Perceived psychic distance and global sourcing processes in the Italian craft beer sector

In recent years, globalization and the reduction of barriers between countries have intensified international trade, leading many companies to enter global markets. Within this context, there has been growing interest in procurement internationalization, also known as global sourcing, which has become a well-established and integral component of modern business practices. This prominence is due to its ability to help organizations achieve both competitive and comparative advantages in the global context (Kotabe and Murray, 2004). Global sourcing refers to the international procurement of materials and components essential for production (Schneider et al., 2013). It involves various strategic decisions, such as global supplier selection, in-/outsourcing, offshoring or nearshoring, sourcing from low-cost countries, and choosing between multi-sourcing and single-sourcing (Ellegaard et al., 2022). These strategies are essential for firms looking to enhance their operational efficiency (Christopher, 2016; Trent and Monczka, 2003). In particular, the pursuit for higher-quality materials and the potential to enter international markets are key factors driving entrepreneurs to seek foreign partners (Frear et al., 1992; Kotabe and Murray, 2004).

In this environment, global sourcing has become an essential strategy, especially in industries where product differentiation is crucial. Notably, some studies (e.g. Francioni and Viganò, 2021; Francioni et al., 2019) have demonstrated that this strategy is prevalent in the Italian craft brewing sector. Indeed, the craft beer industry, renowned for its focus on unique flavors and high-quality ingredients, increasingly relies on global sourcing to acquire rare and premium ingredients not available domestically. According to the Brewers Association (2019), the global craft beer market was valued at USD 30 billion in 2019, with an annual growth rate of 14%[^1]. The industry has experienced substantial growth worldwide, with microbreweries playing a pivotal role in this expansion. In Italy, the number of craft breweries increased from just a few in the early 2000s to over 800 by 2019 (UnionBirrai, 2017). This rapid growth highlights the dynamic nature of the industry and the growing significance of global sourcing strategies in supporting the industry’s expansion and innovation, as master brewers seek superior hops and malts in international markets.

Despite the strategic importance of global sourcing, interacting with foreign markets can be challenging due to specific factors such as language and culture differences. These challenges can create a perception of distance between the exporter and importer, complicating the decision-making process. Moreover, geographical and cultural distance, along with organizational complexity, can limit the benefits of global sourcing (Trautmann et al., 2009). This distance, known as perceived psychic distance, encompasses various differences that can affect the decision to enter new foreign markets (Håkanson and Ambos, 2010; Skarmeas et al., 2008). Nevertheless, although researchers have extensively analyzed perceived psychic distance in the context of internationalization (Agndal, 2006; Liu et al., 2021), few studies have explored its role and predictors in global sourcing decision-making (e.g. Kim et al., 2006; Veit et al., 2018). Indeed, research on global sourcing strategies was largely dominated by the rational decision-making model.

In this context, supplier selection studies have emphasized metrics and mathematical modeling to support logical, methodical decision-making and minimize cognitive biases (De Boer, 2017; Igarashi et al., 2013; Kaufmann et al., 2017). Wetzstein et al. (2019) further underlined this approach, highlighting the importance of analytically evaluating supplier options and market characteristics based on multiple performance parameters. Building on this foundation, literature has emphasized the need to map the key antecedents of perceived psychic distance, which is shaped by a complex interplay of elements (Ambos et al., 2019; Håkanson and Ambos, 2010). Additionally, examining how perceived psychic distance affects the selection of intermediaries has become a significant and debated topic within global sourcing processes (Virtanen et al., 2022). To date, as highlighted by Schleper et al. (2020), limited research has explored the decision-making processes companies use for global sourcing, and the motivations driving their choices toward specific sourcing strategies remain unclear. Lastly, no studies have examined these issues specifically within the craft beer sector. This gap in the literature is significant, as firms in this sector face unique challenges that may not be fully addressed by existing global sourcing theories (Francioni and Viganò, 2021). Addressing this gap motivates this study, which aims to provide insights that guide more effective global sourcing decisions in the craft beer industry and similar contexts.

In particular, the study focuses on Italian small craft breweries, which have recently experienced explosive growth (Nave et al., 2021) due to increasing consumer demand for diversified products and high-quality raw materials (Carbone and Quici, 2020).

Overall, building on these assumptions, the objectives of the paper are three-fold: (1) to provide a detailed examination of the global sourcing processes specific to Italian craft microbreweries; (2) to explore how perceived psychic distance affects the selection of intermediaries; and (3) to contribute to the predominantly quantitative discourse on global sourcing and psychic distance by offering qualitative insights into the underlying mechanisms.

To achieve these objectives, the paper adopts a qualitative research methodology using a multiple case study approach involving seven small breweries located in central Italy. The study conducts a thematic analysis to identify and examine key themes and sub-themes (Clarke and Braun, 2021) related to global sourcing processes, perceived psychic distance, and the role of intermediaries. Additionally, it applies Network Theory (Johanson and Vahlne, 2009; Håkansson and Snehota, 1989) to enhance the understanding of the relationships between breweries, suppliers, and intermediaries.

Overall, this paper is among the first to adopt a qualitative approach to analyze the impact of perceived psychic distance on global sourcing strategies within the craft beer industry. Unlike previous studies that predominantly adopt quantitative methods (Christopher and Holweg, 2011; Gereffi et al., 2005), this research employs a multiple case study design to uncover rich, contextual insights (Pagell and Wu, 2009). Furthermore, by focusing on the Italian craft beer sector, the study offers a unique regional perspective that has been largely overlooked in the literature (Francioni and Viganò, 2021; Colen and Swinnen, 2016; Poelmans and Swinnen, 2011; Murray et al., 1995). In addition, by integrating Network Theory with thematic analysis, this paper not only sheds light on the relationships between breweries, suppliers, and intermediaries but also opens new avenues for understanding how these relationships can be optimized in the context of perceived psychic distance.

From a managerial perspective, the paper provides actionable insights for specific stakeholders in this niche market, offering valuable guidelines on supplier selection, quality control, and effective communication.

The remainder of the paper is structured as follows: Section 2 provides a theoretical framework, describing the global sourcing process, perceived psychic distance, and the role of intermediaries, while also exploring the relationships between these three concepts. Section 3 details the methodology, Section 4 analyzes the results, and Section 5 presents the conclusion of this study, along with the theoretical and managerial implications, limitations, and avenues for future research.

Literature has proposed different conceptualizations of psychic distance (Resciniti et al., 2020). One of the most widely adopted definitions is by Johanson and Wiedersheim-Paul (1975, p. 308), who defined psychic distance as “factors preventing or disturbing the flow of information between firms and markets,” including differences in political systems, economy, culture, and language (Chen et al., 2020). Evans et al. (2000, p. 377) conceptualized psychic distance as “the distance between the home market and a foreign market resulting from the perception and understanding of cultural and business differences”, taking into account both business and cultural country factors. The authors also emphasized that psychic distance affects various aspects of International Business (IB) operations, including supplier selection, communication, and relationship management.

