Circularity of resources in the craft brewery segment: an analysis supported by innovation

doi:10.21203/rs.3.rs-2451499/v1

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Circularity of resources in the craft brewery segment: an analysis supported by innovation

https://doi.org/10.21203/rs.3.rs-2451499/v1

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published 15 Oct, 2023

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This article analyzes how the circularity of resources occurs in Brazilian craft breweries supported by innovation and proposes the creation of alternative craft breweries to promote circular economy. Data were collected through 11 interviews with entrepreneurs in the craft brewery segment, checklist application, and access to the website of the cases investigated. Our results expand the relationship with innovation suggesting that: a) the circularity of resources is still focused on several long-cycle practices; b) short cycles, which are the most desired for the retention of resource value in the production chain, are already present, but demand more attention from the enterprises surveyed; c) innovation practices can become barriers to or drivers for the feasibility of circular economy in the beer context; d) technical cycles are consolidated in most of the researched cases, while biological cycles still demand greater engagement from all stakeholders; e) the nature and content of circular practices imply different adoption stages in the cases investigated; f) companies invest in strengthening the relationship with consumers and suppliers in order to obtain support for current circular strategies in their ventures.

Sustainability

Circular Economy

Innovation

Circular economy and innovation are two theoretical constructs that are closely related. They are considered elementary for the success of the circularity of resources and the retention of value in the production chain (Bocken & Ritala, 2021). They are spreading rapidly and are present in several productive sectors (Mostaghel & Chirumalla, 2021). This is highlighted by the expectation of the creation of ISO TC 323, to be officially launched in 2023, which should bring together a set of guidelines and recommended practices for managing circular economy in public and private organizations at the global level (ABNT, 2021). The circular economy's potential to create, deliver and capture value for business models becomes greater when this approach is included in the company's strategy (New Climate Economy, 2018); it should be included as a central element in the strategic planning, in the mission statement, commitments, goals and plans to increase the circularity of resources, implying the reduction of internal waste while improving products and processes and encouraging innovation (Ellen MacArthur Foundation, 2019; Lacy, Long, & Spindler, 2020).

Although we have several studies related to innovation and circularity, for example, Greer et al. (2021), Borowski (2021), Hankammer et al., (2019) and Rattalino (2018), there are still gaps in the understanding of how and why the most innovative companies tend to adopt more CE practices. So, the premises that supported this doubt, may be associated with a resource-based view, as a driver of circularity and a promoter of resource regeneration, as organizational culture and family businesses tend to make a company more proactive.

Therefore, organizations need to put the circular economy at the center of their strategy (Borowski, 2021) if they want to again sustainable competitive advantage from the strategic allocation of organizational resources (Julkowsky, 2021). This will become a necessary framework for survival and networking (Kowalski and Makara, 2021). Nevertheless, the Ellen MacArthur Foundation promulgates that the circular economy has the potential to save trillions of USD, thus enabling new jobs, opportunities for social inclusion and reducing the negative effects of production systems (EMF, 2015). Therefore, in addition to environmental issues, it has the potential to contribute to the socioeconomic pillar. This is what makes circularity attractive for enterprises in different productive segments (Donner & Vries, 2021).

However, isolated and disconnected practices performed by organizations are insufficient to comply with the implementation of the circular economy (Sehnem et al., 2020). Furthermore, circular economy is only enabled in a systemic way, that is, it demands the engagement of all actors in the production chain, so that collaborative networks and circular ecosystems are built (Donner and Vries, 2021). In this context, innovation plays an important role (Mead et al., 2020), as it generates alternatives that can supply deficiencies in the management of organizational resources (Hofmann and Jaeger-Erben, 2020). Process optimization is seen as an important alternative, and efficiency and continuous improvement are also considered elementary (Cainelli et al., 2020).

On the other hand, product and process innovation can serve as supporting elements of the company’s vision based on the strategic resources that generate competitiveness. Likewise, radical and incremental innovation are necessary for the craft brewing industry to advance in the process of implementing circular economy principles and practices. Some brewing companies are performing different types of innovations, either because they are proactive, or market leaders, or even because there are public policies that encourage the promotion of innovation.

However, there are still legal weaknesses, since many countries, like Brazil, do not have specific legislations that support the implementation of circular economy (Sehnem et al., 2020). Nor are there legal requirements that require the company to adhere to circular guidelines (Sehnem et al., 2021). The adoption of circular practices will require innovation and investment in a variety of sustainable technologies as shows Bansal et al. (2020), as well as radical changes in current practices in the operating systems of industrial sectors. Unfortunately, most circular practices take some time to generate economic and social results (Pieroni et al., 2021). In addition to the lack of immediate financial rewards, circular practices require heavy investments in implementation, and maintenance and monitoring can become expensive for small and medium-sized enterprises (Cainelli et al., 2020). This already shows a concern about the impact of costs on the competitiveness of enterprises and can often lead to the postponement of actions in favor of the environment. However, the theory of innovation suggests that companies that voluntarily engage with new alternatives, be it product, process, marketing, or organizational innovation, obtain superior results and guarantee access to markets that are necessary for their survival.

In this sense, organizations can adopt circular practices in response to the demands of society and take advantage of initiatives that involve engagement, networks, partnerships, collaboration, and performance through an ecosystem to expand and accelerate the transition towards circular business models (Sehnem et al., 2019a). Circular practices that are committed to the technical cycle, that is, dematerialization of durable products; and biological cycle, i.e., dematerialization of organic products, are already a reality in many organizations. However, short-cycle practices, that is, those that demand less time and fewer processes for dematerialization and reintroduction into production chains, are the most desired. The long-cycle practices, that is, those that encompass procedures such as recycling steps, with the expenditure of more considerable resources for the circularity of materials, are the least desirable in production processes.

