Web Site Address Employees Annual Sales Market Share
Stock Value BASH
Brewing Co. www.bashbrewingco.com 30
Projected: 100,000 bbls New to market Privately owned Boston Beer Co. www.bostonbeercompany.com 700 1,841,348 bbls 20.20% $159.64 Sierra Nevada Brewing Co. www.sierranevada.com 500 723,880 bbls 7.94% Privately owned New Belgium Brewing Co. www.newbelgium.com 365 583,160 bbls 6.40% Employee owned Strengths
Boston Beer Company, known best for its Sam Adams Boston Lager, currently has the largest market share in the craft brewing industry at 20.20% and owns 1% market share of the beer industry. With its strong market position, Boston Beer Company is undoubtedly the most formidable competitor in the craft brewing industry (Koch, 2011). Sierra Nevada Brewing Company, at almost 8% market share in the craft brewing industry, is best known for their Pale
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Ale, the second most sold craft brew in the United States. Named “Green Business of the Year” by the EPA in 2010, Sierra Nevada is one of the most environmentally friendly brewing companies and is often cited as a pioneer in green brewing (Grossman, 2012). New Belgium Brewing currently has about 6.40% market share and is 100% employee owned. New Belgium Brewing has one of the strongest fan bases with its bicycle festivals and is partly responsible for the reintroduction of wood beers in the United States (Orgolini, 2007). BASH Brewing Company takes advantage of its new-to-market identity in the craft brewing industry by marketing the company as a truly quality, specialty beer provider. BASH prides itself in its core competency of brewing 100% malt products without any adjuncts at reduced Greenhouse Gas (GHG) emissions. Weaknesses
Boston Brewing Company’s strong market position can be seen as both a blessing and a curse. While its increased popularity has led to growth, it also detracts from its identity as a “craft” beer. Focusing less on current market trends of increasing demand for specialty beers, Boston Brewing Company identifies Corona and Heineken has their competitors, leading to fluctuating quarterly results (Koch, 2011). Sierra Nevada is currently expanding its business by building a second brewery with an attached restaurant. Its primary weakness is in the transitional phase of focusing entirely on their successful brewery to dividing its attention between the functional brewery and the new brewery, set to open in early 2014 (Grossman, 2012). New Belgium Brewing Company’s weakness is in its limited distribution (currently at 30 states). New Belgium avoids selling to large states with craft beer awareness such as Pennsylvania, New York, and Massachusetts, in fear of being unable to fulfill orders. While New Belgium aims to build new breweries, its current brewery is not as environmentally friendly as it can be and is currently experiencing process changes to better their environmental standards (Orgolini, 2007).
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BASH Brewing’s primary weakness is its lack of market share and presence on shelves and beer gardens due its newness to market.
Opportunities
Boston Beer Company has found opportunity in the increasing popularity of hard ciders, which increases their customer base to those who are allergic to gluten and generally avoid beers (Koch, 2011). Sierra Nevada has found a niche in building “tasting rooms” which also serve as music venues for up-and-coming American, roots, and folk artists. The new trendiness of these music genres have provided greater opportunities for Sierra Nevada to market their beers (Grossman, 2012). Similarly, New Belgium Brewing Company has claimed the attention of the bike community and film industry by associating the brand with those populations through bicycle festivals and promotions at film festivals (Orgolini, 2007). BASH considers its largest opportunity in the beneficial trend of local specialty beers. Moreover, the industry is continually growing and diluting the market concentration, allowing smaller breweries such as BASH to grab some shelf space.
Threats
Although Boston Brewing Company is the largest player in the craft brewing industry, it specifies Corona and Heineken (and other imported beers) as formidable competitors due to their status of “better beers” that are non-craft. Additionally, large companies such as Anheuser-Busch InBev and SAB Miller are starting to enter the craft brewing industry due to its increased popularity (Koch, 2011). Sierra Nevada’s primary competitors are Boston Brewing Company and smaller breweries that are diluting market concentration (Grossman, 2012). Similarly, New Belgium Brewing Company cites similar companies as competition (Orgolini, 2007). BASH’s sole competitors are comparable new companies claiming the attention of our target customers,
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beer enthusiasts. Unlike Boston Brewing Company, Sierra Nevada, and New Belgium, BASH’s vulnerability is simply its size, whereas competitors are facing the dilemma of growing their business despite their reputation as “craft” and “specialty”.
Customer
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The beer produced in this process should meet certain customer specifications in order to guarantee the success of the proposed process. Factors that must be considered include the appearance and flavor profile of each variety, the practices employed by the brewery, and the ease with which customers can obtain the product.
There are a number steps in the brewing process that can affect the appearance of the beer with minimal effect on the taste or quality. For example, some impurities in the beer might result in increased turbidity. While these factors do not affect the quality of the beer, it is essential to maintain color and turbidity standards of the beer in order to deliver consistent products to the customers. These factors, along with more important factors such as pH, bitterness, and alcohol content will all be tested for each batch produced in a designated quality control facility, discussed later in this report.
A growing concern for the environment has led many consumers to pay more attention to the practices employed by companies they choose to patronize. As a result, it is very important to minimize emissions and maximize energy recovery in this brewery design. Recent experience has shown that most customers are willing to pay a premium for goods and services that are more environmentally friendly, so additional costs associated with a greener plant design should not be an inhibiting factor in our analysis.
Finally, customers value convenience. All of the core varieties, and all but three of the seasonal and limited edition varieties produced will be offered in both kegs and 12 oz. bottles, allowing customers to enjoy our brews at their favorite watering holes as well as to bring home a six-pack for later. As a craft brewery, distribution will primarily be on a local and regional level, but it will be essential to ensure that our products gain shelf space in both large and small retailers within the region.