneurship; Exploration; Exploitation; Ambidexterity; Craft beer

	Brewery A	Brewery B	Brewery C
Founding partners	2 partners (a man and a woman - brothers in law)	3 partners (all men - father and two sons)	3 partners (all men - friends)
Number of employees	Factory (5) Bar (8) Temporary employees (10)	Factory (4) Bar/restaurant and Temporary employees (31)	Brewpub (20)
Years of operation	12 years	2 years	2 years
Initial productive capacity	2 thousand liters monthly	12,3 thousand liters monthly	18 thousand liters monthly
Productive capacity (2019)	16 thousand liters monthly	18 thousand liters monthly	20 thousand liters monthly
Interviewees	Founding partner Commercial manager Bar and restaurant manager	Founding partner B1 Founding partner B2 Production manager	Founding partner Brewmaster Sales coordinator

Case	Exploration
Brewery A	At that time [at the opening of the company], if I'm not mistaken, there were about 50 breweries in Brazil alone. We were the first in the Triângulo Mineiro [region], there never had been anything even close. We opened the factory in 2008 (Founding partner - brewery A).
Brewery B	My brother and I are civil engineers [...]. And in one of the jobs I was there [...], I went to Curitiba, and there is a very strong beer production [...], you have more contact with beer. Then I started doing it at home [...]. At the time, the market was not strong here [...]. So we saw an opportunity to invest. We were already sort of "leaning towards" this business (Founding partner B1 - brewery B).
Brewery C	We already liked beer a lot, you know, drank beer, these craft beers [...]. But then, from the moment we started to drink other types of beer, to be aware, the desire to make beer also arose. So I started making beer in 2016, homemade [...]. Then, we thought it was time to try to get busy in the market here in Uberlândia, which had been stopped for about 10 years, and that something new doesn't come out, you know? [...] And there came the idea of opening the brewpub (Founding partner - brewery C).

Case	Exploration
Brewery A	[...] when we opened it [...], we made a dark draft beer, which is our Schwarzbier, pure malt, and made a Pilsen. Then we made a Brown Ale [...] which is a middle ground between the two, she is not bitter (Founding partner - brewery A). [We created] a Weiss Bier [...], a Vienna Lager [...], a Double APA [...], a Fruitbier ... Usually Fruitbier are sweet, have the sweetest ending, but the [founding partner] chose to make a recipe that has a slightly bitter finish, which gives it a balanced taste. In this one, we use guava pulp [...]. So, it is an innovation for our region. [We also make] a Saison Farm House [...], an IPA and a Double APA that is more alcoholic and as bitter as an IPA [...]. There's Sour [...], [which] is a beer that goes lactobacillus, goes lactose, made to be really sour [...]. In Uberlândia, we were the first company to make Sour (Bar and restaurant manager - brewery A).
Brewery B	[Today] we create recipes exclusively for us: Stout, which is black beer, English IPA, America IPA, Pilsen and Weiss, and now, yellow IPA, New England (Production manager - brewery B).
Brewery C	We said: "man, let's bring a new proposal, a different IPA, an APA, a Witbier, that we didn't have here [...]. In the beginning, we ended up opting for these styles, the IPA [...], the APA, which is lighter than an IPA, less bitterness; a Witbier, which has a lot to do with Uberlândia, which is a beer to refresh. And a Lager, which is the Pilsen style with a little more hops (Founding partner - brewery C). [...] we created a Pilsen and a Hop Lager [...] more Americanized; it has a little more hops [...]. Here in the city a lot of people already drink IPA, so it was important for us to have our version of an IPA too [...]. And now there is a Double IPA, which is even stronger [...]. [There are] five fixed types and two or three seasonal ones (Brewmaster - brewery C). [...] We [...] did [...] the New England IPA, which has exploded all over the world. We were the first here in Uberlândia to make a New England IPA [...]. We are going to launch one now, another New England [...]. So that's it, we are bringing these innovations to the city in the beer market too (Founding partner - brewery C).

Case	Exploration
Brewery A	[...] what is most important in a beer? The recipe or the process? The process. You can have a fabulous, wonderful recipe, but if your process is bad, it will not work [...]. So I use a diatomaceous earth filter to do dry hop [...]. I use enzymes [...]. The use of enzymes helps to clarify, give a better performance, to reduce the foam during fermentation, among other things that nobody here has done (Founding partner - brewery A). [...] we are also starting to use different techniques, creating some things that we don't have here in Uberlândia. We are starting a production that will stay in the oak barrel to mature the beer. It has a different process, using lactobacillus at the beginning of production, so things are emerging now (Commercial manager - brewery A).
Brewery B	[...] Today, in Uberlândia, for example, we are the only ones with a candle filter (Founding partner B1 - brewery B). [...] We already had the idea of opening the bar [...]. It was an idea of a place that would only sell draft beer. And then there would not be this variety that we have in gastronomy, just like we have today in our restaurant, which is a restaurant and a tavern in a shopping mall in a city like Uberlândia, with 700 thousand inhabitants, something that no one has taken the risk here before (Founding partner B2 - brewery B).
Brewery C	[...] we have filling either in bottles or barrels and we are also implementing filling in cans. Can is also a very cool product, logistics and storage are much better, you have a larger area of communication [...]. Much better [than bottle], preserves for much longer, you lose less gas [...] and no competitor here in Uberlândia has tried it yet (Brewmaster - brewery C). We started with the brewpub [...]. Then we had a boom at the beginning, which is normal when it opens and such, but then we saw that it was starting to fall. Then, it came the idea for us to create the happy hour system, with a differentiated system here in the city, with cool promotions for the guy who comes here (Founding partner - brewery C).

