New Belgium Case Analysis

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Introduction

The New Belgium Brewing Company is one of the top three craft beer breweries in the nation. It has experienced solid growth from its original entry as a niche marketer to a brand that is now distributed across the country. Much of New Belgium’s success is a result of a well-developed positioning strategy that promotes the company’s culture as much as its product. Not coincidentally, New Belgium’s target market chooses brands like Fat Tire because of both the company’s culture and its product. Our evaluation of the two New Belgium cases indicates that the craft beer industry remains an attractive investment for the company, particularly because of its specific capabilities and resources. The cases also suggest that a conservative growth outlook has the greatest probability of maintaining an acceptable level of profitability without sacrificing the company’s mission and core values. Finally, New Belgium’s positioning, particularly as it’s exemplified by the Fat Tire campaign, is a sustainable one for both current and future brands, though deliberate adaptations will be necessary as New Belgium expands into new markets SWOT Analysis

Strengths (New Belgium)| Weaknesses (New Belgium)|
High-quality beer, award-winning beers| Association with a single line of beer- Fat Tire| 7th Largest brewery in the nation, 3rd largest craft brewery| Increased pressure on maintaining company culture as a result of company growth| Strong growth with est. sales of over $100B and sales of over 700K barrels of beer| Continued reliance on natural gas and fossil fuels- non-renewable resources| $10M advertising budget for Fat Tire campaign| No follow-up of successful Fat-Tire ad campaign| Collaboration with Elysian Brewing Company| Increasing distribution distances| Customer Loyalty| Competition from craft brewers and craft beers from traditional brewers| Effective word-of-mouth advertising| Smaller advertising budget ($10M) than competition (Sam Adams $35M)| Strong product association (Fat Tire Brewery)| One of the founders no longer with NBB| Social media presence: Facebook (300K; $50.7M monetization), Twitter (100K), Pandora, Instagram, Beer Stream, YouTube| Customer blow back if environmental and social responsibility not as advertised| TV advertising differentiated from traditional breweries| Incompatibility between social responsibility and promotion of alcohol consumption| Clear market segmentation| Increased expense associated with sustainability efforts| Strong brand positioning| |

Distribution in 29 states and DC| |
Performance advantage of ethically and socially responsible companies| | Triple Bottom Line: economic, social, and environmental focus drives strategy| | Brand manifesto co-developed by Dr. Holt| |

Clear mission, core values, and beliefs| |
Long-standing commitment to sustainability| |
“Sustainable Purchasing Guidelines”| |
Awards for environmental achievement | |
Admission of flaws in sustainability claims| |
Dedication to socially responsible initiatives, corporate charity and philanthropy| | Event sponsorship to promote environmental responsibility| | Generous employee benefits that reflect company culture| | Awards for business ethics and work-place environment| |

Grant-supported new plant in NC| |

Opportunities (Craft Beer Industry)| Threats (Craft Beer Industry)| 16.4 percent growth in craft beer industry| 2 percent decrease in total beer consumption| Fastest growing segment of US alcoholic beverage market w/>100 percent growth from 1999-2011| Accounts for only 5.5 percent of US beer market| Differentiation from traditional breweries| Competition from traditional and other craft breweries| Low cost per viewer TV advertising | Social stigma of alcohol consumption| Growth of social media as inexpensive source of advertising| Beer can become a commodity in a poor economy, decreasing demand for craft...
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