Illicit innovation and institutional folding: From purity to naturalness in the Bavarian brewing industry

We take an institutional perspective to examine how innovation thrives under conditions of resistance. Specifically, we conceive illicit innovation as a process of successive institutionalization of a new practice in the face of contrary law. In the German federal state of Bavaria, the global movement of craft-beer brewing collides with a regional jurisdiction that prohibits precisely these brewing practices and instead protects the traditional institution of purity-brewing (Reinheitsgebot). Grounded on an embedded qualitative case study of brewers and industry representatives, we build a theory of institutional folding of new norms and practices over established ones. This way, creative brewers have succeeded in legitimizing new practices of naturalness-brewing (Naturlichkeitsgebot). Whereas the legal resistance has stimulated brewers to create an original counter-institution, the illicit innovation has also begun to change the institutional context of the beer industry in Bavaria.

Automated summary

The study examines the development of innovation under conditions of resistance in the beer brewing industry in Bavaria. Illicit innovation is seen as a process of gradually institutionalizing new practices in the face of contrary laws, with creative brewers successfully legitimizing new practices through folding new norms and practices over established ones. Legal resistance has stimulated the creation of an original counter-institution, leading to changes in the institutional context of the beer industry in Bavaria.