However, despite the public corporate endorsement of the finitude of natural resources, many companies still need to be aware of the urgency of engaging with practices in favor of sustainability (Frare et al., 2020). The craft brewery segment is aware of this scenario. It is already engaging with circular practices and looking for alternatives that will enhance its organizational competitiveness, especially considering the context in which these enterprises are inserted; being most commonly family businesses, they usually make use of family labor and serve mainly local customers. In this way, they show a business model that has shorter cycles of value retention and that are aimed at circular economy. These businesses make nutritious food for consumers, contribute to the improvement of quality of life, and are usually linked to leisure ventures, providing healthy alternatives for the local population. Considering this diversity of elements that contribute to the dissemination of circular economy practices, the research question supported the development of this article is: How does the circularity of resources occur in Brazilian craft breweries supported by innovation?

In this context, the objective of this study is to analyze how the circularity of resources occurs in Brazilian artisanal breweries supported by innovation and to propose the development of alternative artisan breweries to promote the circular economy. We know that several previous studies have already investigated elements associated with the circularity of resources, for example, Kaszycki et al. (2021), Refsgaard et al. (2021), Vermeulen et al. (2020), Gebremariam et al. (2020), Mahjoub and Domscheit (2020), Heller et al. (2020), Weissbrodt et al. (2020), Muscio and Sisto (2020), Bonsu (2020), Konietzkoet al. (2020), among others. But the specificities of the craft beer segment are interesting and appropriate for the expansion of this debate. And there are few studies that have addressed circularity in the craft brewery sector (Barbieri et al., 2021; Sehnem et al., 2021).

Overall, the literature converges on an appeal to scholars to better clarify the involvement of different actors in the development of responses to the implementation of a successful circular economy in organizations (Yunan et al., 2021; Milette et al., 2020; Gavertsson et al., 2020, among others). But there are still opportunities to highlight the role of innovation as a provider of useful arsenal for the success of circular economy (Konietzko et al., 2020). We argue that a more subtle and dynamic perspective is more necessary than those currently used to demonstrate the circularity of resources. Previous evidence-based studies on the implementation of circular economy suggest that factors that may be barriers in implementing the circularity of resources have also provided drivers for developing alternative capacities to deal with circular economy (Tan et al., 2021; Salmempera et al., 2021; Gue et al., 2020). Likewise, aspects that encourage adherence to circular economy, such as the capacity for innovation and innovative management, can also become barriers to the adoption of the circular economy, since they will make companies oppose the replacement of incremental improvements to adhere to disruptive innovation and transformative innovation, which the circular economy requires. In this sense, this study expands the current knowledge on the topic.

The Resource-Based View (RBV) (Barney, 1991) instead of (Peteraf, 1993) is a theoretical framework that supports scientific investigations (Grant, 1991) that address the role of resources and capabilities in different contexts (Barney, 1991), including the scope of innovation (Andersén, 2021). It ensures the performance of companies and relational resources, that is, resources shared with stakeholders (Henard & McFadyen, 2012). In turn, Natural Resource-Based View (NRBV) emphasizes how resources affect the natural environment (Hart, 1995). Therefore, RBV can offer a relevant conceptual framework for strategic management (Terziovski, 2010) and product innovation (Andersén, 2021).

NRBV, on the other hand, focuses on analyzing the environmental impacts of companies' resources and the processes associated with them (Hart and Dowel, 2010). In the context of circular economy supported by innovation, NRBV helps the company to obtain a competitive advantage, furthermore, its actions and practices favor the environment (Andersén, 2021). This illustrates that both resources and organizational capacities influence the overall performance of the company and contribute to the implementation of strategy, so that it can differentiate its products from competitors’ (Peteraf & Barney, 2003). In this context, differentiation plays an important role (Ray et al., 2004).

Relational RBV, on the other hand, recognizes the importance of resources that are shared with other companies (Lavie, 2006). In this sense, suppliers are highlighted for the creation of an innovative product (Adomako et al., 2019). In the context of the circularity of resources (Mellquist et al., 2022), it becomes strategic to identify green suppliers engaged with the perspective of resource regeneration. These elements will provide the necessary condition for obtaining a differentiation advantage (Andersén, 2021).

Innovation plays an important role in the success of the circular economy (Borowski, 2021). It enables the implementation of sustainable business models that seek to use waste as resources (Sideris and Poldner, 2021), transform losses and waste into raw material, and create second use, third use and fourth use for materials that were extracted from nature and that require transformations to become useful in new productive cycles (Mostaghel & Chirumalla, 2021). It combines systemic design, technical, and commercial innovation, with the development of business models for the remarketing of goods (reuse) and the extension of the life cycle of goods and components through remanufacturing and updating (Carraresi and Bröring, 2021). It encourages local jobs, short cycles, improved management, conservation of resources, and product longevity, and strives to minimize waste (Pieroni et al., 2021).

In addition, innovation serves as an important insight for the redesign of products, processes and services (Brown et al., 2021). It generates opportunities for the continuous creation of value (Ritala et al, 2021) and for the prospect of lasting relationships with customers and users of products and services (Kahupi et al., 2021). It inspires the creation of new circular business models, i.e., rethinking the system of accessing products and offering services to society (Pieroni et al., 2021). Above all, it requires a change in the mindset of both producer and consumer. It creates a society that will survive by making choices different from those made by their parents and grandparents. It shows paths and the possibility of disruption, transformation and societal changes in favor of sustainability (Fehrer & Wieland, 2021).

