Craft industry in B.C.’s forest sector: What can we learn from coffee and beer?

Main Article Content

Hugh Scorah https://orcid.org/0009-0000-7776-5990
Harry Nelson https://orcid.org/0000-0002-0233-8924
Tim Bogle

Keywords

economic development, forest products, value-added products, value creation

Abstract

This article analyzes the development of craft industries in coffee and beer to identify the key changes in regulation, capital markets, management, technology, distribution and marketing that made development possible. The article is written with the purpose of learning from these industries and examining their practical implications for creating craft wood products in the wood products manufacturing industry, using British Columbia’s (B.C.’s) forest sector as an example. We examine the coffee and beer industries, where we observe innovation, new entry and growth stemming from a focus on value-added products in what had been considered mature industries. We start with the story of Third Wave coffee and how its marketing success, which created ‘in-groups’ and established a differentiated, quality-controlled product, led to the industry’s rapid transformation. We use Resource Partitioning theory as a way of contextualizing these observations. Our discussions highlight practical implications for how our findings can be leveraged by either existing or new wood manufacturers, drawing on B.C., where commodity production dominates, and there is interest in growing a value-focused industry. In our conclusions, we observe that price premiums from craft products follow from psychic or narrative value, that capturing this value requires control of the customer relationship and that maintaining the quality standards necessary to produce this value requires new skills and management training.

Abstract 18 | View Full Text Downloads 0 Download PDF Downloads 9

References

Acitelli T, Magee T. 2017. The audacity of hops: The history of America's craft beer revolution. Chicago Review Press.

BC Ministry of Forests. 2024. Value Added Accelerators. Accessed at: https://www2.gov.bc.ca/assets/gov/farming-natural-resources-and-industry/forestry/competitive-forest-industry/vaa_timeline_infographic.pdf

BC Ministry of Forests. 2021. Modernizing Forest Policy in British Columbia. https://www2.gov.bc.ca/assets/gov/farming-natural-resources-and-industry/forestry/competitive-forest-industry/modernizing_forestry_in_bc_report.pdf

Boone, C, Brdcheler V, Carroll GR. 2000. Custom service: Application and tests of resource-partitioning theory among Dutch auditing firms from 1896 to 1992. Organization Studies, 21(2), pp.355-381. https://doi.org/10.1177/0170840600212003

Boubacar I. 2024. US imports of softwood lumber: Assessing the significance of spillover effects. Forest Policy and Economics. 160, March, 103162. https://doi.org/10.1016/j.forpol.2024.103162

Bourgeois B. 2022. Building a value-added investment climate. Importance of long-term forest stewardship. Available from: https://www.bcforestconversation.com/wp-content/uploads/2022/04/Building-a-value-added-investment-climate.pdf

Carroll GR. 1985. Concentration and specialization: Dynamics of niche width in populations of organizations. American journal of sociology, 90(6), 1262-1283. https://doi.org/10.1086/228210

Carroll GR, Swaminathan A. 2000. Why the microbrewery movement? Organizational dynamics of resource partitioning in the US brewing industry. American journal of sociology, 106(3), 715-762. https://doi.org/10.1086/318962

Carroll GR, Dobrev SD, Swaminathan A. 2002. Organizational process of Resource Partitioning. Research in Organizational Behavior, 24: 1-40. https://doi.org/10.1016/S0191-3085(02)24002-2

Cho N, Schecter A. 2009. The decade's top ten in specialty coffee. Portafilter. December 31. https://web.archive.org/web/20100220104140/http://www.portafilter.net/2009/12/decades-top-ten-in-specialty-coffee.html

DeLong, DL, Kozak RA, Cohen DH. 2007. Overview of the Canadian value-added wood products sector and the competitive factors that contribute to its success. Canadian Journal of Forest Research 37, no. 11 (2007): 2211-2226.
https://doi.org/10.1139/X07-027

de Vasconcellas e Sá JAS, Hambrick D. 1989. Key success factors: Test of a general theory in the mature industrial-product sector. Strategic Management Journal 10: 367-382. https://doi.org/10.1002/smj.4250100406

Dundas Z. 2008. Bean Town. IN the Williamette Week. March 21. https://web.archive.org/web/20080321175738/http://wweek.com/editorial/3249/8078/

Elzinga KG, Tremblay CH, Tremblay VJ. 2015. Craft beer in the United States: History, numbers, and geography. Journal of Wine Economics, 10(3), 242-274. https://doi.org/10.1017/jwe.2015.22

Garavaglia C. 2022. Industry evolution: Evidence from the Italian brewing industry. Competition & Change 26, 1: 75-95. https://doi.org/10.1177/10245294211007408

Godin S. 2008. Tribes: We need you to lead us. New York: Penguin. https://www.penguinrandomhouse.com/books/300941/tribes-by-seth-godin/

Graeber D. 2013. It is value that brings universes into being. HAU: Journal of ethnographic theory, 3(2), pp.219-243. https://doi.org/10.14318/hau3.2.012

Grace P. 2022. Zoom conversation with Hugh Scorah, 13 June.

