Sleeman Breweries Limited Case Study

Great Essays
Register to read the introduction… It produced 420,000 hectoliters in 1998 which was more than the 2nd to 5th highest producing microbreweries collectively. Sleeman was the best managed company in Canada at the time and had slowly built a reputation as a quality brand. It had grown in size due to the success of several sequential mergers of smaller microbreweries.
At the time they had recently rented the rights to produce and distribute Canada wide a new portfolio of mid to low quality beers from the US company Stroh in a 15 year contract. Stroh subsequently went of business, selling these portfolios to other companies, though Sleeman maintained the right produce and distribute the portfolio.
As a result of this new contract, Sleeman took on a lot of debt. Nonetheless the company’s profit margin was still above industry standards and its sales growth had increased 16%, indicating an upward trajectory.
Problem (Issue)
…show more content…
It’s not congruent with the first operating strategy objective “grow the domestic market share with SLB’s existing brands in Ontario, Quebec and British Columbia.” This is a 15-year contract with a brewing company that lost 1.2% of its market share in just one year and then effectively dissolved itself and sold all its assets. I believe that there is a good reason as to why their market share dropped and why they decided to act so rashly.
3. Stroh Brewing Company is not a microbrewery. I understand that SBL wants to expand its strategic alliances and hopefully create a “family” of premium craft brewers across Canada, however, this is too far of a deviation and will not synergise well with what its current loyal client base is used to; a premium crafted beer from a microbrewery. This could possibly dilute its current brand.
4. The contract itself is quite pricy. If we take a quick look at the Industry Ratios, it can be seen that its acid test ratio is 0.8, which can lead to a liquidity issue. This additional contract added on more liabilities which resulted in SLB to not have enough short-term assists to cover its immediate
…show more content…
SBL already has a loyal client base and an established brand image specific to these areas as a premium product for a premium price.
Alternative 2: Take full advantage of the recent 15-year agreement with Pabst Brewing Company. The portfolio represents a mix of low-to-medium quality beers and because both Molson and Labatt have begun aggressively marketing their own specialty beers to compete with the growing premium-craft beer segment there may be an opening which would allow SBL to obtain market share from the low-to-medium market segment.
Alternative 3: Divert all of the focus on expanding distribution so that all of brands in SBLs portfolio would be circulated throughout all of Canada. There is already strong regional brand awareness of the Sleeman brand and by gaining control over provincial distribution SBL may be able to compete on a more national level.
Alternative 4: Not invest. Failing the acid test should never be taken lightly and its current ratio is also not above 2. Historically one in 2.5 microbreweries eventually failed and declared bankruptcy and seeing as how SBL already closed in 1933 it may again follow

Related Documents

  • Improved Essays

    Section Five: Competitive Advantages Spec’s Wine, Spirits, & Finer foods has several competitive advantages that work in their ultimate favor. Brand recognition is one of the greatest competitive advantages that Spec’s holds for their company. Specializing in Spirits and Wines allows Spec’s to have an inclusive target market. They target individuals who are looking for specific items and although their target market is very direct, Spec’s offers a diverse range of products that caters to those consumers who are in the market for wine, beer, liquor, cigars, or finer foods.…

    • 841 Words
    • 4 Pages
    Improved Essays
  • Improved Essays

    Threats While growing trends and potential markets for microbreweries is an opportunity, it is also a threat • Changing consumer tastes and preferences can lead to lost customers Increased competition if promoted as a mainstream lager • Competitors are in the segment of light bee such as Mill Street and Steam Whistle have strong brand names that could develop new and expensive marketing campaigns Established presence as the producer of the “Best Dark Ale” in Ontario • Hockley has been known for its dark beer for over ten years, thus it is possible that by changing its major line of beer, Hockley might lose its customers and brand identity Implications 1) Consumer demands and preferences is shifting, and it could have negative implications for Hockley if it does not adapt to the changing market 2) Hockley has been very successful with its dark beer in the past, but to further its growth, it can expand the business through new market development 3) Hockley’s strong, dependable relationship with the LCBO is both a strength and a weakness 4) Despite these points, Hockley is undoubtedly a major player in the field with an exceptional management team and loyal customers, which is beneficial to their expansion of the…

    • 752 Words
    • 4 Pages
    Improved Essays
  • Improved Essays

    • Owners spent lots of time researching industry (Competitors, consumers, retailers). • Packaged product in cans, which are superior and cheaper than alternatives. • Has best-selling dark craft beer…

    • 747 Words
    • 3 Pages
    Improved Essays
  • Great Essays

    Introduction Vincor International Inc. (Vincor) is ranked among the largest companies specializing in the production and marketing of wine in North America. It has many outlet wineries in Canada and the U.S. Since its inception, the company has grown immensely both domestically and internationally. The growth is attributed to the development and marketing of the company’s major brand of Inniskillin Ice-wine. Roger Provost is behind the international success of Inniskillin Ice-wine, which relied on the exclusive distribution channels. However, the recent takeover of the company by Constellation Brands Inc. threatens the exclusive distribution channel and originality of the Inniskillin Ice-wine brands.…

    • 1477 Words
    • 6 Pages
    Great Essays
  • Improved Essays

    The New Belgium Brewing Company has become one of the top 5 largest craft brewery in the United States, producing enormous amounts of barrels of bear per year with a distribution network that reaches more than 35 states (Rhodes, 2015). Based on research, New Belgium’s success has been driven by the alignment of its business model and operating model. Furthermore, the company’s model leverages high employee and community engagement to generate ground-breaking products that consumers take personal pride in acquiring (Rhodes, 2015).…

