Neumarkter Lammsbräu
An organic brewery that solved two social dilemmas with farmers by self-commitment and collective commitment.
- Sector
- Brewing and beverages (organic)
- Source
- Mini-Lecture 1.3 example (Beckmann, 2009); revisited in Tutorial 4 (Week 4, “Thinking in systems… with beer?”)
The case in brief
Neumarkter Lammsbräu is a family-owned brewery in Neumarkt in der Oberpfalz, Bavaria, owned by the Ehrnsperger family since 1800. Under Dr Franz Ehrnsperger it set the goal of becoming an ecologically oriented company in 1977, trialled organic brewing from 1982 and launched its first organic beer in 1987.
The lecture quotes Ehrnsperger’s principle “Ecology is long-term economy” (the slide spells his name Ehrensperger). The goal was high-quality beer, lower emissions, secure local jobs and organic raw materials, and the idea was a positive-sum situation for all stakeholders. Farmers faced high risk in converting to organic production, and competition between them threatened price agreements.
Lammsbräu responded by committing itself (long-term contracts at above-market prices and an agricultural engineer to lower farmers’ costs) and by building collective commitment through a growers’ association and a producers’ co-operative whose members alone receive contracts. The company’s own history dates the Growers Association for Organic Brewing Raw Materials (EZÖB) to 1989.
Key facts
- Location
- Neumarkt in der Oberpfalz, Bavaria, Germany
- Ownership
- Ehrnsperger family, sole owner since 1800; a family business in its 7th generation, with Johannes Ehrnsperger in management since 2018
- Ecological goal set
- 1977
- First organic beer
- 1987
- Growers’ association (EZÖB) founded
- 1989
- Growers’ association today
- EZÖB: more than 30 years old, around 170 organic farms; above-average prices and long-term contracts (lammsbraeu.de)
- Certification
- First brewery in Europe certified under the EC organic regulation (1992)
- Fully organic range
- 1995
- Markets
- Sells almost only in Germany for ecological reasons; about 3% exported to selected European countries (company website)
Analysis through module theory
Social dilemmas (Beckmann, 2009)
Single-sided dilemma: farmers would not go organic because the brewery could exploit them once they had converted; the solution was the brewery’s self-commitment. Multi-sided dilemma: farmers undercutting each other undermined price agreements; the solution was collective commitment through an association.
Type of entrepreneurship
The venture pursues market success with environmental innovation, which fits ecopreneurship (Schaltegger, 2002) and entrepreneurship based on sustainability principles (Kirkwood and Walton, 2010). Because the change was driven from within an established family brewery, it can also be discussed against intrapreneurship (Antoncic and Hisrich, 2003).
Innovation type
The key innovation sits in the value architecture — partners and the value chain of raw materials — so it can be argued as a process or business model innovation rather than only a product innovation (organic beer).
PESTEL and internationalisation
The Environmental and Social dimensions drive the strategy, and the same ecological logic limits exports: the company sells mainly in Germany. This is a useful counter-example showing that internationalisation is a choice that must fit the venture’s values.
Iceberg / systems thinking (Week 4 tutorial; Goodman, 2002)
The Tutorial 4 iceberg reads: event — farmers stay non-organic; pattern — traditional methods give a known yield and changing them is risky; underlying structure — farmers must receive sufficient recompense through the market to cover their costs; mental model — “capitalist rationality promotes competition”, so each farmer expects rivals to sell first. The slide sets the individual self-commitments beside the structure and the growers’ associations beside the mental model: that is where systems change happened.
Ecopreneur, not bioneer (Week 4; Schaltegger, 2002)
Environmental performance is the core of the business and is pursued through a mainstream product for market success, which fits Schaltegger’s ecopreneur rather than a bioneer serving a niche. The Tutorial 4 slides conclude that Lammsbräu replaced the perception “sustainability versus profit” with “profit and sustainability”.
Discussion questions
- 1.Why would farmers refuse to go organic without the brewery’s commitment?
- 2.How did the growers’ association change the farmers’ incentives?
- 3.Is Lammsbräu an example of ecopreneurship or intrapreneurship?
- 4.Why might an ecologically driven firm choose not to export much?
Takeaways
- Zero-sum situations are often socially constructed and can be redesigned into positive-sum ones.
- Entrepreneurs can innovate in relationships and rules, not only in products.
- Values shape market choice as much as opportunity does.