Business Administration 2257 Chapter Notes - Chapter 1: The Beer Store, Hockley Valley, Microbrewery

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HOCKLEY VALLEY BREWING COMPANY
Role: John Miles, shareholder and operations manager at Hockley Valley Brewing Co.
Decision:
Whether or not to reconsider Hockley’s product mix
Whether or not to launch a new light beer
oHow and where to promote the new light beer if launched
Goals:
Double output and sales by the end of 2014
INDUSTRY ANALYSIS
Beer industry is dominated by Molson and Labatt – both are majority owners of The
Beer Store
Opportunities:
Craft brews are seen as higher quality than imported beer due to their freshness
Growing trend of craft beer has driven growth of microbreweries – market share has
more than doubled
Craft beer has a steady growth rate of 10% annually – guaranteed success for future
years
Light beer is best selling in Ontario and North America
Economic downturn discouraged customers from buying imported brands
Peak season for light beer sales is in the summer months therefore good time to launch
new product
Threats:
Dark beer sells in smaller volumes
COMPETITIVE ANALYSIS
Nearly 150 brands of craft beer are sold in Ontario
Primary competitors are Mill Street and Steam Whistle
Mill Street:
Located in Toronto’s distillery district
Flagship product = Original Organic Lager (80% of sales)
Produced 40 other varieties of beer
Sold in LCBO, Beer Store, and brewpubs
Moved brewing operations to Scarborough
Brewpubs located in Toronto, downtown Ottawa and Pearson Airport
Numerous awards
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