...MRKT 5000 Marketing September 04, 2011 Jim Koch And The Marketing of Samuel Adams Beer Executive Summary Currently, the United States beer market is segmented into many segments. The two largest domestic brewers, brewers located within the United States, are Anheuser-Busch and Miller. These two companies control 50 percent and 29 percent of domestic beer sales, respectively. With 80 percent of the beer market controlled by the two megabrewers the United States is a tough environment for a small craft brewer like Samuel Adams to survive. The U.S. population is over 311 million people, the world’s third largest population after China and India. American consumes nearly 200 million barrels of beer a year, or 20 gallons per person, second only to China which has four times the amount of people the United States. Samuel Adams Boston Lager is brewed by the Boston Beer Company and founded by 1984 by Jim Koch using his great–great–grandfather’s 1870 beer recipe. Due to the economic downturn and other environmental forces the general beer market has been flat in recent years, yet quality craft beers like Samuel Adams has seen double-digit growth. The craft brewing industry has had a strong growth curve over the past decade and Samuel Adams has been positioned perfectly to capture this momentum. Technological advances have been a positive development for the Samuel Adams brewing and packaging...
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...$354.2B in sales. Of this market, approximately 60% of sales come from alcoholic beverages, with beer making up 49% of this and the remainder going to liquor (37%), and wine (15%). Despite the strong market share for beer in the U.S., sales are sliding. Since 1999, the market share for beer has decreased from 56% to below 50%. Wine sales have been flat, so consumers are beginning to switch from drinking beer to drinking liquor. There appears to be a general shift in preference among consumers to prefer other types of alcoholic beverages to beer. In addition to losing sales to a different beverage option, Budweiser is losing market share in the U.S. beer market. At its peak in 1988, Budweiser sold 50 million barrels. In 2013, consumption was down to 16 million barrels and market share had decreased from 14.4% to 7.6% in ten years. Part of this is due to cannibalization of sales from other Budweiser products, such as Bud Light. This shows a macro change in consumer preferences, favoring options with fewer calories to help combat weight-gain. Another big reason for the decrease in sales is due to consumers switching to the craft beer market. In 2015 sales for craft breweries were estimated at 24.5 million barrels (a 13% increase since 2014) and dollar-sales were just over $22 billion (a 16% increase from 2014). These sales have given the craft brewery industry a 21% share of the beer market. This increase in sales is not coming from a single competitor. There are 4,269 breweries...
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...of this publication may be reproduced, stored in a retrieval system, used in a spreadsheet, or transmitted in any form or by any means—electronic, mechanical, photocopying, recording, or otherwise—without the permission of Harvard Business School. 1 The Boston Beer Company, Inc. Making a buck at craft brewing has been as easy as falling off a barstool the last few years. So Wall Street is now bellying up for a couple of IPO brewers. They’d better start chugging; the party won’t last long. The intoxicating roundup of offerings began in August when Redhook Brewing, a specialty beermaker started in Seattle by former wine marketer Paul Shipman and Starbucks co-founder Gordan Bowker, tapped the market. The stock was priced at $17, never traded below $24.75 and was recently at $27.25. Again, investors went on a bender last month when Pete’s Brewing Company hit the market. The stock, priced at $18 a share, closed its first day of trading at $25.25 and hasn’t sold below $23.75 yet. Boston Beer, of Sam Adams fame, will roll out in mid-December; the Northwest’s Hart Brewing, which makes Pyramid Ales, is not far behind. 1 Eileen Gunn Fortune Magazine, December 11, 1995 Company Background History Boston Beer Company (BBC) was founded in 1984 by Jim Koch, who was the sixth generation of his German family to become a brewmeister. During the early 1980’s,...
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...trends in the global beer markets. There are many trends in the global beer markets that effect how companies do business. One trend is that each country has different local taste and specific recipes to achieve their beer. China now has the largest beer market, surpassing the United States in 2003. The United States has six times a higher consumption of beer than China. The top three breweries of beer controlled almost 80 percent of the U.S. market. Vertical integration and economies of scales were the main drives to operating margins. “The fact that Anheuser-Bush could capture 75 percent of the industry’s total operating profits emphasized the volume effect in the industry” (Thompson, Strickland, & Gamble, 2010, p. C-251). Mexico was one of the world’s largest beer markets. Even though brewing has historically been a local industry, the last couple of decades have been increasing consolidation within the industry. The consolidation began to include breweries in the growth markets of Eastern Europe, Asia, and Latin America. The top 10 breweries account for 59% of the market in 2008. Beer consumption varies across the world. “In mature Western European markets volumes are broadly stable or declining modestly” (“Trends,”2008, p.14). In less mature markets in Asia and Eastern Europe are growing, and some at a rapid rate. Volume drivers have primarily been driven by growing disposable income, improvements in the quality of beer, marketing and advertising activities...