Grace P, Nelson H, Kozak R. 2018. Understanding SME success in the value-added forest products sector: insights from British Columbia, Canada. Bioproducts Business Journal 3(9).

Hofer C, Schendel D. 1978. Strategy formulation: analytical concepts. West Publishing Company. St Paul. Mn.

Jonsson O, Lindberg S, Roos A, Hugosson M, Lindström M. 2008. Consumer perceptions and preferences on solid wood, wood-based panels, and composites: A repertory grid study. Wood and Fiber Science, pp.663-678.

Kiely M. 2019. Brown-Forman CEO: 'Craft' not dominant in American whiskey. The Spirits Business. July 12. https://www.thespiritsbusiness.com/2019/07/brown-forman-ceo-craft-not-dominant-in-american-whiskey/

Kiely M. 2020. Exploring the evolution of the 'craft' movement. The Spirits Business. February 7. https://www.thespiritsbusiness.com/2020/02/spirits-producers-on-the-meaning-behind-craft/

Kinstlick M. 2011. The US craft distilling market: 2011 and beyond. Coppersea Distilling, LLC.

Klepper S. 1997. Industry life cycles. Industrial and corporate change, 6(1), 145-182. https://doi.org/10.1093/icc/6.1.145

Leidecker J, Bruno A. 1984. Identifying and using critical success factors. Long Range Planning 17(1): 23-32.
https://doi.org/10.1016/0024-6301(84)90163-8

Low M, Abrahamson E. 1997. Movements, bandwagons and clones: Industry evolution and the entrepreneurial process. Journal of Business Venturing, 12: 435-457. https://doi.org/10.1016/S0883-9026(97)00001-3

Nelson H, Nakamura M, Vertinsky I. 2003. Cooperative R&D and the Canadian forest products industry. Managerial and Decision Economics, 24: 167-169. https://doi.org/10.1002/mde.1081

Peli G, Nooteboom B. 1999. Market partitioning and the geometry of the resource space. American Journal of Sociology, 104(4), 1132-1153. https://doi.org/10.1086/210138

Risen, C. 2020. Craft distillers were booming. Now they face bust. New York Times. April 23rd. https://www.nytimes.com/2020/04/23/dining/drinks/craft-distillers-coronavirus.html

Rockart J. 1979. Chief Executives define their own needs. Harvard Business Review. March/April, 81-92.

Schultz R, Kozak R, Merkel G, Sunderman R, Thrower J. 2013. Growing the BC interior value added wood sector. Report prepared for SIBAC. June 27. Accessed at: https://bcruralcentre.org/wp-content/uploads/2021/01/SIBAC-Growing-the-BC-Interior-Value-Added-Wood-Sector-Summary-Report-June-27-2013.pdf

Sikavika K, Posner J. 2013. Paradise sold: Resource Partitioning and the organic movement in the US farming industry. Organization Studies 34 (5/6): 623-651. https://doi.org/10.1177/0170840613479225

Strobel K, Nyrud AQ, Bysheim K. 2017. Interior wood use: linking user perceptions to physical properties. Scandinavian Journal of Forest Research, 32(8), pp.798-806. https://doi.org/10.1080/02827581.2017.1287299

Small Business Insight of the Triangle. 2011. A different kind of coffee company. September 7. https://web.archive.org/web/20140407094907/http://sbicarolinas.com/a-different-kind-of-coffee-company/
Standing Committee on Natural Resources, House of Commons. 2018.Value-Added Products in Canada's Forest Sector: cultivating innovation for a bioeconomy. Accessed at: https://www.ourcommons.ca/Content/Committee/421/RNNR/Reports/RP9828469/rnnrrp09/rnnrrp09-e.pdf

Sutherland R. 2019. Alchemy: The surprising power of ideas that don't make sense. Random House.

Swaminathan, A., 2001. Resource partitioning and the evolution of specialist organizations: The role of location and identity in the US wine industry. Academy of management journal, 44(6), pp.1169-1185. https://doi.org/10.5465/3069395

Voronov M, Foster WM, Patriotta G, Weber K. 2023. Distilling authenticity: Materiality and narratives in Canadian distilleries' authenticity work. Academy of Management Journal, 66(5), pp.1438-1468. https://doi.org/10.5465/amj.2020.0017

Yin R, Baek J. 2005. Is there a single national lumber market in the United States? Forest Science, Volume 51 (2) pp:155-164. https://doi.org/10.1093/forestscience/51.2.155

Zou W, Kumaraswamy M, Chung J, Wong J. 2014. Identifying the critical success factors for relationship management in PPP projects. International Journal of Project Management. 32 (2): 265-274. https://doi.org/10.1016/j.ijproman.2013.05.004

Zwikael O, Globerson S. 2006. From critical success factors to critical success processes. International Journal of Production Research 44: 17. https://doi.org/10.1080/00207540500536921