Introduction to Craft Brew Alliance & Boston Beer Company Industry Background

Introduction to Craft Brew Alliance & Boston Beer Company

Industry Background

The beer brewing industry is consist of two main strategic groups. The first group takes up very large part of total market share. Most notably, the desire to achieve economies of scale in distribution and manufacturing has led to a large amount of consolidation amongst the largest brewers in the industry. In 2008 Anheuser-Busch merged with InBev to form AB InBev. Next, Coors Brewing Company merged with SABMiller to form MillerCoors. Together, these two companies hold almost 70+% of US beer market share.

The major brewers’ primary products consist of premium and sub-premium beer. The second strategic group is classified as “better beer” brewers and includes a variety of companies with small market share percentages. The beer in this group is considered premium or super-premium by the market, has a higher retail price, and tends to have unique characteristics. Furthermore, this sort of beer could be separated into two types, which are known as import beer and craft beer. Craft brewers and import brewers have a similar target market and sell significantly less volume than the major brewers. What we intend to analyzed are typical examples of craft brewers, the Boston Beer Company and Craft Brewers Alliance.

According to recently research results, small and independent American craft brewers have successfully reached 11% volume share of the whole marketplace. Based on statistics, small craft brewers produced 22.2 million barrels and saw an 18 percent rise in volume and a 22 percent increase in retail dollar value in 2014.

During the five years to 2015, the Breweries industry has benefited from consumers opting for a growing variety of craft-style beers made from local microbreweries. On the other sides, as the market for specialty beers becomes saturated with microbreweries throughout the country, industry revenue is projected to gradually plateau.

It shows that the...