Moreover, innovation emphasizes the capacity for exhaustion of nature and strives for the capacity for recovery and regeneration offered free of charge by nature (De Angelis, 2021). It highlights the need for and importance of reducing the toxicity of products in favor of health, well-being and longevity (Kowalski & Makara, 2021). It promotes resource productivity, associated with its finitude and scarcity (Sehnem et al., 2019a). It strives for dignity, democracy, security, employment, social integration, and preserved labor rights. It understands that education and knowledge, associated with ethical values, are the driving force behind the adoption of attitudes in favor of risk management within the scope of sustainability (Crecente et al., 2021).

In this context, innovation in design and production technologies can reduce the use of natural resources (Sehnem et al., 2019b) associated with closed loops, in which all the outputs return to nature as nutrients in another manufacturing process. This type of innovation also focuses on reducing dependence on finite resources and extracted directly from nature. Furthermore, the adoption of business models with a continuous flow of services corroborates the increase in productivity and longevity of products (Donner & Vries, 2021). Finally, innovation can also promote eco-efficiency and leadership for positive goals (Gavrilla et al., 2021). In this sense, different alternatives appear to contribute to the progress of circular economy, such as Reike, Vermeulen and Witjes’ (2018) 10Rs, which highlights the order of priority to increase the value retention of resources in the chain (Sehnem et al, 2019d). Or even, the drivers of the circular economy (Kalmykova et al, 2018), which comprise circular supply (Berlin et al., 2022), waste as a resource, second life, sharing platforms and service as a product. Finally, economic and environmental benefits, closed-loop supply chain (Fu & Meng, 2020), and circular economy have been drawing the attention of enterprises around the world (Sehnem et al, 2019d), supply chain management (Hardy et al., 2020), building novel supply chain theory (Stephens et al., 2021) and collaboration bargaining in supply chains (Narimissa et al., 2019) in emerging economies (Adhikari, 2020). Although there is a theoretical current a critical examination of the interrelatedness between circular economy and growth, how seen something impossible (Kirchherr, 2022).

This study collected data from 11 units of analysis, namely, craft breweries in southern Brazil. The organizational actors investigated were the owners and / or managers of the craft breweries. Therefore, the criteria adopted for choosing the research participants were: (i) being associated with ABRACERVA; and (ii) agree to participate in the research. The step-by-step approach to carry out the research consisted of making an initial contact with the Brazilian Association of Craft Breweries. In total, 57 companies were contacted. From this initial contact, some indications of other businesses to be researched were received. An email was sent to these companies to invite them to participate in the survey. Subsequently, the time and day of the visit were scheduled by telephone. The visit was carried out in loco, with permission to visit to the physical infrastructure of the craft breweries. Eleven entrepreneurs/managers agreed to participate in the research. We chose Brazil because the country has stood out as a leader in Latin America concerning the growth of craft brewery ventures, including several award-winning products in contests held in the segment. Plus, southern Brazil stands out for being a region that offers courses of excellence for master brewers and also hosts important national and international competitors in the beer segment.

Brazil is the second most innovative craft beer market in the world, only behind the United States (Datawraper, 2021). The disruptive brewery is a brewery that see innovation as a way to differentiate in the market (Guia da Cerveja, 2019). The context of Brazilian brewing companies represents an extensive network that is responsible for 14% of the national transformation industry of goods and services (Associação Brasileira da Indústria da Cerveja, 2020). Considering the choice for the craft brewery sector in Santa Catarina, it is the fourth state in number of craft breweries registered in MAPA in 2019. Currently, the state presents the best brewery per population density ratio and the second best breweries per territory ratio, demonstrating the proximity between the population and beer production sites (Associação Brasileira de Cerveja Artesanal, 2020).

Furthermore, the rapid dissemination of local breweries shows the service is provided to local customers, which is consistent with the assumptions of short production cycles proposed by the circular economy. The interviews were based on a script (see Appendix A), supporting the theoretical framework of innovation as a basic element for the circularity of resources in the beer production chain. This roadmap was pre-tested by three specialists in circular economy and two specialists in innovation. The questionnaire included 13 questions divided into three groups, namely, business model, practices, and innovations. Table 1 shows the profile of the interviewees and their companies.

TABLE 1 Overview of interviewed subjects and enterprises

Position	Scholarity	Gender	Code	Years in The Enterprise	Production per Month	Coverage
Owner	Postgraduate	M	BCB01	3 years	8 thousand liters	Local
Owner	Postgraduate	M	BCB02	8 years	12 thousand liters	State
Owner	Postgraduate	M	BCB03	8 years	12 thousand liters	Local
Brewmaster	Postgraduate	M	BCB04	2 years	6 thousand liters	Local
Brewmaster	Postgraduate	M	BCB05	5 years	10 thousand liters	State
Owner	Postgraduate	F	BCB06	3 years	140 thousand liters	South Region
Owner	Postgraduate	M	BCB07	5 years	500 thousand liters	National
Owner	Postgraduate	M	BCB08	4 years	140 thousand liters	State
Owner	Postgraduate	M	BCB09	7 years	140 thousand liters	South Region
Brewmaster	Postgraduate	M	BCB10	10 years	500 thousand liters	National
Brewmaster	Postgraduate	M	BCB11	5 years	120 thousand liters	South Region

Source: adapted by Julkovski (2021)

All respondents are postgraduate and of the 11 companies surveyed, only one has a female owner. This shows that the profile of entrepreneurs in this industry corresponds to highly educated individuals, i.e., they have a higher level of academic training than most companies in southern Brazil. The interviewees show an important academic expertise to embrace new business models and opportunities aligned with circular economy. We identified other previous studies that also adopted small samples to carry out qualitative studies, such as Morais et al. (2021), Sehnem et al. (2019d), Campos and Vazquez-Brust (2016), Choudhari et al. (2012), and Teixeira et al. (2012).