However, the absence of a clear and universally accepted definition of psychic distance has complicated the development of an appropriate measurement system. Within this scenario, the IB literature has identified different indices for measuring distance. In particular, Sousa and Filipe Lages (2011) highlighted three different methods. The first method involves the index devised by Kogut and Singh (1988), which builds upon and extends the cultural dimensions analyzed by Hofstede (2001). In this approach, culture is the sole variable considered relevant for measuring psychic distance. However, this method is incomplete and potentially misleading because it overlooks other important factors such as language, economic, and political differences, as well as the respondent’s subjective perspective. Moreover, it erroneously equates cultural distance with psychic distance, failing to recognize the significant distinctions between these two concepts. The second method involves publicly available indices based on national-level measures, such as export indices, to evaluate psychic distance. However, also in this case, the measurement system leaves out the perceptual and subjective aspect of psychic distance. Lastly, the third method uses a multidimensional approach by incorporating the manager’s perspective, thereby accounting for both macro-level and micro-level variables.

More recently, the contribution of Ambos et al. (2019) introduced a conceptual multilevel model of psychic distance composed of country-level (i.e. geographic distance, cultural distance, institutional distance, economic distance) and individual-levels factors (i.e. country-specific international experience, mastery of the local language, general international experience, work experience, formal education). By specifically focusing on the IB literature, this study corroborated the critical importance of psychic distance in the international context.

However, despite the growing attention toward the binomial psychic distance and internationalization domain (Agndal, 2006; Liu et al., 2021), literature underlines the need for more systematic analyses of the distance concept within the IB domain, especially by focusing on its role during the global sourcing decision-making process (Koerber and Schiele, 2022). Finally, the Systematic Literature Review by Stanczyk et al. (2017) further highlighted the limited research on psychic distance as a key determinant in global sourcing decisions, often overshadowed by more general factors, such as location-specific barriers, institutional barriers, and environmental uncertainties. As an internal barrier, psychic distance slows the flow of information into and out of the market (Urban et al., 2023). Given that it can significantly hinder effective global sourcing partnerships (Kim et al., 2006), its study has become a significant catalyst for debate and discussion.

The concept of “global sourcing” and other terms, such as “international purchasing”, “offshore sourcing”, “worldwide sourcing”, “import sourcing”, and “international procurement” have been used interchangeably, despite their distinct meanings (Baldassarre, 2013). Trent and Monczka (2002, p. 69) distinguished “international purchasing” and “global sourcing” by noting that while the former is referred to a “commercial transaction between a buyer and supplier located in different countries”, the latter “involves proactively aggregating volumes and coordinating common items, practices, processes, designs, technologies, and suppliers across world-wide procurement, design, and operating locations”.

Sourcing globally is frequently described as a process involving increasing levels of company commitment to the supply market. Trent and Monczka (2002) identified five different stages in this process. Initially, the company is minimally involved in global purchasing, acquiring international products from suppliers who already operate globally. In the second phase, the company begins to purchase from international markets based on its needs, driven either by a lack of domestic suppliers or by competitive advantages. At this point, global sourcing becomes a formal part of the company’s strategy, driven by the opportunity to access products and components at advantageous prices. Consequently, the company becomes more engaged in foreign supply processes and starts relying on third parties for managing these relationships. In the fourth stage, the company enhances its coordination of materials and components through frequent communication with the involved parties. Finally, in the last phase, the company integrates common processes and technologies with its suppliers.

Companies are motivated to engage in global sourcing by the pursuit of higher-quality products and services, as well as the potential to access new markets, initially as buyers and eventually as on-site producers. Furthermore, trade regulations can sometimes influence the global sourcing process, requiring companies to procure goods produced in the target market or hire local employees (Bozarth et al., 1998).

The influence of psychic distance on global sourcing has recently garnered considerable academic interest (O’Connor et al., 2023). Research has shown that higher levels of perceived psychic distance can create barriers to effective supply chain management, leading to increased transaction costs and coordination challenges (Ojala, 2008). For instance, greater perceived psychic distance may lead firms to prefer familiar markets or those with less regulatory complexity, thereby limiting their sourcing options. It can also affect the negotiation process, as cultural misunderstandings can lead to conflicts or delays (Dow and Karunaratna, 2006). The implications of these mechanisms extend beyond operational efficiency and cost savings. For instance, effective global sourcing strategies can enhance a firm’s competitive advantage by enabling access to high-quality inputs and enhancing innovation through collaborative supplier relationships (Barney, 1991). Additionally, as companies become more aware of the cultural and social contexts of their overseas markets, successfully managing perceived psychic distance can contribute to more sustainable business operations (Kostova and Zaheer, 1999).

In this context, the role of strategic supplier relationships is crucial. Despite this, intermediaries have often been overlooked in the literature on global sourcing, which has primarily focused on more advanced operation modes. However, recent studies have increasingly highlighted the importance of intermediaries, particularly for Small and Medium Enterprises (SMEs) (Virtanen et al., 2022). Indeed, intermediaries can provide an ideal solution for small firms, which often face resource constraints (Nassimbeni and Sartor, 2007). Within this context, extant literature has begun to examine how perceived psychic distance affects SMEs’ selection of intermediaries in global sourcing processes (Virtanen et al., 2022). Intermediaries can help mitigate the liability of outsidership (Johanson and Vahlne, 2009), making them a preferred entry mode for firms dealing with significant perceived psychic distance. Specifically, one of the major challenges in global sourcing is the difficulty of communication and information exchange caused by psychic distance (Obadia et al., 2017). In particular, Tierean and Berens (2017) introduced the concept of ‘interaction distance’, which refers to the hidden costs of communicating with a foreign partner who does not share the same cultural and linguistic background. This lack of common ground can lead to misunderstandings and incorrect exchange of information (Johnston et al., 2012), potentially jeopardizing the effectiveness of the global sourcing strategy and the development of a long-term relationship characterized by cooperation, coordination, satisfaction, and trust. In this context, intermediaries can assist SMEs in overcoming these challenges due to their superior information capabilities and understanding of the local market (Sachdev and Bello, 2014). In this respect, intermediation emerges as an optimal solution for bridging the perceived psychic distance between parties (Salmi, 2006), effectively acting as a bond between different contexts (Guercini and Runfola, 2010). Firms can secure favorable terms, improve mutual trust, and promote collaborative innovation by building long-term collaborations with key suppliers (Chen et al., 2004). This relational approach mitigates risks associated with supplier opportunism and promotes a cooperative environment. Moreover, the impact of perceived psychic distance on decision-making procedures emphasizes the importance of understanding local market dynamics. Firms that effectively manage psychic distance often employ local intermediaries or establish regional offices staffed with local experts (Ellis, 2007). These intermediaries serve as cultural brokers, facilitating interactions and providing valuable market insights to help businesses tailor their strategies to local preferences and norms. They play a central role in global sourcing by bridging the gaps between suppliers and buyers, managing the complexities of cross-border trade. Intermediaries add value through various mechanisms, such as reducing information asymmetry, enhancing trust, and streamlining logistical processes (Rosenbloom, 2012). Their role in enhancing trust is crucial, as they act as neutral parties who ensure the fulfillment of contractual obligations and provide assurance against potential risks (Zhou and Poppo, 2010). By efficiently managing these complexities efficiently, intermediaries can significantly reduce lead times and costs, thereby enhancing the overall efficiency of global supply chains (Hingley, 2005).

