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Transcript of Boston Beer
Boston Beer Case Overview
Successful Product Strategies
Current Product Lineup
Sam Adams Light
Barrel Room Collection
Stoney Brook Red 9%
Limited Release Beers
Small Batch Beers
Tasman Red IPA
#1. What year was the Boston
Beer Company founded and
where did the recipe come from?
Founded in 1984
History of Boston Beer
Contracted with an existing firm
50 percent growth in 1994 over 1993
Largest microbrewery in the country
7th largest brewer by 1998
2002 “Liquid Lunch” taste-test tour
Breakout year in 2006
Consistent but slow growth
A recipe that is highly differentiated from all other competitors, domestic and international
Jim Koch's ability to recognize opportunities within a segment
New product entering the market
Brand name is unknown
Product price is high
Start up capital is difficult to obtain
Growing Sales of import beers
demand for different taste
imports have issues with freshness
Small brewers had the taste
no ability to market products
Large breweries with mass advertising
New Entrants into the market
History of Boston Beer Cont.....
#2. What is their flagship product that has been around since the beginning?
#3. What was the product that was mentioned in the case that contained a 17% alcohol content and debuted in 1994?
Successful Product Strategies
Sticking with the Original
Satisfying the tastes of loyal customers
Marketing Principle #63: “Advertising need not be complex or sophisticated to be effective; simple, straightforward ads can be effective too.”
Successful Product Strategies Cont...
Differentiation of Product Line
Higher Alcohol Content Beers
Diversification with Angry Orchard Brand
Holds 40% market share
Fastest growing product
Expected to be 20% of total revenues by 2015
CEO Jim Koch
Marketing Principal #1392 “Dreamers do not make entrepreneurs, doers do.” (Robert F. Hartley)
Potential risk of the segment size for premium good-tasting beer
Amassing sufficient capital to start their new venture
Would have to sell at a 15% higher price than competitors to break-even
Finding distributors due to the already saturated market and known brands
Problems that were faced
#4: How did Koch overcome the threat of high prices and allow his product to be successful?
Slow expansion could be both good and bad
Big competitors ability to dominate any segment they chose to participate in
Ease of entry into the industry which encourages a host of competitors
3000 microbrewers in just a few years
Marketing principle #1422: “If you don’t believe, how can you expect the customer to?” –Roger Cartwright and George Green
Strong Sales Execution
Good quality of beers
Great innovation capability
How they continued growth
#5: What was the reason behind their controlled growth.....
a.k.a. “aggressive moderation”?
C&C Group PLC
“Michelob Ultra Cider”
U.S. Now has 2,538 brewers, the most there has ever been since 1887
Record Stock Prices
Unveiled New Products
Pursued Corporate Social Responsibility
Increased Investment in Advertising, Promotion and Selling Expenses
Between $34 million and $42 million projected this year
More than 50 styles of beers
National Price Increases approximately 2% to offset inflation
Marketing Principal #586 “Successful entrepreneurs are led by their dreams, not pushed by their problems.”
Marketing Principal #909 “Success tends to create a momentum that generates continued success” (RH, SA).
#6. What year did Boston Beer Company announce the Initial Public Offering (IPO)?
With the success of spin off brands like Angry Orchard and Twisted Tea, Boston Beer needs to continue to diversify
Look to expand
Adding additional breweries for current products
Buying out small craft breweries to add to the Boston Beer family
Introduce product lines to Asia-Pacific market
Marketing Principal #952 “Competition should not be for a share of the market, but to expand the market” ( J. Deming
Possibly offer a non-alcoholic beer
End of 2013 SWOT Analysis
Boston Beer has a dominant market position that is built on a strong brand portfolio
They manufacture most of their beers at breweries they own themselves.
Lack of Scale
Growing demand in the U.S. for craft beer
Demand for beer in the Asia-Pacific market is increasing
Stringent regulations pose a threat to all breweries
There is a rise in the production of counterfeit alcohol
IPO announced in August of 1995
Stock Price as of market close yesterday $234.30
He truly loves brewing beer
“What would I do if I did sell?”, “I’d go looking for a brewery to buy so I could launch my own brand.”
Helps other entrepreneurs
Samuel Adams Brewing the American Dream program
Has social media presence
April Fools ad
Samuel Adams website http://www.samueladams.com
XNYS:SAM Boston Beer Company, Inc. Class A Annual Report. 28 Dec. 2013 <http://quote.morningstar.com/stock-filing/Annual-Report/2013/12/28/t.aspx?t=XNYS:SAM&ft=10-K&d=3b742cf71bfc2f605f003ea52db8af26>
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