The Situation ACME Breweries1 is leader in the beer industry in Canada. It is among the ‘big brewers’ in Canada, and has a broad portfolio of products. This includes its signature beer, ACME Ocean – a light, refreshing beer and a top seller at the Beer Store. Also, it has Mackenzie Booth’s (aka Booth’s), an acquisition it made about 10 years ago. At the time, Booth’s was a relatively small regional player in the praries, and ACME developed it into a very successful brand nationally in Canada. Lately, ACME and the other big brewers are increasingly under pressure from so-‐called micro-‐ breweries. Micro-‐brew is often characterized by a greater use of hops, small batches, and more local distribution. No single micro-‐brew can compete with the likes of ACME and the other big breweries; but combined, micro-‐breweries are eating away at market share. Recent estimates suggest that micro-‐breweries combined represent over 1/3 of beer sales in Canada – and showing no signs of stopping. To battle this, of course, ACME has considered its options. One of its competitors is growing its portfolio by buying various micro-‐breweries across the country. Instead of absorbing them into the master brand, the competitor has left them as independent brands. Should ACME get on board with this strategy? It has the resources to make similar acquisitions, and it has a history of growing small brands. Should it consider starting a series of small breweries from scratch? On the other hand, ACME management is wondering what to do with its flagship brands. Although not micro-‐brew, Ocean and Booth’s are both high quality beers, made by real people who take pride in their work. Booth’s in particular has a strong regional legacy around it – having long been associated with the hard working traditions of the prairies of Canada. Maybe instead of trying to compete directly with the micro-‐brew, there is a way to position their flagship brands that would help drive growth. And in the back of their minds, ACME is wondering about that critical demographic: guys aged legal drinking age (LDA) to 30. Of course, women are beer drinkers too, but the question on ACME’s mind is whether this trend towards micro-‐brew is all a phenomenon of older beer drinkers with more disposable income (note: a 24 case of micro-‐brew typically carries 20%-‐30% price premium). Questions to Consider: What matters most to the demographic of guys LDA to 30? What do they look for in their beer brands? How relevant is the micro-‐brew phenomenon to them? What about the girls? How relevant are they in this market? How should ACME compete with the micro-‐breweries, as well as the other larger breweries who are starting to get into this space. Should it follow the course and start developing its own micro-‐brew brands? Or is there a strategy that it could deploy with its flagship brands – ACME Ocean and Mackenzie Booth’s – to combat this growing trend? Depending on which strategy they go with, what are the kinds of marketing, advertising, promotions, and communications that would help ACME maintain its relevance in this changing landscape? What is one example of something that ACME could do to connect with younger audeitnce in a meaningful, relevant, way?
1 This case is entirely fictional. Any resemblance to a real organization, situation, etc.. is coincidental.