Samuel Adams Beer Competitive Analysis

In 1844, the Empire Brewery was founded by Jacob Best and his sons in Milwaukee, WI. In 1860, Jacob’s son Phillip took over and renamed the brewery the Phillip Best Company. Phillip’s daughter, Maria married a steamship captain, Frederick Pabst. Captain Pabst sold his shipping interest and bought a partnership stake in the brewery. In 1872, Captain Pabst became President of the company. In 1889, he renamed the business the Pabst Brewing Company.

     In this paper I will be talking about the U.S. beer industry and in short an overview of the brewing industry worldwide. I will talk about the barriers to entry, economies of scale, government intervention, pricing, current market trends, product differentiation, and imports. The focus being mainly on the U.S. brewing industry oligopoly. The U.S. brewing industry has three major players: Anheuser-Busch, SAB Miller, and Coors/Molson. Anheuser-Busch is currently the largest brewer in the world, producing over 100 million barrels a year. Anheuser-Busch currently owns over 50% of the market in the United States, with Miller trailing behind at 20% and Coors at about 11% with the rest of the market occupied by imports and craft breweries. When analyzing any industry, how easy it is for newcomers to enter the market is a great importance. If there are high barriers to entry

In terms of quality, the company created a premium beer by its selective use of ingredients and less water. Boston Beer has won honors such as being the first American beer sold in Germany due to its use of only barley, yeast, hops, and water as its ingredients. With the increase in health consciousness among beer drinkers and the rise in more distinctive and flavorful brews, the Boston Beer Company has been able

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.

In a time of voyages and exploration there was a new atmosphere surrounding not only Europe but also the newly discovered Americas. Of course with a new era must come and new favorite drink of choice amongst the people. For the Colonial age this beverage was spirits. By popularizing a technique known as distillation a new range of drinks were on the rise. When originally cultivated spirits were primarily used for medical purposes. The appeal then turned to how easily people were intoxicated by it and how much easier it was to store. Distilled drinks then became popular mainly because of increased durability and could more compactly fit on ships. Distilled drinks were more easily traded, traders were able to fit more alcohol in the ship much

Distilled spirits were created by Arab chemists by distilling wine and using the residue as medicine.

After two distillations, the clear, colorless alcohol is given itsdistinctive nutty brown color and flavor by aging wood, often oak barrel. The longer abrandy ages, the more refined its flavor is judged to be. Brandy is a spirit made by distilling grapes to a higher proof than they achieve

- The recent market position of Samuel Adams beer is very strong, as well as growth prospects.

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.

Because Samuel Adams prides themselves on being a top notch craft beer producer, a lot rides on their reputation. Boston Beer and Samuel Adams have a strong reputation that rivals even the biggest of beer producers.

Several attempts have been made by Boston Beer Company to continue on a growth streak but not all attempts have been successful. The main goals for Boston Beer Company are to increase revenue and continue growing in the industry. Boston Beer Company has had trouble growing as barriers of entry are low and competition is high. Even though the market has seen a slight upturn, however Boston Beer’s founder Jim Koch elaborates on the company’s dissatisfaction, “We are disappointed with our depletion trends in 2016, which have remained weak so far in 2017. These trends are affected by the general softening of the craft-beer category and cider category and a more challenging retail environment with a lot of new options for our drinkers”. (https://www.fool.com/investing/2017/02/22/boston-beer-finds-growth-the-hard-way.aspx)

Boston Beer, in response to consumers’ preference changes to more flavorful and bitter tasting brews, was founded in 1894. Boston Beer implements a “quality at any cost” strategy with a strong emphasis on product differentiation and implementing quality ingredients into its products. For instance, Boston Beer was the first company to employ a stamped freshness date on its bottles and ingredients are imported from around the world. Additionally, Boston Beer relies heavily on contract brewing to gain competitive advantages. Boston Beer’s contract brewing strategy results in lower overhead and transportation costs, as well as

The Adolph Coors Case Study proved the dedication and self-reliance Coors brings to the beer industry. Having overcome great adversity by surviving the prohibition years, Coors durability and sustainability are also complimentary points on the structure of the company. Coors is a family owned company that had humble beginnings in Colorado and within 100 years grew into a multimillion-dollar company. Coors’ controlled manufacturing process is a sign of their individuality in the beer industry, this was not an unknown fact, however, as they were receiving orders to ship Coors beer all across the nation as of 1972. The case study allowed an internal and external point of view, which was highly beneficial to properly analyze their upcoming problem within the company.

Import beer companies have a similar market share of 12% and have a common denominator with the regional brewers; their beers tend to have bitter taste. Demands for these beers are on the rise.

Boston Beer Company (SAM) is a brewery in Massachusetts most commonly known for its Samuel Adams line of “craft” beers. The Samuel Adams line of beer was introduced in 1985. Since then the company has grown to do over 580 million dollars in revenue each year. 580 million is a very small piece of the food and beverage industry but the amount of shareholder wealth they are providing is impressive. Boston Beer Company has been named one of the top publically traded businesses to watch in 2013 by Forbes.