Executive Summary Of Not Your Father's Root Beer

In a world where large, corporate breweries rule the market, craft beer is created to please an audience that applauds the styles, techniques and flavors. Though craft beer can be purchased through several different outlets, the best place to thoroughly enjoy the entire experience of the specially made beer is in the brewery where it was made. The article titled, “In Lean Times, a Stout Dream” in The Wall Street Journal1 states that, despite the hard economic times and consequent consumer cutbacks, sales of craft beer, the industry 's fastest-growing segment, rose

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.

New Belgium is, however, the third-largest craft brewery in the nation, with estimated sales of over $100 million, equaling approximately 700,000 barrels of beer per year. An analysis of the craft beer industry as a whole suggests that there is continued growth potential for New Belgium. Exhibit 5.1 of the New Belgium Brewing (B) case shows that craft beer is the fastest growing segment of the U.S. alcoholic beverage market, with an increase in market share of over 100 percent from 1999-2011. It is also an industry whose customers tend to be extremely loyal, making them less likely to view craft beer as a commodity. Consequently, craft beer has a higher probability of being immune to competition from inferior goods and substitutes. This is particularly applicable to New Belgium’s target market of “beer connoisseurs” that appreciate the high quality and taste of craft beer and who include “executives, lawyers, and accountants” with the continued ability to pay higher prices for craft beer, enabling the craft beer industry to achieve gross margins of up to 30 percent (Clark & Rogler, 2013).

A documentary film made in 2009, Beer wars features and describes the American beer industry distinguishing between the large and small breweries. The large breweries feature some main corporate companies like Coors Brewing Company, Anheuser-Busch, and Miller Brewing Company whereas the small breweries include craft beer producers like Moonshot 69, Stone Brewing Company, Dogfish Head Brewery, Yuengling, and others. The documentary shows how the beer market is controlled through advertising and lobbying, which is harmful for the competition in the market. There is a reason why the small companies are falling behind and the large corporates are controlling the market, which in turn makes it essentially oligopoly economy.

Executive Summary - Coors’ prominence in the beer industry has always been overshadowed by its bigger competitors like Budweiser, Miller and Molson, but new insights unearthed by this report may pave new roads for a more exciting future. The first part of our analysis describes the typical Coors drinker as an aged 25 to 44 male light beer drinker consuming almost seven bottles a week. He also works in a managerial or professional occupation earning over $30,000 annually. Coors’ three competitors also exhibit a similar consumer base with the exception of Molson being predominantly regular beer consumers. These conclusions are tested to be statistically significant.

Their updated mission statement and slogan reflects a renewed outlook for potential sales – building forever. Brown-Forman considers every adult of drinking age to be a possible and probable customer. This mindset underscores the forward-thinking embraced by company principles. As well, Brown-Forman has recently purchased four breweries across the country to support another expansion strategy. The company intends to expand their presence in the ‘beer’ market and will piggyback their promotions on other ‘made in America’ campaigns that have been successful for a plethora of other products in the United States. Finally, certainly one of their most strategic plans is to be in front of the concern for problem drinking by promotion the idea of ‘drinking responsibly’ in all their ads.

Beer has a long history. In 2000 B.C.E., Sumerians had prepared eight different beer types, ranging from “strong,” “red brown,” and “good dark” (Mauk, 2013). Breweries have created their own recipes, brewed their own beers—some with alcohol, some without. Over the past few years, craft beer gained steady market share away from the national and international breweries (Murray & O 'Neill, 2012). Separating one beer from the next is the product itself, and what the product has to offer. Competition is ferocious due to more informed, sophisticated consumers, as well as globalization and the spread of technology (Murray & O 'Neill, 2012).