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...2011 Problem Definition Facing decline in annual sales, changes in beer drinker’s preference and continuous growth in light beer sales in the whole beer industry, Mountain Man Brewing Company (MMBC) is standing at a crossroad as to whether or not introduce Mountain Man Light to expand consumer demographic into younger consumer segment and capture light beer drinkers. Advantages of doing so were obvious, however, the possibilities of diluting the Mountain Man brand equity, alienating the core customer base and cannibalizing sales of Mountain Man Lager were some real risks that could irreversibly damage the brand. Thus they need to address two issues: whether or not to launch Mountain Man Light and what strategy to employ for the introduction of Mountain Man Light. Pros of Launching the Mountain Man Light As the only beer category demonstrating consistent growth, light beer had been steadily gaining market share, increasing from 29.8% in 2001 to 50.4% in 2005. This was high growth rate that any beer manufacturer should not ignore (Exhibit1). Furthermore, Mountain Man Light would have different customer demographic and different distribution channels from that of the existing Mountain Man Lager thus minimizing the risk of cannibalizing Mountain Man Lager’s current sales. First of all, launching light beer would bring younger drinkers to the company’s customer segments, which primarily drove the changes in beer consumption. Most industry observers identified that younger drinkers...
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...application and threats from other brewing companies. All of these specific key factors are very important in assessing a company's core competencies and a practical promotional plan for future endeavors. Strengths- Lion Nathan Brewing Company has numerous strengths that give their company a competitive advantage over other premium-style beers sold in the same areas. -In 1999 Lion Nathan was an international brewer with three geographic locations around the world: New Zealand, Australia, and China. This is an important strength because it gives them a very broad customer base and allows the company to experiment with new products and new ideas. This is also a very important advantage because it allows the company to be more specified and focus only on premium beer. -Lion Nathan China Brewing Company also had a portfolio of over fifty brands and owned and operated ten separate breweries. This is a vital strength because while focusing on premium beers the company has the freedom of catering to many types of customers. For example a beer that is popular in Australia might not be a huge hit in China. -The br ewery exports various types of beer to over fifty countries...
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...Entry and Diversification: Corona Beer (Modelo) Case Analysis Shirley Saucer Strategic Management BUS 599 Strayer University Professor Petty Introduction Corona Beer is the flagship for the Modelo Company brand. With ninety years of relevance in the alcohol beverage industry, undoubtedly Modelo has set certain standards and criteria, which many have taken notice. The Modelo Company has easily earned its stake within this industry, persevering through strife’s such as the prohibition era. In operation since March of 1922, Modelo has solidified what it means to be a top contender in the imported beer market. In fact they are one of the only brewing companies that are still family owned and operated. Within this paper we will discuss the trends in the global beer market, Modelo's international expansion, as well as challenges that they face from competitors such as the InBev Company and whether or not they should diversify their business strategy which has made them so successful. Beer has been brewed since around the 14th century when it got its beginnings in Europe. Beer comes in many flavors and shades and is varied depending on regional brewing methods. A lot has changed since the humble beginnings of beer brewing as a craft. With that being...
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...place the firm wishes to occupy in its’ target customers’ minds” (Silk, 2006, p. 90). In the case of MMBC, the definition of the target customer was under discussion. For purposes of the first question, I developed the following positioning statement based on what I believe was the historical perspective of MMBC. Mountain Man Brewing Company produces Mountain Man Lager; the most authentic regional beer for working class East Central Americans, among all premium domestic beers, because of its distinctive quality, bitter flavor, slightly higher than average alcohol content and competitive price (Abelli, 2007, pp. 2-3). This positioning statement would help MMBC to target its product toward the blue collar worker in the East Central region. While not specifically stated in the case, I believe Mountain Man Lager met the following needs of this target audience: a need to feel toughness, pride in an East Central quality product, and an affordable price. MMBC’s strategic focus on this target audience helped it to be successful in the highly competitive market for premium beers, even when other local brewers went out of business. Their success was due to a loyal customer base, high brand recognition and support, and a product with high perceived quality. The sole brand loyalty rate for Mountain Man Lager was 53% which was higher than the rates of competitive products such as Budweiser at 42%, and Bud Light at 36% (Abelli, 2007, p. 5). The case states that the Mountain Man...
