The purpose of this study is to show how authenticity limits businesses’ responses to competition in the food and drink sector. The results of the study were based on a unique dataset of over 300 small- and medium sized breweries, and more than 1,300 beer drinkers in Franconia (Germany) to test the impact of authenticity on breweries’ reactions to competition within geographic communities. The results reveal that breweries tend to enlarge their product portfolio by introducing non-authentic products as a response to competition in geographic communities, while reducing their product diversity and engagement in non-authentic segments when preferences for authenticity prevail in the geographic community. Furthermore, in geographic communities where both competition and preferences for authenticity are present, companies tend to keep their product portfolios narrow and withdraw non-authentic products even when product proliferation strategies would be more efficient to deal with competition.
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