Although the role of intermediaries is often considered as transactional, it carries broader implications for global trade. For microbreweries, which often lack the resources of larger firms, these challenges are even more pronounced. Understanding how psychic distance influences global sourcing decisions and the role intermediaries play is essential for developing strategies that mitigate negative impacts while capitalizing on potential opportunities (Håkanson and Dow, 2012).

To achieve the study’s objectives, the research adopted a qualitative method, which provides a richer description of complex phenomena and considers the individual perspectives of respondents without generalizing the results (Ekanem, 2007; Flanagan et al., 2018). More in detail, global sourcing decisions and the role of perceived psychic distance are influenced by context-specific factors that quantitative methods alone cannot fully capture. Indeed, qualitative research facilitates an in-depth exploration of these issues through detailed interviews, uncovering how breweries perceive and address the challenges under investigation. It also facilitates the exploration of emergent themes and contextual factors that might be overlooked in quantitative studies, providing a more comprehensive understanding of the phenomena. In this respect, the study adopted a constructivist philosophy, which emphasizes how individuals construct meaning and understanding through their experiences and interactions (Pilarska, 2021). It explored global sourcing and perceived psychic distance in the craft beer sector, focusing on the subjective interpretations and personal experiences of respondents.

In particular, the study adopted a multiple case study approach for several reasons: (1) its effectiveness in examining international business contexts; (2) its capability to contextualize specific phenomena by incorporating local context and situational constraints (Francioni et al., 2019); (3) its utility in drawing generalized conclusions through direct comparisons of similarities and differences in practices within a defined study scenario (Stake, 2013); and (4) its provision of different sources, enabling a more comprehensive analysis of the investigated topic (Yin, 1994).

Additionally, Stanczyk et al. (2015) successfully applied this approach in their research on global sourcing decision-making, engaging directly with key informants. This direct interaction allowed for clarifying questions and real-time responses to emerging themes, ultimately enhancing the findings.

Lastly, the approach highlights detail often overlooked in quantitative analyses.

The study focused on the Italian craft beer industry for several reasons. Firstly, despite some contributions examining the role of perceived psychic distance and its antecedents in influencing intermediaries’ choices during the global sourcing decision-making process (e.g. Veit et al., 2018; Virtanen et al., 2022), there is a notable lack of studies addressing these aspects in the craft beer sector. Secondly, the Italian craft beer industry, which began developing in the 1990s, has experienced consistent growth in recent years (Esposti et al., 2017; Nave et al., 2021). This growth has been driven by the advent of a new type of consumer who is increasingly attentive to product quality and diversity, seeking authentic and varied options (Carbone and Quici, 2020; Carvalho et al., 2018; Fastigi et al., 2015). Within this scenario, regulatory measures have become imperative. Specifically, Decree No. 154 of 28 July 2016 defines ‘craft beer’ as beer produced by small, independent breweries that is not subject to pasteurization and microfiltration during production (UnionBirrai, 2017).

To identify and select cases, the study consulted two websites: microbreweries.org and beverfood, which list craft enterprises operating in Italy. Next, we verified the presence of the following characteristics: (1) independence; (2) company size (micro or small enterprise); (3) production without pasteurization or microfiltration. To support theory building, our goal was to reach saturation (Lamb et al., 2011), achieved by including an adequate number of cases to identify recurring patterns and the varying contexts in which these patterns emerged (Narooz and Child, 2017). Consequently, after observing the repetition of patterns through data comparisons across multiple companies, we concluded the interviews. This process resulted in a final sample of seven breweries.

The interview guide was developed based on previous studies focused on global sourcing (Francioni et al., 2019; Francioni and Viganò, 2021; Nassimbeni, 2006), perceived psychic distance (Håkanson and Ambos, 2010), and the role of intermediaries (Virtanen et al., 2022).

The research team conducted interviews with owners, managers, or staff members responsible for specific activities (for further details, see Table 1). Each interview, lasting between 45 and 60 min, was conducted in Italian, transcribed, and then translated into English. A professional translator, experienced in both languages and familiar with the subject matter, performed the translation. The research team reviewed the translated content to ensure accuracy and fidelity to the original responses.

Finally, to achieve data triangulation, the study gathered complementary information from multiple sources: (1) interviews (provided firsthand accounts and insights from key informants); (2) breweries’ websites and social media accounts (offered supplementary information about each brewery’s operations, marketing strategies, and public communications); (3) direct observations (included site visits to observe production processes and operational practices); and (4) public reports (provided additional context and data on the craft beer industry and regulatory environment). Subsequently, the findings from the interviews were cross-referenced with information from these sources to validate and enrich the data. This process involved reviewing and comparing interview transcripts with details from websites, social media, and observations to ensure consistency and reliability. Any discrepancies were investigated and clarified, enhancing the credibility of the findings.

Overall, this approach incorporated multiple perspectives, ensured information saturation, and strengthened the validity and reliability of the results (Ontrup et al., 2022).

For data analysis, the process followed the steps outlined by Clarke and Braun (2021): familiarizing with the data, generating initial codes, searching for themes, reviewing themes, defining and naming themes, and producing the report. In particular, the study employed thematic analysis to identify and interpret patterns within the data, as applied by Jonsson and Tolstoy (2013). This process involved coding the interview transcripts and organizing the codes into themes and sub-themes that aligned with the core objectives of the study. Specifically, thematic analysis enabled the identification of potential connections among various aspects of global sourcing, the influence of psychic distance, and the role of intermediaries. To ensure accuracy, member checking was conducted by sharing the findings with participants for confirmation, and peer debriefing sessions were held to discuss and refine the themes. At the request of the firms, anonymity was maintained by not disclosing the names of the seven Italian breweries. Instead, fictional identifiers (B1, B2, B3, B4, B5, B6, and B7) were used.

This research employed Network Theory as its theoretical lens, emphasizing the significance of relationships and interactions among various actors in the international business landscape (Johanson and Vahlne, 2009; Håkansson and Snehota, 1989). This approach proved particularly relevant for understanding how microbreweries manage the complexities of global sourcing through the networks they establish with suppliers and intermediaries. By applying Network Theory, this study aimed to uncover the underlying mechanisms through which psychic distance influences global sourcing decisions and the role of intermediaries in mitigating these effects. It also provided a framework for understanding how firms build and manage relationships across borders, particularly in the presence of psychic distance. Additionally, it allowed for a detailed analysis of the role of intermediaries, who can act as bridge-builders, reducing perceived distance and facilitating transactions (Johanson and Mattsson, 1988). This perspective is particularly relevant for examining the craft beer industry, where small firms depend on networks of suppliers, distributors, and intermediaries to face the complexities of international trade. As demonstrated by Coviello and Munro (1997), the network approach to internationalization reveals that interactions among network actors, such as suppliers following their customers into foreign markets, can significantly catalyze internationalization. However, the effects of these interactions on the global sourcing process remain underexplored. With a few noteworthy exceptions (Andersen and Christensen, 2005), limited research specifically examined the role of networks and interactions in the global sourcing process. For instance, Hultman et al. (2012) adopted Network Theory as a framework for their research, emphasizing that companies within a network often rely on each other’s resources to operate effectively. They emphasized the importance of understanding the creation, maintenance, and control of these resources and identified a need for qualitative, in-depth case studies to complement the existing survey-based research on global sourcing. Furthermore, no study has yet explored these dynamics within the context of breweries, a sector that continually seeks refined and unique products. Overall, by employing a qualitative approach and Network Theory, this study aimed to deepen the understanding of these complex relationships and provide practical insights for professionals in the craft beer industry.

