12 TRANSITIONING TO THE NEXT PHASE OF GROWTH In 2000 Brooklyn Brewery sold 30,000 barrels of its own beers while distributing 120,000 barrels for other craft brands.13Hindy and Potter grew concerned about the imbalance. There had been many benefits to running Craft Brewers Guild: their staff became extremely knowledgeable about craft beers; new products were noticed quickly; consumer insights were gleaned directly from retailersǯ ”ut the companyȂs resources were stretched and sellingAuthorized for use only in EMBA Strategy Formulation by Daniel Keum from August 2020 to December 2020.
Brooklyn Brewery: Setting the Course for Growth | Page 4 BY STEPHAN MEIER* AND DAN J. WANG†competitorsȂ beers undermined ”rooklyn ”reweryȂsmarket share. Hindy and Potter sold the division in 2003. The $10 million from the sale was reinvested in the Williamsburg plant, new IT, and a regional sales force.14In 2004 Potter decided the time was right for him to leave and he sold his part of the firm (50 percent of the companyȂs voting sharesǼ to the Ottaway familyǯ Hindy sold his voting sharesto the Ottaways in 2010 and they assumed majority and full controlling ownership of Brooklyn Brewery.15Day-to-day management shifted to Eric and Robin Ottaway, while Hindy stayed on as chairman and public spokesman. The ownership transition was smooth, according to Eric Ottaway, with the 60-plus employees16remaining a happy, tight-knit group. As he explained ȃI think people like beinghereǯǳWe have very, very low turnover. We take good care of our peopleǯǳI think people appreciate thatǯǳthat loyalty has come back and paid off manyǰ many timesǯȄBy 2014 the firm was listed among the top 10 US craft brewers, had $60 million and 260,000 barrels in sales, was sold in 26 states and exported to 20 countries. (See Exhibit 2 for top US craft brewers and Exhibit 3 for Brooklyn Brewery sales.) Private ownership has continued to make sense for Brooklyn Brewery. Eric Ottaway noted, ȃAll the big players have approached usǳǽbutǾ it didnȂt match what we thought was right for the companyǳThereȂs so muchgrowth ahead of usǰ why would I want to sell nowǵȄ17The US Brewing Industry The global beer industry earned $514.6 billion in 2013, a slight increase of 2.9% over the previous the yearǯ The US was the globeȂs second largest beer market in terms of total beersales volume, but was 13thin per capita consumption. (See Exhibit 4 for countries ranked by sales volume and Exhibit 5 for per capita consumption rankings.) Europe was the largest beer-drinking regionǰ with řŝǯŚƖ of the worldȂs beer volumeǯ European drinkers spent ǞŗşŘǯŜbillion in 2013 to enjoy their beers.18PRODUCERS A striking characteristic of the industry was the dominance of four breweries. The leader was Belgium-based “” In”evǰ which sold ŘŖƖ of the worldȂs beerǯ S“”Miller was next with a ŗŘƖglobal share, followed by Heineken NV at 9.2%, and Carlsberg A/S at 5.7%. Industry analysts had long noted a decline in the number of macro brewer firms. (See Exhibit 6 for the decline
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