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

Abstract

Abstract 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 (Natürlichkeitsgebot). 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.