Sandwich Blitz Unit 3 Assignment

* Distributed through province owned stores in all provinces except Alberta, Quebec, and BC where private distributors also exist.

Chris is considering the production of a light beer for Mountain Man Brewing Company as a way to compensate for the recent decline in sales and increase in the market for light beer sales. How can the production of a light beer appeal to a younger demographic. What about their light beer will be different from competitors. How much is this new product going to cost and how will he go about launching the new product. How long is it going to take before the company begins to break even and then make a profit?

In order to grow, Boston Beer must continue to increase its market share in the overall beer market. The market continues to be dominated by the large scale breweries like Anheuser Busch, Adolph Coors Co, and Miller Brewing Co. Craft Breweries are beginning to increase their share in the overall market. It is expected that craft breweries will account for 5% of the overall beer market in 2000, up from 1.4%. However, there is increased competition in the craft beer market. There were 165 new craft brewers in 1994. This increased the total of craft breweries in the US to 750. Boston Beer will be competing with these 750 breweries for 5% of the 5 billion in US beer revenues.

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.

The purpose of this research paper is to analyze Sam Adams and the global craft beer market. I will apply microeconomic models to analyze the supply and demand conditions for Sam Adams, its price elasticity of demand for products, cost of production and the overall market. There will be recommendations to maximize future profits and sustain success for Sam Adams. In this paper I will also analyze the craft beer industry and recommend actions for better management of supply and demand, improving the cost of production and the different barriers of entry that Sam Adams can utilize to impact its future in the craft beer industry. Applying the concepts of variable and fixed costs, I will make recommendations for its output decisions and profitability that will help them succeed in a monopolistically competitive market structure. In the conclusion of this paper I will make recommendations to manage future production and sustain its success, as well as evaluate the business structure and effective decision-making strategies. The craft beer industry is a monopolistic competition because it has the ability to allow many firms to produce similar good or services, but it at the same time allows each firm to make independent production decisions and differentiate their product from the competition by creating its own pricing.

The next project was bottling Gordon Biersch signature beer and retailing it. This had three biggest challenges: this project was entirely Gordon’s baby and demanded time and attention; secondly the freshness of the bottled beer versus the freshly brewed was an issue for which they decided the beer would have a shelf life no longer than three months. Thirdly and the most exciting challenge was the head-to-head competition with other microbreweries and premium beers. Despite the tough competitive environment, Gordon Biersch aimed to achieve 11% of the market in three years (by 1996). This retail venture required huge investment, thus they decided to start small to prove to the investors that they could pull it off.

Larry Brownlow, a young entrepreneur, wanted to operate his own business after completing graduate school. He agreed to a distributorship opportunity with Coors. The brewery company was looking at expanding their market potential of a Coors beer distributorship to a two-county area in southern Delaware. Brownlow used his resources to find and contact Manson and Associates, a research company,

In addition to selling beer in bottles and cans, the distributorship will also sell kegs (contribution margin of 1/3 of beer in bottles and cans). The case states (p. 280) that keg beer prices at the wholesale level were about 45% of prices for beer in bottles and cans. These two facts can be combined with wholesale costs and prices for beer in bottles and cans to produce an overall weighted average contribution.

The documentary shows how the two small beer entrepreneurs, Rhonda and Sam try to establish themselves in the beer industry and success in the high potential market. The film shows that the beer industry is governed by some difficult and outdated laws along with an oligopoly of the large brands. These large brands manipulate the beer industry by acquiring and buying off the smaller brands which they find competitive among the market. The small brewers thus face difficulties and barriers establishing themselves in the American beer industry. The big giants like the Coors Brewing Company, Anheuser-Busch, and the Miller Brewing Company face challenge from the independent craft beer producers when these new brands are put on shelves; so they seek ways to prevent distribution and production of these small brands, which is harmful for the competition in the beer industry. Sam Calagione and Rhonda Kallman are considered as small entrepreneurs in the beer industry who struggle from the large brands, the difficult laws, and the less competitive but highly profitable

The brewing industry can be characterized by Porter’s Five Forces framework. New entries to brewing have a relative ease in creating home micro-breweries, which is aided by

Within the craft beer market, consumers have many products to chose. A product is anything offered within a market that which fulfills a want or need (Armstrong & Kotler, 2015). In 2012, over 1,750 breweries operated in the United States (U.S.), with over 1,920 the following year (Brewers,

Distribution channels interfaces the association 's item or administration to its purchasers; and in a maker buyer (administer supply) channel, as on account of Starbucks, keeping up a faculty association with the clients is critical (Brassington & Pettitt, 2000). However, from a dissemination perspective Starbucks got preference by adhering on to its winning store area recipe for its new stores.

The Website is targeted at retail trade: “(to) maximize the specialty beer sales opportunity through learning more about the dynamics of the category and qualities of the brand”. This has resulted in a 50% increase in sales revenue.

Beer Company 2 is a brewer of “seasonal and year-round beers with smaller production volume and higher prices” that “outsources most of its brewing activity” (pg. 120). It is financially conservative, and has undergone a “major cost-savings initiative to counterbalance the recent surge in packaging and freight costs” (pg. 120).

impact of the decision on the cost structures and the resultant margins for each of the