FORKED RIVER BREWING C.: CRAFT BEER ENTREPRENEURSHIP IN AN EVOLVING INDUSTRY Case Solution
Forked River Brewing Company was founded by three partners having hobby of brewing beer, and they turned it into a business. They founded the company, as a small producer of beer in the London area, Ontario in Canada. With the idea towards craft beer industry, they started operations.
The company became successful in the craft beer industry, but due to increasing competition in the market, and changing consumers’ preferences, the company has to frame its strategy to meet future complications that could meet the market demands. Similarly, the company should also take stake in the Beer store as announced by the beer store.
On the other hand, it was identified that the company has to ensure consistent quality of the beer, and reasonable price with attractive packaging in bottles, and cans due to possibly decreasing demand of draft beer. Similarly, in order to compete in the market, it needed to place product in the market with the help of Beer store, and LCBO stores, which would help the company to diffuse in the market due to its quality products at less price.
How can three partners frame their business in strategic plan to uplift their direction towards changing business environment, and competition in the Ontario based craft beer industry, and how could it benefit from its rising demand?
The three partners’ hobby in brewing beer turned into a business, which turned into a self-financed company. Forked River has been operating well until, it faced competition, and complications regarding the strategic plan.
Furthermore, the rising number of the craft breweries in the province was also growing in the industry, as they were providing beer with a wide range of the choices that were unimaginable previously. On the other hand, the increasing number of foreign products, and unusual flavors, with no standard quality were being offered in the industry.
The three partners were supposed to change their strategic plan to overcome changing business environment, and competition in the Ontario, The Beer Store, which was a joint venture between the Molson Coors Canada, Sleeman Breweries, and Labatt, had its ownership transferred to the three foreign brewers: Molson-Coor Brewing, AB-InBev, and Sapporo Breweries of Japan.
Furthermore, the Beer Store, a distribution, and retail company owning stores at different locations in Ontario, only sold beer produced by the owners. On the other hand, it made it difficult for other producers to sell their products in the store. It also had monopoly in selling beer in the packages of more than six bottles or cans.
However, the beer store also had announced to offer the ownership stakes to all Ontario-based breweries. The Beer store took this step to minimize the criticism of the monopoly over the company. On the other hand, directly selling beer through owned stores increased cost, and it also required time to negotiate with the regulatory authorities.
On the other hand, the competition in the industry was increasing, due to which the competition could not have been handled well. Therefore, the problem was to measure the company’s capabilities and approach the market with competitive advantage over the rivals in the market.
- Microbrewery and Brew Pubs
Microbrewery is a place where beer is made as per the required quantity, however, the brew pub is a place where the beer can be sold to the retail customers directly, otherwise the company would not have direct access to the customers.
Through the brew pubs, the company has to set the pubs at different iconic locations, as it will not only increase the popularity of the company, but it will also enable the company to make image of the brand in the market.
- Contract Breweries (Graft Beer)
The contract breweries are beer producers, but they are given recipes from the contractors to produce the beer with different flavors, and quality as well. Similarly, this type of the stance would enable the company to focus on its production capacity, quality, and on expansion to increase the sales only, however, the company would not need to focus on the market that what’s going on there. Moreover, the company would be more profitable as compared to selling same products in bottle or cans, but due to consumers switching toward bottles and cans, it could affect the expectations for profit.
- Sell through Grocery stores
The regulatory authorities have given licenses to the limited number of grocery stores to sell beer on some rules and regulations. However, the regulatory authority also subjected to grocery stores to follow the rules on opening hours and minimum prices. With this step, the company would be able to reach the retail consumers to offer the product range from single to six-packs as well..............................
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