The initial aspect investigated concerned the respondents’ educational background and the characteristics of their firms (see Table 1). It was found that all respondents possessed a high level of education, which could influence their approach to global sourcing and their ability to face complex international markets. Among them, the case of B3 is particularly notable: this entrepreneur is the only one with a relevant qualification in the food sector. Specifically, she earned a bachelor’s degree in food science and technology and completed an internship at the Lambrate brewery during her studies. Subsequently, she worked at the same brewery until she launched her own craft beer firm. Both her education and early job experiences equipped B3 with the necessary techniques for starting craft beer production. In contrast, the other respondents (B1, B2, B4, B5, B6, and B7) lack previous experience in the brewing and food sector. Instead, they initially engaged in home-brewing before starting their own business. Home-brewing is considered a hands-on approach to craft beer production, allowing brewers to closely observe the transformation of raw materials into the final product while expressing their creativity. Specifically, five respondents (B1, B2, B5, B6, and B7) began home-brewing prior to founding their own company. In particular, B5 and B7 started home-brewing with the intention of opening their own breweries, aiming to produce craft beers “in a more professional way”. For B5, home-brewing was a brief phase during which the first beers were produced for sale. This result corroborates how home experimentation represents one of the main learning methods that allows to closely observe the transformation process from raw material to finished products as well as to develop creative flair. As highlighted by previous studies (Francioni et al., 2019), training is crucial in obtaining specific skills. In this respect, results allow to identify three further learning techniques: (1) self-taught, through the consultation of manuals (B1) and dedicated forums (B6); (2) interaction with Master Brewers (B2), considered experts in the craft beer field; and (3) attending courses in foreign countries where beer is culturally rooted (B3, B5, and B6). Overall, these techniques allowed interviewees to learn aspects related to the ingredients’ management as well as to the production, fermentation, and maturation of the final product.

Regarding the motivations for opening the brewery, passion and interest were identified as the main reasons (B1, B3, B4, B5, and B6). Additional motivations include the desire for self-realization, the aspiration to own something, and the pursuit of financial gain. For instance, B2, who faced an adverse economic context in 2009, found a way to increase his economic resources through the craft brewery, while creating a deep connection with the territory, local culture, and nearby activities. Lastly, the desire to start a business that was underdeveloped in Italy emerged as another reason from the responses (B6).

By focusing on the companies themselves (Table 2), all breweries were founded between 2003 and 2016. They are classified as micro-enterprises (B1, B2, B4, B5, and B6) or small enterprises (B3 and B7). Regarding their labeling, two breweries (B6 and B7) started as beer firms and later transitioned into craft breweries, gaining more control over production and the ability to freely express their creativity. On the other hand, B2 took the opposite approach. Affected by the earthquake in 2016 and driven by the need to survive, the owner decided to transform the craft brewery into a beer firm, with the support of an external company. As a result, the “beer firm” label, along with the network of relations established with other companies, ensured the company’s survival. The B3 case is also interesting, as it comprises two different entities: the craft brewery, founded in 2003, and the subsequent addition of the brewpub. The reason behind this decision is tied to the economic benefits by the State.

Regarding the products offered, most respondents have a wide range that includes between 4 and 25 beers. In particular, a distinction can be made between beers that are always available and special or “one shot” beers, which are offered only for a limited time. An example of this is seasonal beers, which provide brewers with the opportunity to experiment new flavors and recipes.

As for certifications, four enterprises (B1, B4, B6, and B7) have gluten-free certification. Moreover, B4 and B5 have the “UnionBirrai certificate”, which certifies the craftsmanship of the brewery based on specific parameters. However, the small size of these firms and the associated additional costs make it challenging to obtain any kind of product certification.

The company size also influenced the export activities. Four companies (B1, B2, B6, and B7) export part of their products. While some craft breweries occasionally engage in this activity (B6 and B7), others are not interested at all (B3, B4, and B5). The main reasons are: (1) the uncertainty caused by the pandemic, which has made exporting abroad and establishing relationships with partners and buyers more difficult; and (2) the excessive costs related to logistics and production. As B5 stated, “my production volumes are not significant enough to justify such an activity. You need to start exporting thousands of liters; otherwise, it is not [worthwhile]'. Another challenge concerns the national taxation system: '[ …] it has become really problematic with the new regulations that require us to pay excise duty. [ …] To export, I would need an additional area where I keep the product under suspension of excise duty, and in the future, it could become quite complicated”.

In recent years, many groups and consortia have been founded to promote beer culture in Italy and educate both consumers and brewers about the art of craft beers. Moreover, these groups are responsible for cultivating local hops and malts. Despite the growth of these cooperatives, data highlight the continued importance of global sourcing in the Italian craft beer industry, thus confirming findings from previous research (Francioni et al., 2019). As shown in Table 3, raw materials are predominantly sourced from countries with a strong brewery tradition (e.g. Germany, United States, United Kingdom, Belgium). Nonetheless, some of the interviewees (B2, B4, and B6) also purchase local malts and hops, resulting in a dual supply channel. One reason for this is the high quality of the selected ingredients. Secondly, having two different sourcing channels provides a backup option in case of supply issues. B2 confirmed that “[…] for malts, we preferred to seek another importer to diversify our supply strategy. Initially, we sourced everything from the same retailer […]. However, relying on only one importer can lead to problems. It is always wise to have a plan B whenever possible”. A third reason is shared by B7, which uses a dual supply channel mainly due to the increased demand for certain ingredients. With a gradual rise in the quantity of hops used, the company opted to diversify its hop supply, purchasing some hops from an Italian supplier and the rest directly from an English company.

Concerning raw materials, their selection is primarily influenced by the quality-price ratio of the product. Climate change has affected the harvesting of raw materials, such as hops and malt, leading to substandard product quality, thus forcing entrepreneurs to seek alternative suppliers. As explained by B3, “the climatic factor meant that hops from Northern Europe, particularly the classic German hops, experienced poor harvests for several years. They had very low alpha acid percentages, so we had to shift our sourcing. This shift, more than in the case of malt, depended heavily on the quality-price ratio. Regarding hops, since this fluctuation has been much more evident, there have been years during which some types of hops, such as the German ones, were characterized by poor quality in terms of chemical parameters, while the same hops grown in the Czech Republic had better chemical parameters and a much lower price”.

Secondly, the increasing demand for certain ingredients has caused their price to rise or made them unavailable. Finally, the third aspect concerns the quantities of imported hops. Foreign suppliers often require purchasing quantities that are too high for small businesses.

Despite these challenges, the international market remains the primary source for high-quality raw materials.

For other ingredients, such as yeast, a dual supply channel is employed depending on the type of yeast. The same strategy is applied to the procurement of special ingredients, such as cherries, mangoes, and coffee.