For the categorization of the surveyed companies, i.e., Brazilian craft breweries, the code BCB (Brazilian Craft Brewery) is used, plus the number that corresponds to the sequence in which the visits occurred. The monthly production of the surveyed companies varies from 6 thousand liters to 500 thousand liters, which have local, state, regional (southern Brazil), and national coverage.

In addition to the interview script, a checklist (Appendix B) containing a set of circularity and innovation practices was applied. This data collection instrument aimed at identifying which are the circular practices that the enterprises adopt and their adoption stage, if nonexistent, executed, managed, established, predictable or optimized.

Data collection for this research was carried out in November and December 2020. Each interview lasted approximately 45 minutes and the full transcription of the interviews generated 97 pages. And an on-site visit was made in each of the ventures surveyed, which lasted approximately 1 hour in each. This visit allowed the generation of a field diary with relevant notes. In addition, for each of the 11 projects surveyed, a checklist of six pages of circular practices and innovation was applied. In addition, notes on important topics were made during the interviews to analyze the data effectively and as recommended by Mulhall et al. (2003) and Phillippi and Lauderdale (2017). Thematic analysis was chosen to assist in the identification and analysis of patterns in qualitative data, as recommended by Braun and Clarke (2006). Based on the information from the interviews, the consolidated data from the application of the checklist, and access to the website of the craft breweries, divergences and similarities were identified and interpreted based on the theoretical foundations selected to conduct this study. Five procedural steps were followed, namely, Step 1- Recording raw data (primary sources): in total, 11 managers were interviewed. From the beginning of the collection, the interviews were recorded with the authorization of the legal consent and, immediately, transcribed in full. Step 2 - Immersion in the data: a floating reading of the data obtained through the interviews was carried as they were being conducted. Step 3 - Compilation of the individual analyzes of each interview and thematic grouping: when performing the floating reading, the themes Circularity practices, frequency of adoption circularity practices, Biological and technical cycle practices, innovation practices and most relevant circular economy practices in the supply chain. were organized through colorimetric coding. Step 4 – Allocation of themes and types of statements in a table: the presentation of data in a table allowed the identification of the regularity of the findings in the statements, according to the themes, and the verification of the consistency of the statements (Table 1), in that “P” is the practice and “BCB” the codename of interviewed. Thus, with the application of the colorimetric method, responses related to practices adopted were highlighted in 0= Nonexistent, 1=Executed, 2=Managed, 3=Established, 4=Predictable, 5=Optimized. Step 5 – Finding the theoretical saturation of the data by identifying the absence of new elements in each table.

According to O'Reilly and Parker (2012), the adequacy of the sample should not be determined only based on the number of participants, but mainly on the adequacy of the data. The authors cite the example of discourse analysts who prefer small datasets as they are more appropriate for their mode of investigation and cite the works of Hutchby and Wooffitt (2008) and Have (2007), which allow to substantiate that there is literature on how to manage decisions in the research process, using punctual interviews without compromising the quality of the results. In the present study, theoretical sampling can also be used to make comparisons between findings, facts, perceptions, places, people, etc. and pre-existing concepts, aiming to find variations between concepts and phenomenon. Also, we used categories defined a priori (Strauss & Corbin, 2008).

Although this study followed an acceptance sample, that is, those who agreed to contribute to the research, it meets the assumptions of theoretical saturation. theoretical saturation is an important element of qualitative research. As Strauss and Corbin (2008) point out, if the researcher keeps on searching, he/she will always find additional properties or dimensions, there is always potential for the emergence of the new. Thiry-Cherques (2009) recommends a minimum of eight observations, requiring two observations after finding the saturation point for confirmation. This author also found that, in social sciences, the saturation point usually occurs until the 12th interview. Another study published on the subject is by Guest, Buncem and Johnson (2006), where the authors had already found that saturation occurs around the 12th interview and, in addition, they affirm that central categories tend to appear until the 6th interview. Considering that in our study, from the sixth interview onwards, the main categories were saturating, it was not necessary to carry out 12 interviews. Therefore, it was decided to conclude the collection with the eleventh interview.

The classification of practices that characterize the technical cycle and biological cycle was carried out following the categories proposed by Sehnem et al. (2019c) and Sehnem, Campos, Julkovski and Cazella (2019b), namely:

- Non-existent: practices are not implemented or do not achieve their purpose.

- Executed: practices are implemented and achieve their purpose.

- Managed: practices implemented, processes executed, and products established and controlled; all three are managed, monitored and adequate.

- Established: managed practices that adhere to standards, norms, or best practices.

- Predictable: established practices whose results are measured and controlled.

- Optimized: predictable and critically analyzed process, continuously improved.

