NEW BELGIUM BREWING CO.
TABLE OF CONTENTS
EXECUTIVE SUMMARY 3
CORPORATE INFORMATION 5
SWOT ANALYSIS 9
PORTER 5 FORCES MODEL 14
PRODUCT MARKET MATRIX 22
The New Belgium Brewing Company is one of the leading producers of craft beers, or microbrews in the United States. The company was started in 1991 by Jeff Lebesch, an electrical engineer, and his wife, Kim Jordan, who was the firm’s first marketing director. Lebesch was inspired by the beers and ales of Belgium while bicycling there. The company’s signature beer, Fat Tire Ale, was named after the mountain bike he used. The company sells its products in the Western United States, but is seeking to expand its Markey area to other parts of the US. It is presently the third largest producer of Craft Beers in the US behind Boston Beer (which makes Sam Adams) and Sierra Nevada. Revenue for last year totaled 111 million dollars.
Sales grew approximately 16% last year. The company is building a 76,000 sq. ft. addition to its current 100,000 sq. ft. plant to meet the increased demand and to satisfy new markets. Growth in the Craft Beer market is currently strong.
One of the characteristics that make New Belgium unique is its environmentally responsible operations. They are the first wind-powered brewery in the country. They also have a wastewater recycling system that extracts methane for burning in the plant’s cogeneration equipment. They also use “day-lighting” which maximizes the use of natural light to cut down on electrical use. We analyzed the firm’s current situation through different models discussed in class, which revealed interesting facts. Through SWOT Analysis, we discovered that the firm has a great deal of opportunity by expanding to new markets in other states, particularly the Northeast. They also have lower energy costs due to their environmentally efficient operating methods. We also applied the Porter Model to discover that entry to the market by others is difficult, but there is a threat of substitutes such as other beverages, etc. Buyer power appears to be weak due to brand loyalty. Supplier power is also weak to due to many suppliers, low energy cost and self-reliance that New Belgium has cultivated. Two elements of the Product – Market matrix appear to apply. New Belgium is implementing Market Development by expanding to other states and countries. They are also exhibiting Marketing Penetration through constant striving to improve their product. They are also appealing to the growing environmentally and socially responsible population.
The New Belgium Brewing Company is one of the leading producers of craft beers, or microbrews in the United States. The company was started in 1991 in Fort Collins, Colorado by Jeff Lebesch, an electrical engineer, and his wife, Kim Jordan, who was the firm’s first marketing director. Lebesch was inspired by the beers and ales of Belgium while bicycling there. The company’s signature beer, Fat Tire Ale, was named after the type of mountain bike he used. Lebesch began brewing his own beer in his basement, trying to capture the flavors, colors, and aromas of the beers he sampled while in Belgium. His success with this lead his friends to suggest that he bottle and sell his beer. In 1991, he began selling this brew out of his basement operation. Sales grew quickly by word of mouth and in 1995, New Belgium opened its first plant. Three major companies hold nearly 80 percent of the market share in the...
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