Boston Beer Company has five primary stakeholders within company, Martin F. Roper (President and CEO), C. James Koch (Founder and Chairman), William F. Urich (CFO and Treasurer), John C. Geist (Vice President of Sales), and Thomas W. Lance (Vice President of Operations). Of the five of them C. James Koch holds more than 34% of the shares and is the sole holder of the class B common stock that gives him the right to appoint five of the eight members that are chosen to be on the board as seen in the following quote from the 2013 Proxy Statement. “At the Annual Meeting you will be asked to elect three Class A Directors and cast an advisory vote on executive compensation. As the sole holder of Class B Common Stock, I will elect five Class B Directors and cast a vote to ratify the selection of

Although sales of premium brands have fallen in a steady response to the growing popularity of the craft beer. The industry revenue has been stable over the past 5 years. As a result, from 2011 to 2016 the industry revenue is expected an increase and growth annually at 6.7 percent over the five years,with a total of $39.5 billion . (IBISWorld iExpert) In the long-term, these numbers are expected that grow 0.9 percent annually within the next five years. The potential growth will be seen in the traditional and premium beer sector. As a response, the giant companies in the industry Anheuser-Busch InBev and MillerCoors look forward into the merges and acquisitions as a strategy to maintain market dominance. The strategy is based on the

Through a combination of strong internal growth and aggressive acquisitions, AB InBev has taken leading positions in the most profitable beer markets in the world. AB InBev uses a strategy that focuses most of its resources on the brands that they believe have the best long-term growth potential. These resources go through continuous reductions of non-consumer and non-customer facing expenses to improve cost management and efficiency. These strategies have given AB InBev the reputation of having industry leading margins and strong cash flow generation. AB InBev’s brands are the “foundation of our company, the cornerstone of our relationships with consumers, and the key to our long-term success” (ab-inbev). Ultimately, AB InBev believes that it is their goal to be the Best Beer Company Bringing People Together For a Better World that gives them a sustainable and competitive advantage.

Budweiser - The Self Proclaimed, “King of Beers” has been produced by Anheuser-Busch Company Inc., since its introduction in 1876. Anheuser Busch is the largest brewer in the world and produces more than 100 million barrels of beer per year. Budweiser is synonymous with American culture and is known for its significant efforts in promotion. Anheuser -Busch has always put a major focus on marketing and according to Business Insider, “Budweiser was a triumph of marketing over quality, by the 1980’s had become synonymous with American Culture, and is a good part of American Tradition, like going to a baseball game or a college football game” (Business 1). Budweiser has attempted appealing to various audiences with their advertisements. From ratty, to refined, to sporty, to hipster Budweiser has adapted many of its advertisements to its target market of males between 21 and 34 years old, which is the largest population of beer drinkers. They regularly change their look and image through advertising and their commercials to adapt to the current culture. Differences in advertising can clearly be seen in the way Anheuser-Busch has used the changing roles of women from the 1950’s to present, cultural changes in society, and the redirection of their target audience to demonstrate their adaptability to the changing times, but fails to respect women. Anheuser-Busch’s recurring success and continual growth of the their brand is directly related to their ability to adapt to these

The soft drink industry, now an extremely mature market, is experiencing major growth as companies are receiving large amounts of revenue as a result of a general rise in consumers’ disposable income levels.4 This growth comes as a relief to many businesses like Glacéau because of the risk of stagnancy and economic decline in

The change in the consumers' taste is another key trend in the industry. Many substitutes to carbonated soft drinks gained more popularity among consumers. Exhibit 5 shows an increase in the consumption of bottled water from 11.8 in 1998 to 13.2 gallons/capita in 2000, and that of juices from 10 to 10.4 gallons/capita at the expense of

- Strategic market segmentation and implementation strategies. Taybeh focuses on sophisticated and educated beer drinkers.

Today, while the soft drink industry’s value has increased in 2004, the volume sales of carbonated soft drinks has declined due to a large proportion of consumers who are opting for the trend towards healthier alternatives in the functional drink segment (energy drinks, smoothies, milk & juice drinks, sports drinks) as well as bottled juices and water (ref.5). Companies have been actively engaged in new product developments in order to counter the growing concerns about negative health impacts of high-fructose drinks, but also to increase the demand in a market where product offerings are quickly maturing (ref.4). New flavor introductions and health-conscious formulations have been launched in an attempt to offset the decline in carbonated soft drink sales (ref.6). The functional market is expected to show sustained growth and consumer interest in the future years as consumption shifts to trendier, healthier and more sophisticated products (ref.7).