By specifically focusing on the drivers and barriers of global sourcing (Table 4), results highlight that the primary reasons for breweries opting for global sourcing processes are related to the products availability and quality. Concerning product availability, B3 confirmed how, at the beginning of its activity, there was a lack of malt factories and consortia in Italy supplying the necessary raw materials. Therefore, sourcing globally was necessary to secure the craft beer production. Regarding the second reason (i.e. products’ quality), despite the recent proliferation of Italian malt specialists and agricultural cooperatives, global sourcing still remains relevant due to the superior cost-quality ratio found in foreign markets. Indeed, higher quality is the key factor influencing supplier selection and procurement strategy, making entrepreneurs willing to pay a higher price for their goods.

Findings also identify an additional driver, which is related to the possibility of sourcing special materials that are almost unobtainable in Italy. For instance, B7 encountered some challenges in sourcing Australian hops and had to turn directly to a foreign supplier with exclusive access to that ingredient.

Lastly, further antecedents leading breweries to supply globally are related to (1) superior logistical performances of foreign suppliers; (2) reduced production costs; (3) access to advanced technologies and product innovations; (4) acquisition of materials at an advantageous cost; and (5) more favorable taxation.

Results also identify the main barriers encountered when sourcing globally. Specifically, customer barriers, delivery delays, difficulties related to logistics management, lack of direct communication combined with cultural and language differences, bureaucratic issues, difficulty in evaluating foreign suppliers’ competencies, and a preference for local suppliers represent the most challenging factors mentioned by the interviewees.

Additionally, albeit with lower frequency, differences in product standards and volatility/fluctuation in exchange rates emerged as potential obstacles in the global sourcing processes within the craft beer sector.

Concerning the analysis of perceived psychic distance and its role in the global sourcing decision-making process, the main antecedents leading to the formation of this specific stimulus have been investigated. More in detail, interviewees were asked to identify the main predictors that lead them to perceive levels of psychic distance as potentially jeopardizing the establishment and maintenance of foreign business relationships in their current and/or future global sourcing processes, as shown in Table 5.

Results corroborate that differences in logistics and distribution infrastructures and market size are the primary determinants of a high perception of psychic distance, followed by geographical distance and differences related to the legislative systems. Indeed, while the Italian bureaucracy is often judged to be slow and overly complicated, foreign countries tend to have much leaner legislative systems. Concerning geographical distance, in 2021, B7 established a contract with an English hop supplier to purchase a small amount of hop for production. Notably, the distance between Italy and the United Kingdom posed a primary challenge in the supplier-buyer relationship. The long distance could also cause logistical and shipment delays, thereby slowing down the entire beer production.

Additional motivations include perceived differences in: (1) the development of decision-making processes; (2) the style of building relationships with customers, suppliers, and partners; (3) the level of economic and technological development; and (4) time zones.

Specifically concerning perceived differences in decision-making processes, B7 noted that in larger companies, the decision-making process tends to be slower and more complex, whereas in smaller enterprises, decision-making power is more centralized in the hands of the manager, resulting in a faster process.

Surprisingly, both cultural and language differences were not among the most influential factors in the relationship with the supplier. This result allows to detect how these dimensions are not perceived as particularly relevant in the international beer market. Specifically, B3 stated “[…] There are people in the company who have lived abroad, both in Germany and in America, for many years. Thus, we don’t have communication problems. Apart from the fact that the technical language is usually sufficient, [ …] even for me, who does not master English, having a conversation on a technical level would be almost easier than making small talk”.

A similar reason was given by B5, who stated “we discuss technical matters, and essentially, if malt or hops are involved, that’s all that matters. It doesn’t influence whether you have X or Y background”. Additionally, B7 can rely on staff members with sufficient language skills, thus being able to hold a conversation in a foreign language. Moreover, the respondent does not believe that culture can influence business relations between partners.

Lastly, the perceived differences in the negotiation rules, political systems, countries’ stability conditions, and population wealth emerged as residual factors in the formation of psychic distance perceptions in the global sourcing processes.

Given that all the interviewees rely on local intermediaries (Table 6), to analyze the influence of their perceived psychic distance on this supply choice, they were asked whether, if they had the necessary resources, they would change their current supply system. From the answers, two different categories of firms emerged: (1) those (B2 and B6) who would continue to use the services of intermediaries; (2) those (B1, B3, B4, and B5) who would consider establishing direct ties with foreign suppliers. More in detail, concerning B2 and B6, the choice to continue using intermediaries is not influenced by their perception of psychic distance (both did not identify any reason that could lead them to perceive high levels of psychic distance in the event of relationships with foreign suppliers), but it mainly depends on the strategic relevance these breweries attribute to this specific supply mode. They emphasized how the economic convenience, the opportunity to choose from a wide range of products, and the favorable contract terms represent the main advantages.

With respect to the other respondents (B1, B3, B4, and B5), findings highlight that their perceived psychic distance is not sufficient to prevent them from considering possible future direct relationships with foreign supply markets. At the same time, results corroborate that the main motivations leading these breweries to adopt indirect international purchasing (i.e. problems related to the foreign suppliers’ company size, lack of resources, problems with the required quantities) are not enough to convince them to continue using this purchase method in the future.

Moreover, it is noteworthy to analyze the data related to the relationship length with the intermediaries. In particular, given that all the interviewees have declared long to medium-term relations, this data can be interpreted from two different perspectives, also based on the identified firm groups (a; b): for group (a), maintaining a lasting relationship could represent a way to avoid potential intangible costs. Notably, this term does not only refer to the final physical object or service, but it also includes pre- and post-sales aspects. In this sense, high-quality customer service can create trust between the brewery and the importer. This trust implies that the potential choice of a new supplier comes with high costs due to the uncertainty about the new partner’s performance. These aspects have two effects: (1) they are reflected in a medium-to long-term time relationship horizon; (2) they enhance the positive image of the importing company. Conversely, for group (b), both medium and long-term relationships may not be sufficient to maintain the same intermediaries in the future. Therefore, this suggests that the “trust” variable may not necessarily act as a deterrent to changing supply modes for these firms.

Finally, results also identify the main problems encountered with both national importers and foreign suppliers, which include: the delivery of non-compliant or incomplete orders, issues with product availability, particularly exacerbated by the pandemic, the provision of substandard products, and occasionally excessively long waiting times.

Results also identify the main future sourcing activities planned by the interviewees. In particular, although sourcing foreign ingredients remains relevant to the Italian craft beer industry, some respondents are willing to explore materials from local producers. For instance, B6 has recently initiated a project with a malt factory in Apulia and aims to continue sourcing cereals locally.

Other respondents (B2 and B7) are interested in exercising more control over the supply chain. B2 plans to transform its brewery into an agricultural enterprise, leading to two key benefits: firstly, from an economic perspective, this change would result in savings on taxation; secondly, it would provide greater control over the sourcing process. Similarly, B7 is looking to develop a direct supply chain for some of its malts, allowing for local materials and enhanced control over the procurement process. Thus, the supply chain would benefit from local materials and ingredients, while gaining greater control over the procurement process.

However, the pandemic has introduced significant uncertainty. This has impacted the brewing industry, as illustrated by B4, which, due to the constant changes brought about COVID-19, is struggling to foresee a clear path forward.

This section presents the findings from the thematic analysis, focusing on the intersection of emerging themes and sub-themes related to global sourcing, psychic distance, and the role of intermediaries (see Table 7).