Case	Exploration
Brewery A	[...] we started working on other types [of beer] [...], as we managed to increase some things in the factory [...] because we had a very structural restriction [...]. So, the improvement of the factory, the improvement of the bar, all of this contributed to the increase in productivity (Bar and restaurant manager - brewery A). [...] the best thing I did was [use the atomacia earth filter]. I had a very high hop waste, and now it takes everything away, the waste is almost nothing. You use hops up to the maximum. This improves efficiency and reduces waste (Founding partner - brewery A). [...] The manufacturing process, yes, [it has improved over time], in the filling and control process, this always evolves (Commercial manager - brewery A).
Brewery B	[...] We have tested an enzyme now. We are testing another enzyme to clarify the product [...]. So we had to add new technologies, new equipment, continuous improvement, right? All of this aiming at customer satisfaction (Founding partner B1 - brewery B).
Brewery C	Our capacity today is around 150 thousand liters per month. Today, we are close to 10% of what we can produce. What we need is just more fermenting tanks [...]. Our filling line is also sized for 30 to 40 thousand liters per month in bottle. Today, we produce 10% of this, 2 thousand, 4 thousand bottles per month, at most. But we designed the factory already thinking in the medium and long term (Brewmaster - brewery C). [...] we have several methods [for quality control]. The direct methods are with the same instrumentation. So I have some laboratory equipment to measure Ph, the density of beer gasification, and have a lot of sensory analysis. There, sensory needs the experience of the person who is tasting it, and it is not an easy job, people think it is easy, but it is not (Brewmaster - brewery C).

Case	Exploration
Brewery A	We have invested heavily in advertising, [...] to explore and solidify our brand as the first in the Triângulo [Mineiro region] (Founding partner - brewery A). Today, we have two sales paths here: one is to an independent distributor here [...], once the purchase is made, the product is theirs. And another one is the work I do, with delivery and events, other than selling at the [brewery A's] bar (Commercial manager - brewery A).
Brewery B	We invested a lot in marketing to promote it, you know? [...] We did a lot of promotion, understand? So we invested a lot in that [...] to boost the audience, right? Participated in events ... (Founding partner B2 - brewery B). [...] Delivery to almost all establishments in Uberlândia, right? Delivery too, all of that [...] Chopp ... And the bottle more for supermarkets and emporiums, bakeries, these types of businesses (Founding partner B2 - brewery B).
Brewery C	[...] the brewpub ended up taking a proportion that the partners did not even imagine. 60%, 80% of what we produce in the month ends up staying here, not leaving the factory. That's nice [...]. But we want to expand the brand, the beer, and that's what we're doing (Brewmaster - brewery C). In the first months the distribution started very slowly [...]. Today it has changed a lot. Today the market has expanded [...]. You find [beer C] in the main beverage distributors in Uberlândia and in several neighboring cities here in the Triângulo [Mineiro] region, reaching a market with a lot of potential (Sales coordinator - brewery C). [...] [The external sales team] already does all the training, for example, [you] will sell beer to a restaurant, so you will have to explain about the product, about the service, how to serve a bottle, how to store, at what temperature to serve etc., which one goes with that meal, we do all the training for the establishment (Brewmaster - brewery C).

Case	Exploration
Brewery A	We were the first [craft beer producer] in the Triângulo [Mineiro region] [...]. And we opened the factory here in 2008 (Founding partner - brewery A). [...] in the case of craft beer, the range of change is much greater. I can work an IPA, and the [competitor] works an IPA, they are beers of the same type, I make a blend with three types of malt, he can use and make a blend with three different types of malt, I work with one type of hops in the boil in a certain amount and the competitor works another of the same style, you have recipes that are totally different. So, the possibility for you to innovate is much greater [...] this alchemy in beer is much broader (Bar and restaurant manager - brewery A.)
Brewery B	[...] today, in Uberlândia, we are the only ones with a candle filter. There is no other factory here that has this model of equipment (Founding partner B1 - brewery B). Yes, we do intend to expand production. The idea is to increase everything here, to put a tank here. And here on the side, there is this land that belongs to the city [...] and we have already started the process there to buy the city's land (Production manager - brewery B).
Brewery C	[...] there wasn´t [a brewpub] in Uberlândia [...] But that was the idea, opening a brewpub (Founding partner - brewery C). [...] We were the first ones here in Uberlândia to produce a New England IPA, which was sensational, which ended in 1200 liters, we sold it in 17 days [...] We will launch a new one now, this coming weekend again, another New England [...] we're bringing these innovations to the city in the beer market too (Founding partner - brewery C). [...] I'm already talking to the people who developed the equipment for us to see if they can assemble more specific equipment [...] to increase efficiency. For example, [...] I don't have the physical separation between yeast and beer, I have to wait for the yeast to decant over time [...], and there are some filters that I can retain the yeast [...]. So I'm developing these filters with the manufacturers (Brewmaster - brewery C). We strongly believe in the quality of the product, [...] that we are delivering a different product that people have already drunk here in the city [...]. a different experience, you know? [...] an environment that is also attractive, that is comfortable, has a nice service is also something different from the final delivery of the product. And then you adapt this type of process more to improve efficiency (Brewmaster - brewery C).

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This study was funded by the Research Support Foundation of the State of Minas Gerais (Fundação de Amparo à Pesquisa do Estado de Minas Gerais – Fapemig) – Research Project Code APQ00714-17 –, and by Coordination for the Improvement of Higher Education Personnel (Coordenação de Aperfeiçoamento de Pessoal de Nível Superior – Capes) – Finance Code 001.