Likewise, to analyze innovation practices, we utilized the adapted classification by Sehnem et al. (2019c) and Julkowsky (2021), which includes the steps:

a) Non-existent: practices are not implemented.

b) Awareness: the management of innovation practices is unstructured and ill-defined. Process measures are not implemented, process performance is unpredictable, and objectives, if defined, are often overlooked. The costs of innovation maturity are high, both in functional, financial and managerial terms.

c) Defined: the basic innovation maturity processes are defined, but remain obscure, elementary and very simple. Process performance is more predictable and goals are set, but frequency is still lacking. Innovation maturity costs remain high, frustration is still present and satisfaction, although better defined, is still low.

d) Linked: at this level, innovation maturity is implemented in processes with strategic intent and objectives. Process performance becomes more predictable and objectives are often met. Continuous improvement efforts take shape and emphasize the elimination of root problems and the performance of improvements. Costs start to go down and feelings of teamwork take the place of frustration. Innovation Actors are included in process improvement efforts and their satisfaction starts to show marked improvements.

e) Managed: Innovation actors achieve a perspective of wholeness based on wise and purposeful judgment. Innovation maturity management measures and systems are deeply embedded in the organization. Advanced innovation maturity practices such as creative imagination, collective engagement and collaboration take shape. Process performance becomes predictable, and targets are reliably achieved. Process improvement goals are collectively defined and achieved with confidence. Innovation maturity costs are drastically reduced, and satisfaction and community spirit become a competitive advantage.

f) Sustained: Advanced innovation maturity practices that allow self-responsibility are implemented. Actors of process innovation with goals and broad authority take shape. Trust, mutual dependence and community spirit are the ways that support the different actors. A creative and collaborative culture is firmly entrenched. Process performance and system reliability are measured and sustained with joint investments and system improvement is shared, as are the returns. This is the beginning of a successful journey of networking innovation.

To attest to the quality of the research project, the guidelines proposed by Yin (2010) were considered, as shown in Table 2.

TABLE 2 Quality of qualitative research

Observed Aspects	Descriptive
Construct validity	Through the identification of operational measures, namely multiple sources of evidence (in-depth interview, website, folders and technical reports), the establishment of an evidence chain, the mapping of key informants for the review of the draft study report case. The studies by Sehnem (2011), Campos and Vazquez-Brust (2016), Jabbour, Maurício and Jabbour (2017) and Sehnem et al. (2019) also make the same combinations for conducting a case study.
Internal validity	Relationships were established between certain conditions that lead to other conditions, allowing the establishment of relationships among the study constructs. The study tactics adopted were pattern matching and the use of logic models.
External validity	The domain to which the study's findings can be generalized has been covered by using theory in single case studies. The desired generalization for the case study is the analytical one and was covered in this study through a set of results that allowed the generalization of a broader theory.
Reliability	To demonstrate that the operations of a case study, as per procedures for data collection, can be repeated with the same results, the case study protocol and the development of a case study database were used. Therefore, all design quality assumptions recommended by Yin (2010) were followed to conduct this study. This allowed the elaboration of an integrated single-case project, which made use of multiple units of analysis.

To conduct the data analysis, codenames were adopted for each unit of analysis. These codenames start from BCB01 to BCB011. We followed Ellen MacArthur Foundations' ReSolve framework to code circularity practices. The practices adopted were mapped in loco and classified by the interviewee as 0 = Nonexistent, 1 = Executed, 2 = Managed, 3 = Established, 4 = Predictable, and 5 = Optimized. Thus, they were presented as such in our study.

In addition, we carried out an analysis on the existence of technical and biological cycles in the researched enterprises. These data were mapped using a form applied to the interviewees and were classified as 0 = Nonexistent, 1 = Executed, 2 = Managed, 3 = Established, 4 = Predictable, 5 = Optimized.

With regard to innovation, the practices were mapped from a systematic review of the literature carried out in a previous study, which allowed to know the innovative practices that can be adopted in the context of circular economy implementation. These practices were fundamental to the construction of the data collection instrument applied to the interviewees. The innovation practices mapped were classified as 0 = Nonexistent, 1 = Awareness, 2 = Defined, 3 = Linked, 4 = Managed, 5 = Sustained.

4.1 Circularity Practices

All companies surveyed have practices related to the circularity of resources, whether in production, waste management, process optimization or the use of alternative materials to replace traditional ones. The most adopted practices in terms of circular economy are water reuse, installation of solar panels, reuse, effluent treatment, use of biological materials derived from the brewing process for gastronomic use, i.e., for bread and cookies production. In addition, interviewees also mentioned the use of renewable and recyclable materials in manufacturing and packaging and the reduction in the consumption of traditional energies (Table 3).

Table 3 shows that the regeneration of materials is centered on recycling, which is understood as a long cycle practice and not so desired for the retention of resource value in the production processes. There is a constant commitment to the separation of recyclable and organic waste. Although composting for organic materials is not yet a reality for most of the cases studied. Six artisanal breweries have partnerships with associations of waste pickers or cooperatives, which shows a social commitment to the inclusion of people through the practice of sorting materials for recycling. This allows generating income for this professional class. Above all, it meets the guidelines of Brazil's national solid waste policy, which affirms that the collector is an actor who must be present in the solid waste management structure. Finally, the use of clean energy is an element highlighted by several interviewees, which signals the commitment to the generation of productive chains capable of contributing to a circular supply. Meanwhile, reverse logistics is still considered a weakness in the ventures surveyed.