The thematic analysis has identified several key themes and sub-themes that define the global sourcing strategies, extending the work of Jia et al. (2017) by highlighting the critical role of psychic distance in shaping these strategies. In more detail, this section critically examines these themes through the lens of Network Theory, which emphasizes the interconnectedness of these elements and their influence on business outcomes. Regarding the theme of global sourcing strategy, the selection of suppliers is based on factors such as availability, quality, reliability, and cost. Network Theory suggests that these criteria are interrelated within a complex system, where the decision to source from a particular supplier is influenced by multiple, interdependent factors. For instance, ingredient availability is often linked to specific geographic locations, creating a direct connection between supplier selection and geographic constraints. This is crucial for brewers who rely on specific ingredients available only from certain countries. This limitation in supplier options necessitates reliance on international sources, introducing complexities related to quality control, delivery times and cost. Additionally, maintaining quality control complicates this network, as ensuring that products meet required standards often necessitates on-site audits and ongoing monitoring, especially when sourcing from regions with diverse regulatory environments (Trent and Monczka, 2003). In this context, brewers also face issues with non-compliant products, particularly for ingredients with stringent specifications, where even a minor deviation can impact the final product’s quality. Indeed, the existing literature emphasized the importance of maintaining high-quality standards through rigorous supplier evaluation. However, the challenge lies in balancing these quality imperatives with cost considerations and logistical constraints. As Chen et al. (2004) argued, a network of supplier relationships is crucial for maintaining supply chain resilience, particularly when quality control issues arise that could disrupt production. The findings presented in Table 7 reinforce this notion, highlighting the difficulties brewers face in ensuring ingredient quality, which are further complicated by the need for international audits and the management of geographically dispersed suppliers. Cost management is another critical element within the global sourcing network, deeply intertwined with quality and logistical considerations. The balance between cost efficiency and product quality presents a crucial challenge. While brewers are willing to invest in higher-quality ingredients, cost considerations remain significant, especially as logistical expenses can offset savings from lower-cost suppliers. For instance, even if a supplier offers competitively priced ingredients, international shipping costs, potential customs fees, and the risk of delays can erode these savings, ultimately affecting the overall cost-effectiveness of the supply chain strategy. According to Network Theory, the effectiveness of cost management strategies relies on the strength and robustness of connections among various supply chain elements, such as suppliers, logistics providers, and regulatory bodies. The results indicate that while brewers prioritize cost-effective sourcing, they are willing to pay a premium for higher-quality ingredients. This finding aligns with Kotabe and Murray’s observation (2004) that, while cost efficiency often drives global sourcing decisions, it is frequently balanced by additional expenses related to logistics and risk mitigation. Furthermore, results highlight the complexity of managing international supply chains, particularly with respect to delivery delays and logistical issues. This underscores the need for a sophisticated logistical approach to manage the dynamic complexities of global operations effectively. These challenges are exacerbated when sourcing from distant or less developed regions, where infrastructure deficiencies and regulatory hurdles can significantly disrupt supply chains (Christopher and Holweg, 2011). Network Theory highlights the vulnerability of these connections, where a breakdown in one area (e.g. transportation) can spread through the entire network, leading to production delays and increased costs. The challenges identified include customer barriers, delivery delays, logistics management issues, lack of direct communication combined with cultural and linguistic differences, bureaucratic issues, difficulty in assessing the competencies of foreign suppliers, and a preference for local suppliers.

In the perceived psychic distance theme, the table identifies differences in logistics and distribution infrastructures as significant contributors to this distance, affecting overall business relationships. Differences in logistic capabilities across countries significantly impact sourcing efficiency. A well-developed infrastructure in one region might streamline operations, whereas limited infrastructure in another could complicate the supply chain. Brewers often encounter operational challenges when dealing with suppliers in regions where distribution networks are underdeveloped, resulting in frequent delays and unexpected costs.

Regulatory barriers further exacerbate these challenges, as differing customs regulations and legal systems increase transaction complexity and contribute to the perception of psychic distance (Evans and Mavondo, 2002). Varied customs requirements, legal frameworks, and bureaucratic processes amplify complexity, particularly in regions with strict import regulations or unstable policy landscapes. Brewers frequently face compliance challenges that delay shipments, add costs, and increase the perceived psychic distance, making regulatory considerations a central factor in supplier selection and risk assessment.

Geographical distance and the associated logistical challenges also play a significant role in shaping the perception of psychic distance. Results also highlight how greater physical distances complicate real-time communication and the coordination of shipments, often leading to delays. Network Theory helps explain this by illustrating how the physical separation between nodes (in this case, suppliers and buyers) can weaken the overall network, making it more susceptible to disruptions (O'Grady and Lane, 1996). As the table indicates, these differences significantly contribute to the perception of psychic distance, as they affect the ease and reliability of supply chain operations. The literature supports this view, with studies showing that logistical inefficiencies can severely impact supply chain performance, particularly in international contexts where infrastructure quality varies widely (Cachon and Terwiesch, 2009). In the context of Network Theory, these barriers can be seen as impediments to the flow of information and trust between nodes (i.e. business partners), weakening the overall network (Johanson and Vahlne, 2009). Cultural differences, particularly in language and business practices, create communication barriers that can lead to misunderstandings and strained relationships (Dow and Karunaratna, 2006). While cultural differences affect the ease of relationship-building, brewers have found that language barriers, though challenging, can often be managed through intermediaries or translators. However, misunderstandings still occur, especially when cultural differences impact negotiations and expectations. Nevertheless, the findings of the present study demonstrate that these differences do not significantly complicate interactions with suppliers and are not the primary source of perceived psychic distance. Also differences in market sizes between countries influence strategic decisions regarding sourcing and perceived psychic distance. In smaller markets, sourcing options may be limited, driving brewers to expand their reach into larger, albeit more challenging, international markets. This shift affects their approach to risk management, as operating in smaller markets often requires a high level of adaptability to manage fewer suppliers and more concentrated risks.

As for the role of intermediaries, the table underlines how intermediaries assist with supplier selection, quality control, and managing regulatory hurdles, particularly in complex or high-risk markets. Acting as facilitators, intermediaries play a key role in simplifying transactions by supporting brewers dealing with unfamiliar or complex environments, bridging knowledge gaps, and streamlining processes. From a Network Theory perspective, intermediaries act as connectors between nodes, facilitating the flow of information and resources across the network (Dyer and Singh, 1998). In this regard, the literature emphasizes the importance of intermediaries in trust-building, especially in contexts where direct communication between buyers and suppliers is challenging. By enhancing long-term relationships and mitigating risks, intermediaries enhance the network’s resilience, ensuring supply chains remain robust even in the face of external disruptions (Mudambi and Swift, 2014). The findings support this, showing how intermediaries play a critical role in maintaining trust and facilitating smooth transactions in high-psychic-distance contexts. This function becomes essential in markets where cultural or geographical distance creates mistrust, as intermediaries help mitigate risks associated with unfamiliar suppliers and high-stakes transactions. In addition to their role in trust-building, intermediaries provide essential logistical support, helping to overcome the challenges associated with international transportation and supply chain coordination. The table indicates that intermediaries are crucial in managing unexpected disruptions and ensuring the timely delivery of materials. Network theory suggests that this logistical support is essential for maintaining the integrity of the supply chain network, as it helps prevent breakdowns in connections that could lead to delays or other operational issues (Gereffi et al., 2005). Intermediaries are often responsible for coordinating with logistics providers and managing customs clearances, thereby ensuring the reliability and efficiency of the supply chain. Effective relationship management, facilitated by intermediaries, plays a significant role in mitigating conflicts and promoting long-term partnerships. The literature underscores the importance of intermediaries in acting as mediators in disputes, helping to resolve conflicts and maintain business continuity (Heide and John, 1992). The table’s results align with these findings, emphasizing how intermediaries contribute to the stability and sustainability of global sourcing networks by ensuring that relationships between buyers and suppliers remain strong and productive.

