BUSA 499 CapstoneFinalPaper-3 - BetweenaPintandaKeg BostonBeerCompany,Inc Microsoft account The following is an analysis of the Boston Beer Company(BBC

BUSA 499 CapstoneFinalPaper-3 - BetweenaPintandaKeg...

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PACIFIC LUTHERAN UNIVERSITY Between a Pint and a Keg Boston Beer Company, Inc. Microsoft account 5/14/2015 The following is an analysis of the Boston Beer Company (BBC). The BBC is the second largest craft brewer in the United States and the second largest American owned brewery. Background is given on the BBC, its competitors, and the industry as they are today. After extensive research, analysis of markets, trends, and competitors we have provided the BBC with recommendations on how to improve its business and grow as a company.
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Introduction   Boston Beer Company sets the standard for high quality craft beer. Founded in 1984 by Harvard Business School graduate James Koch. Koch rediscovered his great grandfather’s beer recipe and he called it Samuel Adams. Boston Beer has come a long way since the early days of brewing in Koch’s garage. They have expanded have expanded their brands into other markets with the addition of Twisted Tea in 2001, Alchemy and Science in 2010 and Angry Orchard in 2011. Boston Beer is currently stuck between being one of the largest craft brewer and the smallest “big beer company.” Boston Beer is in a critical situation: to stay pint size or go for the keg. Current External Environment The external environment for the BBC is an extremely competitive one. The general environment is one that is changing with the economy back on the rise and new trends in the tastes of the younger generation. The rise of microbrews and the trends of IPA’s have made the Samuel Adams Boston Lager less desirable to customer’s ages 21-34. The industry has become extremely competitive with the tenth straight year of growth for craft brewers, up 19% in 2014, in the U.S. growing from 420 breweries in 2006 to over 5,200 breweries in 2014. Rivalry with big beer companies AB InBev and MillerCoors, who control 90% of U.S. domestic beer production, has intensified with their entrance into the Better Beer category (Figure 2). The domestic beer segment has seen its growth start to decline as Better Beer (up 7%) grabs more
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market share even though the total beer market has remained flat (Figure 2) (The Boston Beer Company, Inc. Annual Report, 2014). The BBC has also become so large that small craft brewers think of them as part of the Big Beer companies, this brings an entirely new challenge to the table as the BBC is now stuck in the middle between two groups. Their capital market stakeholders include the 13 million shareholders and founder/chairman Jim Koch. Product market stakeholders include the 350 distributors that the BBC sells to, the five cities, Boston, Cincinnati, Philadelphia, Los Angeles, and Miami, their breweries reside in, the hop and barley farms in the U.S., Germany, England, Canada, Czech Republic, and New Zealand, and the three workers unions they have contracts with. Their 1,325 employees make up their organization market of stakeholders (The Boston Beer Company, Inc.
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  • Spring '15
  • CatherinePratt
  • Business, The American, The Boston Beer Company, Boston Beer Company, Boston Beer, Boston Beer Company, Inc

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