Coors : Coors And The Brewing Industry Essay

The Stroh Brewing Company was founded in 1850 in Detroit, MI. During prohibition the company produced soft drinks and ice cream. On February 8, 1999, the

Boston Beer Company (BBC) has enjoyed much success with their craft beers with Samuel Adams as their main focus. Being the leader of this segment, overtopping five of their competitors combined (Exhibit 1), the company now must decide how to take advantage of the light beer market. Boston Lightship, their current light beer, had been a small contributor in BBC’s product line. Currently, it is facing dwindling sales with product volumes down from 12 000 cases per month to 3000 cases per month.

Larry Brownlow is considering whether or not to apply for the distributorship of Coors in South Delaware. Coors started as a small brewery back in 1873 and has since grown to become the 4th largest seller of beers in the country. Coors focuses on high quality beer which is well known both to its suppliers and to its consuming public.

Throughout most of its history, the Coors Brewing Company (Coors) has been a regionalized brewer within the United States, specializing in high-quality beer through by virtue of its source water selection, stringent production standards, and cold filtered brewing approach. As the company expanded its distribution to new markets within the U.S. in attempt to gain market share, it made a strategic decision to maintain a majority of its brewing operations at its primary production facility in Golden, Colorado. This decision was based upon the desire to preserve its core production strengths through close family control. However, as the company desires to expand its market presence beyond the

The situation facing Mr. Larry Brownlow is a tough one. He is young with minimal money to work with. This shows that he must be careful and research all of his investing activities closely. The problem that faces him is deciding if opening a Coors Beer brewery in his area of Delaware is a profitable investment. The beer is obviously not widely carried in the area so that makes the situation that much harder. He has less information to work with. This is why he contacted the Manson Research Firm. That presents the second problem. The firm will do the research to help do a feasibility analysis, but the information is not cheap. Larry is working with about two weeks until the deadline to submit an application for distributorship. He

In 1873, Adolph Coors built a small brewery called Coors in Golden, Colorado. Now, as of 2014, this small brewery has become the largest single brewery facility in the world. Over the years, the company has expanded their market and has become the third largest brewer in the United States.

Estimates of fixed costs are reasonably straightforward and are given in the case (p.280), a total of $250,000 ($160,000+$90,000).

Mr. Larry Brownlow needs to decide whether or not to apply for the Coors distributorship in southern Delaware.

Address the following questions in a 4-5 page write-up of the Boston Beer Company Case to explore the issue of Initial Public Offerings.

In 1999, they achieved record sales and earnings, selling over 100 million barrels of beer worldwide for the first time in history. August A. Busch III, Chairman of the Board and President, says his company owes its success to, “The combination of outstanding domestic beer industry fundamentals, the highest quality and freshest beer in the industry and exceptional marketing and sales execution.”

As a business strategy, Molson Coors have achieved their goal to be an international brewing company.

Coors began to make a strong surge to compete with the other brands of beer during much of the mid 1900s. Their brewery was staying extremely busy and producing large amounts of beer. Coors also did things a little different compared to other breweries. All of their costs seemed to be at a minimal level and sales were continuing to climb. The company appeared to be going in the right direction. Coors was only operating one brewery and appeared to be doing great in the industry. The brewery was operating effectively and efficiently. The performance of the company was continuing to do well up until about 1977 (Adolf Coors in the Brewing Industry). Times began to change and performance was lacking. The

They own a diverse portfolio of well-known carbonated soft drinks and non-carbonated beverages brands. Many of their brands enjoy high levels of consumer awareness, preference and loyalty, which drive their market positions. Their diverse portfolio provides their bottlers, distributors and retailers with a wide variety of products and provides us with a platform for growth and profitability. They believe their brand possession, manufacturing and distribution are more integrated than the United States operations of their principal competitors and that this differentiation provides them with a competitive benefit. The energy beverages market experienced product proliferation and price erosion in recent years. Product proliferation resulted from line extensions, new packaging, and sizes, and market segmentation. There has also been some significant price erosion when prices declined 30 percent from 2001 to 2006.

By 1998 many companies have closed and the survivors where hit hard. Sam Adams brewing went from trading 20 dollars in 95 to only trading 9 in 98 (Marcial, Gene). Several factors lead to this burst. Big beer companies such as Anheuser Busch started to join in. With the distribution already set up and the money to back brand to a national level. Big brews attempt at recreating micro-brews where everywhere. In addition, many had an intentional lack of affiliation with the parent company. With micro-brews normally at a higher cost, 4.99 vs 7.99 for a bottle, they also saw a huge increase in profits. (Kesmodel,

Exhibit 5 shows us consumption by Type of Beer and Origin. Changes in beer drinkers’ preferences were a mean reason of declining sales. Light beer sales were growing at an annual rate of 4% per year, while traditional premium beer sales have declined annually by the same percentage. The light beers had already risen to 50.4% of total beer sales. The demand for import and craft beer was increasing. Heavy discounting on beer had caused larger beer producers to put pressure on smaller ones. Younger drinkers who were not main Mountain Man customers represented only 27% beer sales.