The thematic analysis also allowed for the identification of challenges in sourcing, demonstrating vulnerabilities within the network. Challenges associated with sourcing non-compliant products and dealing with delivery delays pose significant risks to global sourcing networks. The table highlights how non-compliance leads to production disruptions, necessitating robust quality control measures. For instance, ingredients sourced from certain regions might not consistently meet the required quality standards, forcing brewers to either accept lower-quality materials or search for alternative suppliers. This issue underscores the need for continuous supplier assessments and quality checks, particularly when sourcing from regions with diverse regulatory standards. Network theory illustrates how these disruptions can weaken the connections between different nodes, particularly when non-compliance becomes a recurring issue (Nair et al., 2011). Delivery delays, often caused by logistical challenges or supplier inefficiencies, further strain the network by disrupting production schedules and increasing costs. The literature notes that these delays are particularly problematic in international supply chains, where the complexity of cross-border logistics and customs procedures can exacerbate the risk of delays (Hult et al., 2004). The table’s findings reinforce this, showing how frequent delays necessitate contingency planning and can lead to strained relationships between buyers and suppliers, underlying the importance of having alternative suppliers to mitigate these risks. Supplier relationship problems, often arising from miscommunication and order inaccuracies, represent another critical challenge identified. Cultural misunderstandings and differing business practices can lead to errors and delays, emphasizing the need for clear communication protocols and potentially the use of intermediaries to bridge these gaps. Network theory suggests that such relationship problems can destabilize the supply chain network, as weakened trust and communication lead to further operational disruptions (Ford et al., 2011). The literature supports this finding, highlighting the importance of effective communication and relationship management in maintaining strong supplier partnerships (Gadde and Snehota, 2000).

Results indicate that perceived psychic distance in the foreign supply system of craft breweries plays a secondary role compared to other market sectors. This can be attributed to three primary factors. Firstly, as mentioned earlier, nearly all the firms purchase raw materials from Italian distributors. Consequently, entrepreneurs do not have direct relationships with foreign countries but instead interact with domestic importers. Secondly, according to most firms, the continuous exchange between different countries and cultures allows them to acquire the know-how and knowledge necessary to offer innovative products. As B63 stated, “in the past years [ …] the communication exchange with German malt producers, for example, was a valuable resource because you obtained information on production and product evaluation, which was knowledge that [ …] we did not yet have in Italy, apart from the fact that beer was not produced [ …]”. Thirdly, the primary supplier countries are European, and based on the perception of the individual interviewees, these markets are perceived as less distant compared to others.

This finding supports the conclusion that, while psychic distance may not be the primary concern, it still exerts a significant influence on decision-making (Johanson and Vahlne, 2009; Evans and Mavondo, 2002).

Moreover, the data show that brewers frequently rely on intermediaries to bridge these divides, corroborating the study of Dyer and Singh (1998), which emphasize the moderating role of intermediaries in managing psychic distance. By examining the functions of intermediaries, such as information brokers, negotiators, and logistics coordinators, the study underscores their importance in bridging the gaps created by psychic distance. This finding aligns with the theoretical perspectives of Håkanson and Dow (2012) on the role of networks and intermediaries in international trade, providing empirical evidence of their moderating effects on the challenges posed by psychic distance. These scholars investigated the role of market networks and various forms of distance (cultural, administrative, geographical) in IB, emphasizing the significance of networks in facilitating international trade and mitigating the challenges associated with psychic distance. As noted by Ford et al. (2011) and Gadde and Snehota (2000), clear communication protocols and relationship-focused intermediaries help mitigate misunderstandings rooted in cultural differences, confirming the importance of managing psychic distance. By employing intermediaries, brewers mitigate risks associated with direct sourcing from foreign suppliers, ensuring smoother transactions and greater resilience against logistical or regulatory challenges. This aligns with Jia et al. (2017), who emphasized the strategic role of intermediaries in managing the complex network of supply chains and enhancing interconnectedness. The data point to intermediaries as indispensable in high-psychic-distance contexts, supporting the conclusion that they are essential to global supply chains (Gereffi et al., 2005; Mudambi and Swift, 2014). Network Theory further substantiates this view, indicating that intermediaries enhance trust, reduce operational disruptions, and establish stable, efficient supply chains (Heide and John, 1992). Additionally, Network Theory explains that intermediaries enhance the integrity of the network by linking distant nodes and reducing potential disruptions associated with psychic distance (O’Grady and Lane, 1996). Firms leveraging strong market networks are better equipped to manage foreign markets, reduce transaction costs, and enhance their competitive advantage.

The analysis also reveals that brewers prioritize cost-effective sourcing while remaining willing to pay premiums for high-quality ingredients, indicating that quality is a significant concern in their decision-making process. The data further demonstrate that brewers frequently conduct on-site audits, underscoring the importance of rigorous quality control. This finding aligns with Kotabe and Murray’s (2004) argument that global sourcing requires robust quality oversight to mitigate the risks associated with international operations.

Previous studies also highlighted the dynamic nature of psychic distance, which can evolve over time as firms gain more experience and knowledge about foreign markets. In this respect, the findings emphasize the importance of relationships and trust, supporting the principles of Network Theory (Håkansson and Snehota, 1989). More in detail, they reveal how networks and trust-building are critical in mitigating the adverse effects of psychic distance. This highlights the complexities inherent in global sourcing strategies, particularly in the craft beer sector, where firms must balance the internationalization of supply with both internal and external integration. Moreover, in selecting intermediaries for the global sourcing strategies, perceived psychic distance does not appear to be a decisive factor. Specifically, B2 and B6 confirmed that they would continue to rely on intermediaries due to the trust-based relationships they have established and their belief that this remains the most effective solution. In contrast, respondents from B1, B3, B4, and B5 indicate that they might consider bypassing intermediaries in the future to work directly with foreign suppliers. This decision stems from their low perception of psychic distance and their lack of reliance on the trust established with intermediaries as a critical factor in their sourcing strategies.

Overall, it can be assumed that perceived psychic distance has a limited influence on the relationship between exporter and importer. The main factors contributing to the reduced perception of distance include the respondent’s education and the characteristics of the sourcing market. Consistent with the study of Ambos et al. (2019), a high level of education, combined with experience in a specific market, can diminish the perception of distance. Supporting this, one of the interviewees holds a five-year master’s degree, and part of his brewing education took place at the Institute of Brewing and Distilling in London. Additionally, the primary sourcing market is within Europe, where trade dissimilarities are minimal, further reducing the perception of psychic distance.

The study offers valuable contributions both theoretical and managerial in nature.

