Boston Beer Company Case Study

Boston Beer Company (BBC) was founded in 1984 by Jim Koch using an old family beer recipe which he brewed in his kitchen. He named his beer Samuel Adams Boston Lager and helped start the craft brew industry. The company now employs 1,500 people, has a market capitalization of $2 billion, sales of $900 million and 4,000,000 barrels of beer, cider, hard soda, hard seltzer and hard tea in 2016. The company faces a number of challenges however. Consumption of beer in the United States is declining while competition is increasing on all fronts and the Company’s long-time CEO has announced his intention to retire in 2018. Competition is increasing from the large brewers who are also facing declining sales. They are creating

Beer consumption is declining while there are more beers available than ever before. Many of these beers are quality products from smaller brewers and the two large firms are also developing their own premium beers as well as acquiring craft brewers. In addition, beer competes with growing wine, spirits and other alcoholic beverages which are also going through an expansion of brands through craft producers instead of the traditional market leaders. In this hyper-competitive sector restaurants, bars, stores and other retailers are quick to replace weak performing brands with new ones. This doesn’t allow slow-starting products to build a following over time. Responding to these industry trends, Boston Beer is attempting to stay focused on the Samuel Adams brand by brewing many different flavors and limited edition and seasonal brews. In addition, it is developing brands in other trendy alcoholic categories like cider and hard tea that is can produce its existing plants, distribute through its established systems, and sell to its existing customers. It is also investing to reduce cost and increase