Wine Industry Investment Recommendations For Chib 's Clients Essay

Bonny Doon Vineyards, a successful winery business based in Santa Cruz, California, has grown from selling 5,000 cases of wine a year in 1981 to 200,000 cases a year in 1999. To keep growing and be more profitable, the business must choose amongst three possible strategic directions. The first strategy is to start importing wines from Europe into the United States. The second alternative is branching into a retail outlet for unusual wines of great value, accompanied by a high level of service. Lastly, the business’ D.E.W.N could be expanded to include wines not made by the company itself but by other wineries that follow the same values and philosophy.

As the manager of Starshine (SS) in the M&A in Wine country, the company has faced a dilemma of merge with a similar size company- Bel Vino (BV) or being acquired by the large industrial corporate- International Beverage (IB). This report valuate the deals and make judgement by evaluation. Finally, it will identify some issues related to the game.

Vincor International Inc. was North America's 4th largest producer and marketer of wines and related products by volume with leading brands in all segments of the market. Vincor has wineries in California, Washington State, British Columbia, Ontario, Quebec and New Brunswick. Its family of estate wineries is supported by an international distribution network and dedicated sales and marketing forces. Vincor's premium wine products are complemented by a variety of popular priced wines, wine kits and refreshment products. Vincor was taken over by Constellation Brands.

The scope of the innovation expertise that New World wine producers have is value-chain wide in scope, and in-depth enough to completely re-order manufacturing, fermentation, distribution channel, pricing, marketing and customer service (Cholette, 2009). New World wine producers

Bonny Doon currently has an enviable position in the 1990’s Californian wine-producing industry. The company has successfully differentiated itself from its competition and achieved a first mover advantage in terms of selling “undervalued” wines. However, due to increased rivalry and a changing and increasingly challenging market,

Vincor does market wine alternatives itself, as a way of dealing with substitute demand. Vincor makes cider and has a wine kit business division (Spagnols) that gives Vincor some product diversification. Partly because of the ease of competition and as part of the differentiation and protection of the Canadian wine industry, Vintners Quality Alliance (VQA), a quality assurance program that identifies Canadian premium grape content, assists in making start-up more difficult for those wishing to emulate Canadian wine brands. The dollars spent on marketing and brand loyalty play a large part in protecting market share and there are certain absolute cost advantages that contribute to establishing some barriers to new competition. Ultimately, there is little cost to the consumer when considering switching brands. Experimentation in wine drinking is often a characteristic of the wine drinking market and thus can contribute to promoting new substitute entry into the market.

Bonatelli Wines began their exportation to the US initially with an objective to sell 25,000 cases of wine. However, sales went beyond expectations and 200,000 cases were sold and the projection for the next year is for 500,000 cases. Bonatelli Wines is now looking to expand into another region of the market, South East Asia. If Bonatelli Wines is producing 30,000 bottles a day expanding into South East Asia will be a stretch, but can be done. If Bonatelli Wines expects to export 500,000 cases (6,000,000 bottles)of wine to the US over the next year, they will need 200 days of production leaving them 61 days (expecting they don’t work weekends) to produce wine for South East Asia. In 61 days of the year

Frieda’s Fizz is a successful soft drink business in New York for many years and they are exploring the option of expanding into other markets. The key to their current success is their reputation for offering a high quality soft drink with several unique flavors, for these reasons people are willing to the high price for their soft drinks. To help with the expansion Freda’s Frizz has implemented a balance scorecard to help them navigate through the process but they are uncertainties with some of the measures and there are pro’s and con’s with their process.

In the summer of 2008, InBev NV, a Belgian-based brewing company formed from the merger of InterBrew and AmBev, offered a bid of $46.6 billion to acquire Anheuser-Busch Co to create the world’s largest brewing company at $65 a share. The initial offer was subsequently declined in part because the company felt the offer undervalued the company greatly. InBev later increased their offer to $70 a share and in Mid-July, Anheuser-Busch accepted the offer making the total cost of the deal $54.8 billion dollars. The issue then becomes whether the offer of $70 is justifiable to InBev’s shareholders. The merger brings about two different management styles. The culture at InBev focused on extreme cost-cutting measures and profitable incentive-based compensation programs. However, Anheuser-Busch’s culture differed in that they prided itself on philanthropy, diversity, and community involvement. In addition, this company possessed many luxurious offices and corporate fleet of aircrafts. Furthermore, they invested heavily in advertising, derived most of their profits in the United States, and possessed a lackluster international expansion plan. Issues the financial managers face will be differing business philosophies in regards to marketing (“Grow/Defend/Maintain/Cash” matrix approach vs the large marketing budget of Anheuser-Busch), culture (cost cutting measures vs company perks), and the future of the twelve

Molson Coors ability to create loyal customers contributes to the company being one of the worlds largest brewery companies bringing in $5.6 billion a year in sales. The company employs 11,000 employees with 10 breweries in 3 different countries. Although the company only produces 40 brands of beer, two of them, Coors and Coors Light, were appointed top beer brands form the national customer loyalty study for three consecutive years. SABMiller, who acquired the Miller Brewing Company in 2002, produces over 200 beer brands and brews in over 60 countries. The company decided to specialize in premium brands of beer and were compensated in 2006 with a 19% increase in revenue. The company prides its self on emphasizng the fewer carbohydrates and better taste its line of beers has compared to its competitors. The company proves this with winning the Miller Light Taste Challeng, a point-of-sale taste test. Another competitor of Anheuser-Busch is Heineken NV. Heineken produces 170 beer brands and owns 115 breweries in 65 different countries with 65,648 employees. The company specializes in lagers, speciality beers, light beers, alcoholic-free beers, and soft drinks. Although competition with these companies is combative, Anheuser-Busch (ABI) continues to be the leader in brewery with higher revenues and net income. The company employs over 30,183 in 27 breweries compared to the industries average of 480

Anheuser-Busch Inbev is one of the largest breweries in the world. “Currently, Anheuser-Busch InBev has a product list of more than 200 beers, including global best-sellers Budweiser, Stella Artois, Beck’s, multi-country brands like Leffe and Hoegaarden, and strong “local jewels” such as Bud Light, Skol, Brahma, Quilmes, Michelob, Harbin, Sedrin, Cass, Klinskoye, Sibirskaya Korona, Chernigivske, and Jupiler, among others that have helped to make the company so successful. In addition,

For the purposes of this case analysis of E. & J. Gallo Winery, the wine industry is composed of all alcoholic beverages that contain between eight and twenty percent alcohol by volume. This distinction is based on the assumption that beer and the typical malt liquor contain less than eight percent alcohol by volume. The twenty percent limit is a result of state and federal tax and licensing laws. The three top competitors that are identified in this case study are E. & J. Gallo, Canandaigua and Mogen David.

Making wine is nothing else but a touch of passion, love and few drops of magic. From the first view, wine industry seems very artistic and secret at the same time. There is no doubt that hearing that Robert Mondavi Corporation is going to layoff 4% of its workforce ring the bell to the investors, at the same type the stock price dropping down dramatically makes an impression that the company is going through difficult period as the senior management is upon completing the reconfiguring future strategy. The big decision is whether to get back to original vision, and focus on the domestic market, which bring a 90% of revenues or continue diversification and keep on pursuing the vision of

Beer Company 1 is a “national brewer of mass-market consumer beers sold under a variety of brand names” (pg. 120). As one might expect, this national company has “an extensive network of breweries and distribution systems and owns some beer-related businesses” (pg. 120). It also owns several major theme parks.

Case Study: Financial performance & SWOT analysis of Pernod Ricard – Global’s premium spirits & wines