Jamba Juice Case Study

Zachary Muehl

2/12/14

Boston Beer Company

Situational Analysis

The Boston Beer Company, the largest craft brewery in the United States, holds only a 1 percent stake in the beer market. The company is known for its Samuel Adams brand. It had revenue of over $500 million in 2011, and sold over 2 million barrels of beer. Its largest competitors include Anheuser-Busch and MillerCoors, which together account for more than 80% of the beer market in the United States. In 1995, Boston Beer Company went public. CEO Jim Koch, however, kept 100% of the Class B Common stock, giving him the power to make all major decisions for the company. The company now has over 50 beer flavors and has won more awards in international beer tasting competitions than any other brewery.

While the company has had a lot of success in its recent history, it faces many threats as well. As a craft brewery, it must continue to brew no more than 6 million barrels a year, at which point it would no longer be classified as a craft beer company. This threatens the company because its customers expect its identity to remain a craft brewery, rather than a large traditional brewery. If the company wants to continue to grow and thrive, it will have to make a decision to remain a craft brewery and limit its production and revenue growth, or continue unhindered into the future as a traditional brewery.

The beer industry has adopted what is known as the Three-Tier System, which divides the beer industry into suppliers, distributors, and retailers. This is to ensure a level of competition, by not allowing breweries to own retailers or distributors. This causes problems for smaller breweries, however, as distributors are more concerned with distributing the beer that is produced by Anheuser-Busch and MillerCoors, as they produce the most volume. Distributors have been contracted by these companies to not distribute beers of other breweries. The distributors are also major decision makers in which beer...