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...parks across the United States through the company's family entertainment division, Busch Entertainment Corporation. It is headquartered in St. Louis, Missouri. AB’s objectives as a corporation are: * To increase domestic beer segment volume and per barrel profitability which, when combined with market share growth will provide the source for earnings per share growth and improvement in return on capital employed. * To provide a great tasting fresh beer to our consumers by limiting self life to 110 days, and providing a “born on date” on all our products. * To build a high-performing, diverse workforce, while providing a safe, productive and rewarding work environment, in which all our employees can benefit. * To be a good corporate citizen and good neighbor in every community where we do business and promote the responsible consumption of our products. * To preserve and protect the environment and support communities where we do business, by complying with all applicable environmental laws, regulations, and permits. Products and Services Anheuser-Busch's best known beers include brands such as Budweiser, Busch, Michelob, Bud Light, and Natural Light. The company also produces more than 100 beers, import beers, specialty beers, nonalcoholic brews, malt liquors ( such as King Cobra and Hurricane), and flavored malt beverages (e.g. the Bacardi Silver family and...
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... HEINEKEN COMPANY The Heineken beer company was founded in 1864 by Gerard Adriaan Heineken, a Netherlander, in Amsterdam. This Dutch brewing company has wide international presence so far through a global network of distributors and breweries . Heineken owns and manages one of the world’s leading portfolios of beer brands and is one of the world’s leading brewers in terms of sales volume and profitability. Recently, Heineken has been considered as the most successful beer brand and is an icon in the beer industry. In a market where local beer always enjoy much favor, Heineken not only occupies the hearts of Europe, but also popular worldwide, becoming the leading brand of beer, and is considered No.1 imported beer in America. Heineken beer is ubiquitous and this company owns 110 factories in over 60 countries, beer production volume up to 109 million annual hectoliter. There are two main beer products of Heineken: long neck bottle and tactile can. All the Heineken products are made in Holland by the traditional recipe from 1873. Thanks to a special enzyme, called Heineken "A-yeast", has brought Heineken beer a unique characteristic flavor. This is also a main different point of Heineken among other beer brands. Heineken approaches customers by quality factor and Heineken always ensure that their products are processed in the most standard conditions. The slogan of Heineken is “Heineken refreshes the parts other beers cannot reach”. Although The Heineken brewing...
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... HEINEKEN COMPANY The Heineken beer company was founded in 1864 by Gerard Adriaan Heineken, a Netherlander, in Amsterdam. This Dutch brewing company has wide international presence so far through a global network of distributors and breweries . Heineken owns and manages one of the world’s leading portfolios of beer brands and is one of the world’s leading brewers in terms of sales volume and profitability. Recently, Heineken has been considered as the most successful beer brand and is an icon in the beer industry. In a market where local beer always enjoy much favor, Heineken not only occupies the hearts of Europe, but also popular worldwide, becoming the leading brand of beer, and is considered No.1 imported beer in America. Heineken beer is ubiquitous and this company owns 110 factories in over 60 countries, beer production volume up to 109 million annual hectoliter. There are two main beer products of Heineken: long neck bottle and tactile can. All the Heineken products are made in Holland by the traditional recipe from 1873. Thanks to a special enzyme, called Heineken "A-yeast", has brought Heineken beer a unique characteristic flavor. This is also a main different point of Heineken among other beer brands. Heineken approaches customers by quality factor and Heineken always ensure that their products are processed in the most standard conditions. The slogan of Heineken is “Heineken refreshes the parts other beers cannot reach”. Although The Heineken brewing...
