The Boston Beer Company
The Boston Beer Company
BEM106 Final Project
Brian Cleary Sarah Luxenberg Peter Seidel Bill Van de Water
May 28, 2004
Overview The Boston Beer Company has had amazing success in its transition from a small scale microbrewer to a large scale national brewery. Almost all of the company’s success is due to the Samuel Adams Lager product line, which has hardly changed from the founding of the company in 1984, to the IPO in 1995, to the present day. In fact, much of the appeal of Samuel Adams comes from its microbrew image and the founder, Jim Koch’s, commitment to the brewing process and a premium beer. In recent years, however, the company has implemented a new strategy for growth which has included introducing a light beer that will have more mainstream appeal. While this has increased profits for the company, it has also left the company vulnerable to entry by diluting its brand name. For this reason, the company’s strategy for the immediate future has to make a significant shift, from a strategy of growth to a strategy of protection. It must focus on maintaining its current profits by preventing entry both from small breweries looking to copy the BBC’s strategy and from large breweries looking to use their expansive resources to steal some of BBC’s market share.
History of Boston Beer The Boston Beer Company began as a microbrewery in Boston, Massachusetts in 1984. Its first cases of beer were only sold to Boston bars, but the company quickly branched out geographically. Fueled by awards and recognition from prestigious beer festivals, Samuel Adams Boston Lager was available on much of the East Coast by the late 1980’s and nationally by 1992. The company went public on the New York Stock Exchange in 1995. The Boston Beer Company’s strategy for growth was one of differentiation. The company created a higher quality beer than the majority of American beers by using more expensive ingredients and less water, and it used its packaging and its
BEM106 Final Project
Brian Cleary Sarah Luxenberg Peter Seidel Bill Van de Water
May 28, 2004
Overview The Boston Beer Company has had amazing success in its transition from a small scale microbrewer to a large scale national brewery. Almost all of the company’s success is due to the Samuel Adams Lager product line, which has hardly changed from the founding of the company in 1984, to the IPO in 1995, to the present day. In fact, much of the appeal of Samuel Adams comes from its microbrew image and the founder, Jim Koch’s, commitment to the brewing process and a premium beer. In recent years, however, the company has implemented a new strategy for growth which has included introducing a light beer that will have more mainstream appeal. While this has increased profits for the company, it has also left the company vulnerable to entry by diluting its brand name. For this reason, the company’s strategy for the immediate future has to make a significant shift, from a strategy of growth to a strategy of protection. It must focus on maintaining its current profits by preventing entry both from small breweries looking to copy the BBC’s strategy and from large breweries looking to use their expansive resources to steal some of BBC’s market share.
History of Boston Beer The Boston Beer Company began as a microbrewery in Boston, Massachusetts in 1984. Its first cases of beer were only sold to Boston bars, but the company quickly branched out geographically. Fueled by awards and recognition from prestigious beer festivals, Samuel Adams Boston Lager was available on much of the East Coast by the late 1980’s and nationally by 1992. The company went public on the New York Stock Exchange in 1995. The Boston Beer Company’s strategy for growth was one of differentiation. The company created a higher quality beer than the majority of American beers by using more expensive ingredients and less water, and it used its packaging and its
References: 1. “Samuel Adams – Company Background.” 2. The Boston Beer Company, Inc. 2002 Annual Report 3. “Boston Suffers Tough Fourth Quarter.” Modern Brewery Age. http://articles.findarticles.com/p/articles/mi_m3469/is_8_55/ai_114921347 4. The Boston Beer Company, Inc. 2003 Annual Report 5. Contract Brewing. Lew Bryson. Copyright 2000. http://www.beveragebusiness.com/art-arch/mmbryson0201.html 6. “A-B to modify ads attacking Boston Beer.” Copyright 1997, Chautauqua Inc. http://www.allaboutbeer.com/news/industry/ab_ads.html 7. “Brewery addition may be on tap.” Copyright 2003, Cincinnati Post. http://www.cincypost.com/2003/04/02/brew04-02-2003.html