Questioning the Cluster Imperative: Why Danish Craft Breweries Choose not to Cluster Geographically, and What (not) to Do About It

We investigate location factors of craft beer firms in a region in Denmark, an industry characterized by intense, incremental innovation activities. Regarding the actual location we find that firms are located almost as far away from each other as possible. These location patterns are apparently better explained by traditional theories on firm location focusing on competition and rivalry, and cost effectiveness regarding factor inputs and getting products to markets, compared to theories that prescribe that firms should cluster to leverage on knowledge exchange and other agglomeration advantages. We contribute to the constructive criticism of the universal application of the idea of clusters in regional policy. We discuss special features of the beer market and -products that contributes to explaining why firms in this industry seem to abstain from clustering. On the other hand, we also point to that firms, despite being physically distant – or perhaps because of this – pursue activities that resembles the close interactions seen in clusters. In this sense, we forward the proposition of breweries simultaneously locating according to a ‘sharing of market’ logic and still pursuing knowledge exchange activities, however, the latter being located away from the physical production facilities.
These findings have implications for regional innovation and cluster policies as they call for a more nuanced understanding of the role of place in policies for some industries. In turn, it questions a strict division of labor in policy processes between national, regional, local entities.