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...One such small business is the New Belgium Brewing Company, Inc., based in Fort Collins, Colorado. History of the New Belgium Brewing Company The idea for the New Belgium Brewing Company began with a bicycling trip through Belgium. Belgium is arguably the home of some of the world’s finest ales, some of which have been brewed for centuries in that country’s monasteries. As Jeff Lebesch, an American electrical engineer, cruised around that country on his fat-tired mountain bike, he wondered if he could produce such high-quality beers back home in Colorado. After acquiring the special strain of yeast used to brew Belgian-style ales, Lebesch returned home and began to experiment in his Colorado basement. When his beers earned thumbs up from friends, Lebesch decided to market them. The New Belgium Brewing Company (NBB) opened for business in 1991 as a tiny basement operation in Lebesch’s home in Fort Collins. Lebesch’s wife, Kim Jordan, became the firm’s marketing director. They named their first brew Fat Tire Amber...
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...Industry Overview: Craft Breweries & Microbreweries Craft breweries and microbreweries produce beer in limited quantities when compared to large breweries (generally under 10,000 barrels per year) and usually distribute their beer within a limited geographic region. Craft breweries often specialize in specific styles of beer, and focus on providing customers a superior product, using traditional brewing techniques. Certain craft breweries sell beer directly on their premises, and are called brewpubs. Craft breweries are known to develop clever marketing strategies with limited budgets in order to connect with their target markets. Industry Overview BC In 2009, 209 breweries were identified by Statistics Canada and 49 of those establishments were located in British Columbia. However, an article by The Province estimates that by the end of 2013 there will be more than 60 independent breweries (this number includes microbreweries, nanobreweries and brew pubs). This increase in breweries is mirrored by an increase of 6.4% of microbrewery beer sales in British Columbia in March 2007 to 12.7% in March 2011. In the last two years, this number have only grown. In an article published July 3, 2013, The Province asserts that craft beer is almost at 20% of the market share for beer in British Columbia, while BC Business cites the Craft Brewers Association of British Columbia in stating that the market share is currently around 15% but that many brewers are experiencing sales growth...
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...dreaming to set up his own beer company. Since then, Busch has provided several tastes of the beer he has created to his customers and improved the tastes throughout the years. Afterwards, through the success of creation, Busch has decided to name the beer, Budweiser Lager Beer because of dark ales and robust that was chosen by their customers. The designs, styles, model, and the company’s process of keeping Budweiser a success, has become the nation’s number one taste. Referring to Budweiser, Anheuser-Busch was based in St. Louis and became the top leading American brewer that holds up almost 48 percent share of United States beer sales to worldwide retailers. They also have about 12 or more of breweries major manufacturer across of the United States. It was greatly popular worldwide and still counting. As for those process of grow business worldwide, it was their mission and vision to provide enough Budweiser for millions of customers. Taste Process Ever since the opening of Budweiser founded by Busch, he has been experimenting varies of tastes that he thinks his customers would like. At first, Busch decided to provide both different tastes: dark ales and light lagers. Few of them have alcohol, some of them are not. Throughout the experiment, Americans prefer dark ales but also like light lagers and made Busch to have a perfect creation of taste. It was successful. Coming from the fact sheet by Budweiser, their taste profile shows that their beer is very fresh, malt sweetness...
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...INFLUENCE OF MARKETING AND ADVERTISING BY THE ALCOHOL INDUSTRY ON YOUNG PEOPLE’S ALCOHOL CONSUMPTION Research prepared for the World Health Organization by the Centre for Social Marketing at the University of Strathclyde Emma Cooke, Gerard Hastings and Susan Anderson March 2002 Acknowledgements For acquisition and translation of international data: Jill Bain, Marina Biniari, Liliana Carcamo and Ingrid Kajzer. For comments on the final draft: Anne Marie MacKintosh For administrative support: Kathryn Angus and Aileen Paton. CONTENTS Page No 1.0 INTRODUCTION 1 2.0 MANAGEMENT SUMMARY 2 3.0 METHODOLOGY 4 4.0 RESULTS 7 4.1 Advertising 7 4.1.1 Econometric Studies 7 4.1.2 Consumer Studies 11 4.2 Other Forms of Marketing 15 4.3 Developing and Transitional Countries 21 REFERENCES 25 1.0 INTRODUCTION At the World Health Organization Ministerial Conference on Young People and Alcohol in Stockholm (February 2001) considerable concern was expressed about the nature and pervasiveness of advertising and marketing by the alcohol industry. Explicit examples were shown of alcohol promotion exploiting the themes of sexual, sporting and lifestyle success, often in direct violation of advertising codes. Furthermore, many of the advertising examples displayed images of excessive consumption. In addition, the Conference noted that marketing stretches beyond...
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