Theoretically, this study contributes to enriching current research on global sourcing strategy by empirically demonstrating the significant impact of perceived psychic distance on the relationship between suppliers and importers. Specifically, it fills existing research gaps by providing detailed evidence that perceived psychic distance influences key aspects of global decision-making, including supplier selection, quality control, and communication effectiveness. In particular, the findings highlight that cultural differences and regulatory barrier, which are key components of perceived psychic distance, lead to challenges in communication and trust-building between international partners. Additionally, the study shows how intermediaries play a crucial role in mitigating the effects of perceived psychic distance, thereby supporting more efficient transactions and more robust global sourcing strategies. Moreover, it enriches existing studies by (1) deepening the investigation of the role of perceived psychic distance during the global decision-making process (Veit et al., 2018); (2) mapping the main predictors of perceived psychic distance (Ambos et al., 2019) by specifically investigating the respondents’ subjective point of view (Sousa and Filipe Lages, 2011); (3) analyzing the influence of perceived psychic distance on the choice of intermediaries in global sourcing processes (Virtanen et al., 2022); and (4) examining all these phenomena in a sector that has been relatively unexplored by the existing global sourcing literature (i.e. the Italian craft beer industry), which currently represents a compelling context for investigation due to its rapid and explosive growth (Nave et al., 2021). In addition, this study enriches the theoretical discourse on global sourcing and perceived psychic distance by integrating these concepts within a qualitative framework through the adoption of thematic analysis and Network Theory, thereby extending previous studies (e.g. Jia et al., 2017). Lastly, it deepens the analysis of the role of intermediaries, providing empirical evidence that supports theoretical perspectives on network governance in IB (Peng and Luo, 2000).

From a managerial perspective, the study provides several contributions that can be particularly relevant for three specific categories of stakeholders: (1) local intermediaries; (2) foreign suppliers; and (3) Italian firms producing raw materials for the craft beer sector.

With respect to the first group, investigating the main reasons why Italian breweries prefer indirect sourcing is crucial for identifying the key strengths intermediaries should focus on to maintain long-term, trust-based relationships with these breweries. More in detail, intermediaries should consider the following aspects in their offerings: (1) wide product portfolios; (2) pre-sales and after-sales assistance; (3) economic convenience; and (4) favorable contract terms. Adopting these strategies could help build customer loyalty while increasing the costs of establishing relationships with new suppliers.

Concerning the foreign suppliers, results underline how raw materials are often purchased through local intermediaries, indicating a preference for indirect global sourcing (Francioni et al., 2019). This preference is primarily due to specific factors that hinder the possibility for respondents to source directly from abroad. Consequently, for foreign suppliers, it becomes fundamental to reduce and mitigate these factors (i.e. limited cost-effectiveness, perceived differences in the negotiation modalities, such as the need for advanced payment and the obligation to buy large quantities of raw materials, the performances and offers proposed by the local intermediaries) with the aim of increasing the possibility of launching new business relationships. For instance, regarding the obligation to buy large quantities of raw materials, Italian breweries do not have warehouses capable of keeping the purchased products in good condition. Furthermore, the quantity sold by the supplier is considerable compared to the annual production of craft breweries. Consequently, they prefer to interface with Italian distributors. Moreover, foreign suppliers should also try to reduce the level of psychic distance perceived by Italian breweries if they decide to internationalize their sourcing strategy, specifically addressing the factors that most influence respondents’ perception of this distance (i.e. geographical distance, perceived differences in the legislative and distribution systems).

Lastly, with respect to Italian firms producing raw materials for breweries, results corroborate the relevance of global sourcing within the Italian craft beer industry, thus confirming previous studies (e.g. Francioni et al., 2019). In particular, Italian breweries mainly purchase raw materials from countries with a strong brewery tradition (e.g. Germany, United States, United Kingdom, Belgium). Therefore, this situation highlights the poor performance and competitive capacity of Italian producers, underscoring their evident difficulty in supplying national breweries. In this respect, it is crucial for these producing companies to address their main weaknesses, as identified by Italian breweries, specifically the limited availability of certain ingredients and the unsatisfactory price-quality ratio of these ingredients. However, as indicated by the interviewees’ future plans, there is potential for a shift toward greater engagement with Italian producers. For instance, B6 reported having recently started a project with a malt factory in Apulia and confirmed its intention to continue sourcing cereals locally.

Furthermore, managers should focus on selecting intermediaries with deep market knowledge who can facilitate efficient international operations. Developing capabilities to manage cultural, administrative, geographic, and economic distances will enhance the firm’s ability to source globally. In this respect, the study suggests several actionable strategies: (1) prioritizing the selection of intermediaries who can effectively bridge cultural and business environment gaps; (2) implementing training programs focused on international business skills and cultural understanding to reduce the impact of psychic distance; and (3) adopting digital tools to streamline communication and information exchange with foreign partners, minimizing potential cultural and language misunderstandings. These managerial strategies can assist decision-makers in small breweries in better managing the complexities of international sourcing, ultimately leading to more effective and efficient global operations. Managers should also evaluate potential suppliers not only based on cost and quality but also on their willingness to engage in long-term, collaborative relationships. Developing strategic alliances with reliable suppliers can enhance supply chain stability and enhance innovation (Hingley, 2005). Managers should prioritize building trust and mutual benefits in supplier relationships, as these relational elements are crucial for reducing risks and improving collaboration (Chen et al., 2004). To address perceived psychic distance, firms often invest in cross-cultural training and development programs for their employees. These programs aim to enhance cultural awareness, improve communication skills, and reduce ethnocentric biases (Harzing et al., 2016).

As for practical recommendations, the study highlights the importance of developing cross-cultural competence through training programs. Firms should prioritize cultural training for employees to effectively address cultural differences. This approach can help mitigate misunderstandings and enhance international business relationships. For practitioners in the craft beer industry, our findings emphasize the importance of reducing perceived psychic distance when entering foreign markets. For instance, small breweries can benefit from: (1) establishing robust communication channels to minimize misunderstandings and build trust with foreign partners; (2) developing cultural competency to effectively manage and adapt to different business practices and cultural norms; and (3) leveraging local intermediaries to bridge cultural and language gaps, thereby facilitating international transactions.

Although this study represents a relevant starting point for analyzing the perceived psychic distance within the global sourcing processes of Italian craft beer firms, it is not free from limitations. Firstly, the study focused exclusively on breweries from central Italy, excluding other regions. Therefore, future research could address this gap by including regions with different brewing traditions and dynamics than central Italy. Secondly, since the majority of the analyzed microbreweries lack direct experience in foreign markets, it would be valuable to explore how the relationship between perceived and actual psychic distance varies across different levels of international experience (Dow and Karunaratna, 2006; Virvilaite and Seinauskiene, 2013). Indeed, the study primarily relies on perceived psychic distance, which is inherently subjective. Future research could incorporate objective measures of psychic distance to provide a more balanced and comprehensive perspective. Lastly, while the qualitative nature of this research offers in-depth insights, it may not capture the full complexity of global sourcing dynamics. Complementary quantitative studies could help validate and expand upon these findings, providing a broader and more detailed understanding of the phenomena.

The authors would like to thank Marta Barsanti for his valuable contribution in the data collection phase.