New Belgium Brewing

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What follows New Belgium’s Folly?
Emmanuel Danmozie
Lyn Scott
John Towne

Texas Woman’s University
BUS 5133.51

April 23, 2011
Dr. Raman

Executive Summary
New Belgium Brewing’s original marketing strategy focused on relational marketing using a “barstool to barstool” method of marketing and creating “brand stewards” in a grassroots effort to spread the word about New Belgium’s craft beers. As the company’s brand and leadership strategy matured, the marketing became proactive and focused by creating bicycle events, interesting take-away merchandise and a touring taste-testing vehicle. By forming personal relationships with their customer base, NBB organically gained market share. To remain competitive in the craft brew market and maintain its market share, NBB must explore creative and innovative marketing strategies to outperform its rivals.

Background and Case Summary
A bicycle tour in Europe combined with an unquenchable passion for Belgian-style home brewing, lead Jeff Lebesch to found the nation’s third largest craft brewery, New Belgium Brewing (NBB). In 1991, the start-up company began commercial operations in the basement of Jeff and his former wife, Kim Jordan’s Ft. Collins, Colorado home. Within four years, the operation outgrew the tiny basement and moved to its current location at 500 Linden Street in Ft. Collins. In the early years, Jeff served as the original brew master and Kim ably assumed the roles of marketing manager and distribution specialist. As the seventh largest U.S. brewer and Colorado’s second largest brewery behind behemoth Molson Coors Brewing Company (Largest Breweries and Brewpubs, 2010), the company’s thirty beers are currently available in 26 states. The recession has negatively impacted the alcoholic beverage market causing the overall beer market’s total dollar sales to decrease by 2.7% during the first half of 2010 (Steverman, 2010). Interestingly, the craft brew market, which makes up 7% of the total beer market, has experienced an increase of 12% during the same period (Schwartz, 2010). This marks the seventh consecutive year that craft brew sales have outpaced the overall beer market in sales (Schwartz, 2010). Another form of industry-specific comparison is volume sold per period, which provides an excellent barometer of a brewery’s success. Craft brewers saw a growth rate of 9% in the first six months of 2010, compared to a 5% growth rate during the same period in 2009 (Craft brewers boast bigger sales, 2010). Craft brewers sold 4.6 million barrels during the first half of 2010, an increase of 400,000 barrels over the number sold during the same period in the prior year (Craft brewers boast bigger sales, 2010). NBB’s growth rate is nothing short of explosive with a first year’s production level of 225 barrels (bbl) sold and a 2010 projected figure of 630,000 bbl (Higgins, 2010). Problem / Decision Statement

New Belgium originally employed a relational marketing strategy, using a “barstool to barstool” method of marketing and creating “brand stewards” or Rangers to spread the word about New Belgium’s beers (Ferrell & Hartline, 2011, p. 482). A few years later, the company began engaging consumers with a more “focused and proactive marketing approach” creating merchandise and events like the Tour de Fat, “what’s your folly, postcoasters, and the beerstream trailer” (Ferrell & Hartline, 2011, p. 483). In 2003, the company produced “Tinkerer” television commercials evoking “faraway outposts” which added a transactional marketing aspect to the company (Ferrell & Hartline, 2011, p. 486). The television commercials provided the vehicle to reach a more dispersed audience, in contrast to the grassroots regional market method provided by the brand stewards. Starting in 2007, the company’s marketing strategy included social media outlets like Facebook and Twitter, and a complementary website (Ferrell & Hartline, 2011,...
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