Regarding the sharing assumption, it is clear that the practices of servitization and product service system are still unknown by the researched enterprises. Renting, sharing, making use of concessions are still non-existent practices in the cases researched, as well as the acquisition of remanufactured products. Something to think about if the circular economy and economic grow are compatible (Bauwens, 2022), because demand a lot of investments, infra-structure and people engagement and conscious. However, the practices included in the short cycles, namely, repair and reuse are consolidated and used frequently. Furthermore, extending the life cycle of products (Turner et al., 2022) through maintenance, acquisition of objects with design for durability and updating versions of products previously acquired, are also consolidated practices in craft breweries. These findings show that even though sharing is still incipient in the enterprises analyzed, there is evidence that some practices adopted are consistent with short cycles, which is very desired for a successful circular economy. As for optimization, they are internalized practices in the researched craft breweries, whether through continuous improvement practices, waste reduction, maximizing the use of resources supported by technologies, closed water cycle, or high precision technologies, as also shows Zisopoulos et al. (2022). Only BCB01, 02 and 03 adopt some practices at level 4 (predictable). Regarding process virtualization practices, it is clear that the use of online channels for communication, advertising and marketing are already a reality in most cases. While the commercialization of production via e-commerce is only present in two cases and still with little representation. Applications and digital media are already more widespread, with representativeness in three cases and a notable presence in three more. Three companies still do not adopt these electronic devices for making purchases and sales, which signals an opportunity to be explored towards circular economy.

In terms of exchanging, adherence to new technologies is a practice adopted unanimously by enterprises investigated. The focus on choosing technologies that use less energy and are more efficient is also highlighted by those surveyed. There is also a concern with the origin of resources used in production. Whereas 3D printing exists, but incipiently and can become an important practice in the medium term. The interviewees reported that they want to make packaging, production and storage artifacts feasible. And contribute to the environmental sustainability (Superti et al., 2021) and reduce resource consumption (van Stijn et al., 2021) Thus, Table 4 presents the frequency in which the practices are adopted in the investigated cases.

Table 4 points out that most practices are adopted daily in the cases surveyed. Some cases, such as BCB03, 04, 05, 07, 08, highlighted that they do not remember the frequency of adherence to circular practices. Failure to remember the periodicity of practices indicates they are not constantly put in practice. This refers to opportunities to create internal policies that strengthen the circularity of resources, as part of the core business of the investigated companies. Next, Table 4 presents the practices that are aligned with the technical and biological cycle, which were noted in the investigated cases.

According to Table 5, the technical cycles are internalized and consolidated in most of the investigated cases, with emphasis on the malt packaging bags, lids, cardboard, various packaging, and glass. BCB03 is the enterprise that has the greatest potential to evolve regarding the adoption of practices that are consistent with the assumptions of the technical cycle, followed by BCB04. As for biological cycles, its presence is also notorious, with emphasis on the efficient management of malt husks, malt bagasse, residues derived from grinding, the rest of hops, trub (leftovers from the boiling process, including particles of hops, leftover malt and coagulated proteins), yeast, and closed water cycles. The biological cycle of BCB07 shows greater potential to evolve with the improvement of these practices. BCB 09 points out that by adding sustainability to biological factors, even though they are very difficult and complex elements to work with, it is possible to practice the ideas from cradle to cradle for the reuse of all residues in animal and human food, as well as compost for fertilization of the crop.

4.2 Innovation Practices

Table 6 presents the innovation practices that were identified in the companies surveyed.

Regarding the innovation identified in the companies, there is a concern to adhere to practices that allow the development of products that are not aggressive to the environment. There is an engagement with practices that encourage the creation of an organizational culture that enables the establishment of a routine to develop innovation with constancy and commitment. At the same time, innovation is focused on reducing costs and reducing product manufacturing times. The programmed obsolescence is overcome by means of replacement practices, often supported by disruptive technologies in the sector. An example would be the use of inputs that make it possible to manufacture vegan beer. There is also a concern to adhere to sustainable innovation, focused on creating a personalized innovation strategy, which allows to dictate trends, that is, to be a leader in the sector of operation. In this sense, emphasis is given to BCB02, 06, 07, 08, 09, 10 and 11.

The innovation practices support initiatives referring to products, brewing technologies, productive operations, and the current business model. In all cases surveyed, emphasis is placed on small incremental improvements that have greater relevance than disruptive innovations along the production line. Incremental innovations such as replacements of machines and equipment with new ones that support technologies from industry 4.0, deployment of solar energy and sustainable constructions, and product control at all stages of the processes allow the maintenance of the original formula of the products and provide a beer experience for the customer with different flavors. These are incremental factors that guide companies to maintain themselves in the market and win customers. Planning is also an administrative principle noted in most of the breweries approached. Those who have not yet adopted it are aware of its importance and power to generate fruitful results in favor of the circularity of resources and innovative processes. Close engagement with consumers is a consolidated practice in BCB04, 05, 06, 07, 08, 09, 10 and 11. The appreciation of new ideas from employees is also a notorious element in the ventures surveyed. Innovation through innovative organizational routines, namely, hackathons, accelerators, open innovation, innovation platforms, conception of new ideas, brainstorming, co-creation, and adherence to the business model canvas are alternatives that have already been addressed by the researched craft breweries. However, innovation is usually centered on the owner, who is the subject who activates the innovative cycles and goes in search of new alternatives, new elements, new technologies, and new practices. The owner participates in events, fairs, exhibitions, and spaces for debate and dialogue to seek artifacts that can significantly contribute to the innovation of the brewing enterprise.

The transfer of consolidated knowledge in the enterprise is already part of the know-how of all enterprises, with emphasis on BCB04, 05, 06, 07 and 08. Concern with innovation in environmental and social processes is also something that occurs, with exception of BCB04 and 05. The improvement in manufacturing processes to reduce the use of raw materials is also pursued by the companies analyzed. Adherence to technologies that consume less energy is also an element observed by those surveyed, as well as not using hazardous substances that generate waste in manufactured products.

