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

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.