Organisational resilience and dual external shocks – evidence from beer industries in Wales, Ireland and Denmark

We study firm-level resilience against external shocks in the beer industry in three different environments, Wales, Ireland, and Denmark. Specifically, we pose in this paper the research question what the global COVID-19 pandemic, Brexit, and the Ukraine war caused firms to do in terms of coping with these crises and sudden changes in demand, production costs, and transaction costs. This study context is different from earlier periods as these external shocks occur shortly after each other and have overlapping effects. Earlier literature is related to stand-alone events.
In the beer industry Covid first caused significant reduction of sales to pubs, bars, taprooms and cancellations of festivals and similar events. Brexit and the Ukraine war added adverse effects on supply chains, prices on raw materials and energy, and increased transaction costs. We research the reactions to changes in inter-organisational collaboration, distribution, internationalisation, product innovation, sales etc. caused by these external shocks, and we investigate the possible recovery of these activities as well as the shocks’ possible lasting effects on business models of the microbreweries.
Previously, the impact of crises such as Covid on SMEs in general has been investigated. Yet, there is a lack of research on how it evolved in specific industries and in specific countries and regions. Even within the same industry and country there are differences in how Covid influenced the economy at different levels of aggregation. We contribute to the literature on resilience in this industry where small firms arguably were particularly hit by the crises. Although organisational resilience is core in our analyses, we acknowledge that resilience is a multilevel phenomenon and elaborate on the role of regional contexts for how organisational resilience unfolds.
By comparing countries where national and regional strategies have developed differently, in Wales, Ireland, and in Denmark, we furthermore provide new insights on the contextual impact on firm-level resilience strategies. We emphasise theorising and the conceptualisation of the means of coping with crisis and how organisational change interacts with regional endowments, policies, and other contexts. We add insights from our empirical studies of firms in the industry using qualitative methodologies to explore at the micro level of aggregation, how small-scale businesses in the sector are embedded in their localities and mobilise, as well as jointly co-create, local and regional assets. A further contribution of the paper is that it details the actual crisis management measures deployed by firms in this industry.
We find that although there are means to cope with the crises and to increase resilience that are common to all craft beer firms, we also conclude, in line with recent literature, that there is a huge diversity in responses to the same type of external shocks. Previous literature on organisational resilience has primarily talked about resilience on a high level of aggregation. Zooming in, we illustrate that even in this narrowly defined industry we find a large diversification in these strategic responses. We posit that part of the explanation for this result, is whether or not the firms’ organisational agility and change management ability is geared to the needed changes and can timely pivot the existing business model. Another part of the explanation relates to the financial and mental ability amongst owners to endure the effects of long and repeated crises.
The results in the paper have implications for organisations, policies, as well as the crisis management literature.