With regard to the reuse of manufacturing components, there is still space for promoting advances. It is a practice that is not yet internalized in most of the researched enterprises. Likewise, the beer sector meets legal and environmental requirements and seeks to redesign processes to produce in compliance with the law. Only BCB04 and 05 do not adopt practices in this regard. Still in terms of legal guidelines, there is a commitment to labor legislation, ergonomic aspects, and compliance with legal protection in cases of injuries, occupational diseases, and accidents at work. Evidence shows that complaints and product returns are not frequent in the ventures surveyed.

The way of working and producing beers in all companies shows that they are in line with consumer expectations. All respondents signaled that they are retaining customers. This means that the products are in line with consumers' expectations, ensuring customer loyalty. At the same time, there is a concern with the creation of new products and services to remain prominent in the market, reaffirming the leadership and the protagonism in the beer industry. According to the interviewees, disruptive innovation is not yet a reality for their ventures. The emphasis is on process, organizational, marketing and product improvement. A few practices are performed daily by the companies, namely product innovation through new formulas, which bring unprecedented value to the customer, innovation of production processes, improvement of productive capacity of operations, technological innovation with the implementation of BI (Business Intelligence) software, real-time electronic management and control of operations and marketing innovation with the use of social networks to attract customers.

4.3 Supply Chain Management

If we adopt the practices of circular economy in the supply chain, it is possible to visualize which productive link has been most highlighted, as shown in Figure 1.

The study shows that the circular practices adopted by the researched enterprises are concentrated in the industrial link. In the retail and consumer links, there were no current initiatives mentioned in the reports, although all practices adopted are based on customer service and satisfaction. This demonstrates that there are still many opportunities for introducing circular alternatives in the beer segment. Especially alternatives that are supported by innovation. According to BCB01, when the company provides the consumer with a visualization of the manufacturing process and offers to consume the products at the manufacturer itself, a synergy occurs and creates a lasting relationship. Thus, the consumer also gets to choose the type of glass and taps, so that he/she can choose and drink according to his/her preferences, without the need for a waiter or menu with the available options. Still, BCB10 points out that the consumer is the one who dictates the rule and shows the direction in which the company must go. Thus, if the company is not attentive to customer demands and does not listen to the requirements, it may be directing its customer to the competition.

It is important to highlight that the circular economy demands systemic engagement. Therefore, it is essential to create and adopt circular practices that contemplate all productive links and that can contribute to the creation of a collaborative network in favor of the circularity of resources.

The highlights that can be seen in Figure 2, considering the adoption of the ReSolve business model.

4.4 Discussion

Most companies surveyed adopt practices related to circular economy at different links in their production chain. The opportunities for advances may be associated with the introduction and adherence to business models capable of expanding circular supply, namely, drivers of the use of renewable energy, fuels and bio-based products. The promotion of alternatives that encourage the use of waste as a resource are relevant, especially the alternatives that recover useful resources and generate energy from waste, enabled thanks to industrial symbiosis. Another important alternative is the second life of objects, packaging and items used in the production processes through the extension of the useful life of products by means of repair, modernization, resale, and durable and modular design. Even though this practice is already present in a notorious way in the cases investigated, there is still potential for advances, especially with the introduction of remanufactured objects.

This scenario may be associated with the constant barriers faced by remanufacturing, especially when focusing on the consolidation of a sustainable supply chain of strategic, governmental and operational nature (Zhu, Sarkis, & Lai, 2014). Another important opportunity are sharing platforms, either to increase the rate of use of industrial production technologies or to use the idle capacity of factories. E-commerce is still a novelty that can be explored for buying, selling, promoting, expanding the market, tying and many other possibilities. Adherence to service as a product alternatives can also contribute to product dematerialization, offering access to the product and retaining producer property, as suggested by Kalmykova, Sadagopan and Rosado (2018). About innovation, small incremental improvements have been highlighted. There is potential for expansion towards disruptive and transformative innovations, capable of creating new markets. Like, for example, creating shoes from beer wort, making cosmetics using beer fermentation residue, making pharmaceutical products based on beer residues, expanding the gastronomic use of beer residues, and recovering packaging for use in interior design and architecture, thus, transforming the brewery segment into something notorious and capable of leading a new path for the sector.

Considering the 10Rs, advocated by Reike, Vermeulen and Witjes (2018) and who suggest an order of priority to increase the value retention of resources in the chain, several circular practices focused on R1, R2, R3 and R4 stood out, that is, reduce, reuse/resell, repair and recycle. Therefore, this shows that innovations, even if incremental, are supporting the adherence to circular practices that prioritize the retention of resource value in the production chain and the generation of short cycles for managing these resources. Remanufacturing and reuse with a new purpose are latent opportunities that can be better used by brewing enterprises. Furthermore, energy recovery and resource extraction are also opportunities that can be introduced throughout the production cycles.

Both technical and biological cycles were already internalized by the enterprises assessed. These practices are in line with the premises advocated by Lüdeke-Freund et al. (2018), especially with regard to repair and maintenance, reuse, recycling and cascading. There is an opportunity to promote advances in reform and remanufacturing, extraction of biochemical raw material, purpose and leadership and leadership in the introduction of disruptive innovations in the craft brewery segment. While P3 maximizes the use of resources, it is pointed out as a gap by companies due to its cost. This signals an opportunity to think about strategic alternatives to enable the adoption of this practice associated with blockchain technologies, as suggested by Dutta et al. (2020).