    • 270 Words
    • 2 Pages
    Improved Essays
  • Improved Essays

    Broken Tooth is connected to both Bear Tooth and Moose’s Tooth however, a primary market of Broken Tooth is Alaska’s brewery industry. The nature of competition amongst the brewing companies in Alaska is growing. In 1986 the brewing company in Alaska was created in the past 30 years and the chart above that shows the current and the near future brewery count in Alaska has grown to over 30 (ADN, 2016). Many brewery owners have previously worked for each other or with one another. One example is that the head brewer of Moose’s Tooth Brewing Co., now known as Broken Tooth Brewing, created his own brewing company in 2012.…

    • 414 Words
    • 2 Pages
    Improved Essays
  • Improved Essays

    Solera Brewery

    • 592 Words
    • 3 Pages

    Research Paper Solera Brewery is small brewery located in Parkdale, Oregon. They are regarded as one of the best craft-breweries in the Portland area due to their interesting process. They specialize in “one of a kind beers made in small batches.” (Solera Brewery, n.d.)…

    • 592 Words
    • 3 Pages
    Improved Essays
  • Superior Essays

    There are many things that need to be considered before New Belgium brewery decides whether or not to go through with this accreditation. They need to find out who their stakeholders are in this situation and what environment will benefit the most amount of people. The processes in which New Belgium makes decisions is a crucial part of their business model and having this certification might change that. Also they need to assess ethical theories their company operates in and if the certification’s theories aline with the same theories. Finally they need to see how the certification will affect their triple bottom line.…

    • 1630 Words
    • 7 Pages
    Superior Essays
  • Improved Essays

    That’s dangerous in a competitive industry like brewing and is what lead to Coors’ performance decline in 1985. Expanding nationally was a good decision for Coors but it should have been analyzed and handled more proficiently. It is imperative that Coors create an operational risk management team and implement internal controls so they can be effective.…

    • 931 Words
    • 4 Pages
    Improved Essays
  • Improved Essays

    Mountain Man Lager Case

    • 425 Words
    • 2 Pages

    The best solution for MMBC to deal with this problem is to introduce a new product via brand extension, the Mountain Main Light, to target young drinkers. This is because light beer sales in the U.S. had been growing over the previous six years. Additionally, the company should aggressively market the new product with better marketing strategies. First, the company needs to create a new “light” formula with the same quality as Mountain Man Lager. MMBC should meticulously reformulate the new formula based on the current brew recipe.…

    • 425 Words
    • 2 Pages
    Improved Essays
  • Improved Essays

    Pepsi And Coke

    • 808 Words
    • 4 Pages

    1. Why, historically, has the soft drink industry been so profitable? a. The soft drink industry has been so profitable because of various reasons. One is because both Pepsi and Coke have been able to take advantage of niche markets where there was a higher per capita.…

    • 808 Words
    • 4 Pages
    Improved Essays
  • Great Essays

    Case Report Title Here: Delta Synthetic Fibre's Case Report The Issue: Why are we here – What are the important Question(s)? Delta Synthetic Fibres (DSF) is currently working on developing the Britlon range. Therefore, they must determine the most efficient way to introduce their new product. At the same time, they must find ways to meet the demand for their better product. In my opinion, DSF is facing 3 main challenges.…

    • 993 Words
    • 4 Pages
    Great Essays
  • Superior Essays

    This approach is emphasized in their more recent tag line “We Brew Experiences That Inspire Legendary Lives” [The HEINEKEN Company]. However, their message, of focus on premium, becomes garbled in the next initiative identified as creating value for their customers through their dynamic upscale portfolio of international brands, and in the next breath claim, their brand is about substance not status [Heineken U.S.A., 2016]. This approach of heavily focusing on the premium aspect of their brands may separate the younger market segment, more sensitive to cost, from trying and becoming loyal consumers.…

    • 920 Words
    • 4 Pages
    Superior Essays
  • Improved Essays

    What Is Somersby Cider?

    • 2201 Words
    • 9 Pages

    Ltd has two popular beers, Golden Tiger Beer and Everest Beer, which has also been exported to Japan and United Kingdom. Porter’s Five Forces Analysis- Beer Industry Porters Five Forces Analysis is a framework that attempts to analyze the level of competition within an industry and business strategy development. It summarizes the effects of five forces to determine the competitive intensity and therefore attractiveness of an industry. Attractiveness in this context refers to the overall industry profitability. An “unattractive” industry is one in which the combination of these five forces acts to drive down overall profitability To understand the current branding strategies of Gorkha beer, we need to understand in what sort of industry the company is operating.…

    • 2201 Words
    • 9 Pages
    Improved Essays
  • Decent Essays

    In term of beer business, it appears that the market is growing especially in Vietnam and Cambodia and this presents great opportunities for F&N to expand its network and to grow its brand further. Also, F&N might have a hard time attracting young customers due to beers' bitter taste. F&N can introduce more accessible variants by adding flavours to their beer products to reduce the bitter taste and attract young consumers. 2.4 Threats Due to high number of existing firms in the Food and Beverage and Printing industry, F&N needs to monitor the market closely in order to identify the probable risk that may arise.…

    • 749 Words
    • 3 Pages
    Decent Essays