On the other hand, the predominant existence of an institutionalized economic logic is evident. This happens to the detriment of more substantive investments in social, environmental and circular logic in the companies analyzed. There are institutionalized asymmetries in the relationship between used goods and generated value, like the findings by Ritala et al. (2021). This shows that institutionalized social responsibility from the perspective of a sustainable supply chain, plus the internalization of shared values and sustainable business models, can become relevant alternatives for the consolidation of the circularity of resources in craft breweries, in addition to legislative and legal norms, as show Cipolletta et al. (2021).

It is innovation that generates competitive advantage. As Andersén (2021) points out, innovative green products influence the competitive advantage through differentiation, which affects the company's performance. Similar reasoning can be adopted concerning innovation in the circularity of resources. This makes more sense when it happens in the production chain and in the company's operating ecosystem, where suppliers can be of a strategic nature and provide support for obtaining aggregate performance results (Yu et al., 2017).

Relational resources and capabilities also represent important elements for the most innovative companies to be recognized for the adoption of practices that contribute to the regeneration of resources and the success of the circular economy in the organizational context. This allows us to infer that the resource-based view drives circularity in artisanal breweries and encourages regenerative practices. When associated with the family business tradition, it tends to make companies more proactive. Above all, the differentiation advantage positively influences financial performance (Andersen, 2021).

Furthermore, this study points to ways in which companies can create value for the customer, considering the circularity of resources supported by innovation practices. Another contribution is the interdependence that exists between the links in the production chain, which portrays the importance of the relational element for the success of the circular economy. Relational resources can contribute to obtaining competitive advantage. Especially when these resources are strategic because they are valuable, rare, imperfectly imitable, and irreplaceable (Barney, 1991). Or, when it comes to complementary resources, which help a company to effectively carry out its resource strategy (King et al, 2003).

4.5 Theoretical Implications and Contributions

The study systematizes important and original circular practices adopted in a relatively artisanal production segment, positioned to serve a niche of demanding customers and attentive to the trends in the brewery segment. It illustrates how the circular economy becomes viable in artisanal breweries and shows the role of resources as a guide for obtaining competitive advantage. Finally, it highlights the main gaps that are still present in the implementation of the circular economy in the production chain of craft breweries.

4.6 Practical Implications and Contributions

The study presents a mapping of the circularity practices that are adopted by artisanal breweries. It contemplates the technical and biological cycles that are operated in these ventures, as well as the innovation practices that support the adoption and implementation of the circular economy. Knowing what is adopted in these ventures is essential to know the ways and mechanisms of retaining resource value and the complexity of circular economy in the Brazilian beer context. Finally, it shows how and why the most innovative companies tend to adopt more CE practices.

This study expands the current state of knowledge about the circularity of resources supported by innovation in the craft brewery segment. It proposes alternatives for the promotion of the circular economy throughout the production chain. It highlights the role of innovation as an important driver for the circularity of resources and the creation of more sustainable organizations and production chains. The reflections presented represent a dynamic perspective to articulate responses to organizational dilemmas on how to introduce elements that contribute to the circularity of resources. It proposes that companies engage in a collaborative way, articulating all the actors in the production chain, to generate profitable results and systemic effects. It also highlights the role of innovation as a driver of circular economy, but when it is not properly orchestrated, it can contribute to the creation of barriers to the circularity of resources. The existence of interdependence and relational links with other items in the production chain becomes a strategic element for the success of circular economy. Therefore, strengthening ties is essential. Consequently, our analyses contribute to identify the circularity coverage gaps that currently exist and show mechanisms and alternatives for advancing the implementation of the circular economy.

Our research contributes to expanding the framework on circular economy supported by innovation because: a) it shows current practices in brewing enterprises; b) conceptualizes implications of the dual nature of the current circular practices in the production chain supported by predominantly incremental innovations; c) proposes alternatives for the advancement of the circular economy in the beer segment; d) proposes a structure for the companies surveyed to understand how to deal with their weaknesses, and indicates alternatives for the advancement towards circular economy; e) expands the innovation theory with emphasis on the opportunities for joining disruptive and transformative innovations in the beer context; f) reveals opportunities for companies to actively use their resources to extract and retain value throughout the production cycles; g) proposes that the skills of collaboration through the use of transformational responses is essential to progress towards a consolidated circular economy; h) highlights that relationship ties are essential and necessary to strengthen cooperation with the links in the production chain for better use of resources and generation of effective alternatives to obtain competitive advantages from the expansion of circular economy. For Azadegam (2020). resilience, collaboration, self-organization and dynamism are characteristics that generally arise in networks at risk of supply in the short and medium term.

Therefore, our study accomplishes its goal by showing how to expand the circularity of resources in the craft drinks segment. It shows that the decision to move toward circularity can bring improvements in strategic actions to serve conscious and anxious consumers for sustainable and circular products. This study also has some limitations, for example, the lack of access to other Brazilian breweries. This was due to geographical distance and limited financial resources for researchers to travel. Thus, this article portrays only the reality reported by the owners of some breweries located in a specific region. This gap creates opportunities for future studies to investigate the chain considering different actors engaged with the production cycles, i.e., investigating subjects linked to the sector of inputs, production, distribution, and retail, and consumers. Another possibility is to carry out quantitative studies, which would allow us to empirically test our proposed structure.

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Tables 3 to 6 are available in the Supplementary Files section.

Appendices A & B are not available with this version.

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Circularity of resources in the craft brewery segment: an analysis supported by innovation

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1 Introduction

2 Resource Based View, Innovation And Circularity Of Resources

3 Methodological Procedures

4 Data Presentation And Analysis

5 Final Remarks

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