Moosehead Secondary Research Assignment

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Transcript of Moosehead Secondary Research Assignment

Moosehead Lager Secondary Research Assignment

Introduction3Market Overview4Competitors7Demographics and Consumer Behaviour11Social Media12Conclusion13Works Cited14

IntroductionMoosehead Lager is the top-selling, flagship product of the Canadian-based Moosehead Brewing Ltd., a private company, owned by the Oland family and headquartered in New Brunswick, Canada. The company was formerly known as Maritime Brewing & Malting Co. and changed its name to Moosehead Breweries Limited in 1947. (Datamonitor, Aug 2013, Pa6) Moosehead Lager is now sold globally with its primary markets residing in the United States and Canada. (Euromonitor, 2013, Distribution). Despite the companies recent success importing and diversifying its product line, the flagship brew Moosehead Lager has fallen off of the Big 10 list at the beer store (The Beer Store, 2013, Big 10), and seems to be falling in popularity and sales.The Moosehead Breweries Ltd. you see today has transformed drastically since its inception. In 1867, whenSusannah Oland sailed from England to Nova Scotia with her family with her recipe for a rather delicious brown October ale (Moosehead, 2013, History). Moosehead still remains today completely and independently run by the Oland family in Nova Scotia.The Moosehead Breweries Ltd. will now be in its fifth generation of ownership. (Denise Deveau, Oct 2012, Pa1). Despite the numerous setbacks and boundaries for the Oland family, such as the Halifax explosion that levelled operations, to the challenges of prohibition, the family has managed to rally and stand firm to become Canadas oldest and largest independent brewer (Moosehead, 2013, History).But despite this rich, deep Canadian heritage, it is surprising to learn that it met some of its greatest success when it began selling to the United States in 1978. The following was taken from an interview with Patrick Oland, one of the Oland brothers currently running the company: Weve been a fixture in Saint John since 1919. Up to 1978, we only sold to New Brunswick, Nova Scotia and P.E.I. At that point we decided to launch Moosehead Lager in the United States. At the time, introducing a premium product went against the conventional wisdom of selling beer at a cheap price. But it paid off in sales numbers (Denise Deveau, Oct 2012, Pa1). According to company president, Andrew Oland, when he and his brother Patrick took the helm four years ago they began to explore new directions to ensure the company could hold its own in the face of increasing competition from multi-national brewers. The Brothers have now opened a new bottling plant, forged a number of exclusive international partnerships, and are rebranding to appeal to a broader market base (Denise Deveau, Oct 2012, Pa1). Moosehead has 10 brands, including domestic and export lines, which include: Moose Light, Moosehead Pale Ale, Moosehead Premium Dry, Moosehead Dry Ice, Alpine Lager, Alpine Light, Clancys Amber Ale, Cold Filtered Light and the recently added craft beer, Boundary (Moosehead, 2013, Products).With their great success down south in the states, it is time for Moosehead to focus back home on the Canadian market. They can do this if they leverage its reputation as a long time premium and craft brewer to steal some market share from the now stagnating top player in the Canadian beer market, Molson Coors, and ride the current trends towards specialty and craft brews.

Market OverviewAn estimated ten million Canadians drink beer and an estimated 21.9 million hectoliters are produced annually, making it the number one alcoholic beverage in Canada in terms of both production and consumption (Government of Canada, Sep 2013, Pa3). Thats a lot of beer! According to DataMonitor The Canadian beer market had total revenues of $11,960.1m in 2012, representing a compound annual growth rate (CAGR) of 0.6% between 2008 and 2012. Market consumption volumes decreased with a CARC of -0.2% between 2008 and 2012, to reach a total of 2,284.9 million liters in 2012. The performance of the market is forecast to decelerate, with an anticipated CAGR of 0.3% for the five-year period 2012 - 2017, which is expected to drive the market to a value of $12,134.3m by the end of 2017 (DataMonitor, August 2013, Pa1).Being a privately owned, yet trading their products globally, Moosehead faces some unique marketing challenges. Moosehead beer is sold in about 14 countries, 50 American states and all across Canada (DataMonitor, August 2013, Pa6). As previously mentioned, Moosehead Lager has had early breakthrough success in the US market throughout the 80s. But now that business conditions are more applicable for better penetrating the Canadian market the report will focus more on the Canadian side of things. However, in order to succeed Moosehead will have to overcome some of the current marketing challenges.The Canadian beer market marginally expanded between 2009 and 2012. The market is forecast to continue expanding at meager rates, with volumes contracting throughout the period. Demand for beer in Canada remained low in 2012 as the shift towards other alcoholic beverages continued, including wine and various spirits areas, many of which are undergoing significant product development and marketing activity (Euromonitor, Sep 2013, Beer in Canada Pa2).Despite the falling demand for Beer, some areas recorded good volume growth, such as imported and premium beer as well as craft beer. Craft inspired or faux craft, depending on ones perspective, offerings from the industrys behemoths have already began making waves. As an initial incubation period now comes to an end, 2013 will see big beer players invest in more complex and stratified specialty portfolios at the same time that price competition inevitably intensifies further (Malandrakis, Feb 2013, Pa1). Moosehead has already developed an answer to the craft brew trend with the introduction of their newest product: Boundary AleWere not a craft brewery, but we wanted to develop a product that had a more diverse and complicated flavour profile for that consumer, saidKatie Kennedy, director of marketing for Moosehead. We feel theres nothing else like it in the Canadian marketplace (Powell, June 2013, Pa5). This product will not rely on traditional marketing and instead be promoted by beer-tastings and word of mouth. While Moosehead may no longer be small local brewer, they have long been marketed and perceived as a faux-craft, premium beer. Using their mass distribution while being privately run opens a unique opportunity to be a mass-produced craft brew, with easy access to North American and Global markets. And, given their generally higher price points [craft beers], these products also help to maintain value growth in beer overall (Euromonitor, Sep 2013, Beer in Canada Pa3). The premium lager segment was the market's most lucrative in 2012, with total revenues of $4,557.6m, equivalent to 38.1% of the market's overall value. The standard lager segment contributed revenues of $4,219.0m in 2012, equating to 35.3% of the market's aggregate value. (DataMonitor, August 2013, Pa4)Here is a list provided by Ontario-based The Beer Stores current top 10 products (The Beer Store, 2013, The Big 10 Brands):1. Coors Light2. Molson Canadian3. Budweiser4. Blue5. Bud Light6. Carling Lager7. Busch8. Alexander Keiths9. Heineken10. Lakeport

CompetitorsThe most direct competition to Moosehead Breweries is Molson Coors and Anheuser-Busch InBev, the leading 2 beer producers in Canada. Both companies sell products internationally, and focus on a global market. Both of these companies are now run out of the United States. (Datamonitor, Aug 2013, Pa20)According to the 2012 Annual Report for Molson Coors: We are Canada's second-largest brewer by volume and North America's oldest beer company. Our approximate market share of the Canada beer market in 2012 was 39%. We brew, market, sell and distribute a wide variety of beer brands nationally. Our portfolio has leading brands in all major product and price segments. Our focus and investment is on key owned brands, including Coors Light, Molson Canadian, Carling, Molson Dry, Molson Export, Rickard's, Pilsner, Creemore Springs and Granville Island and strategic distribution partnerships, including those with Heineken, Modelo and SABMiller. In 2012, Coors Light had an approximate 14% market share and was the top selling beer brand in Canada, and Molson Canadian had an approximate 8% market share and was the third top selling beer in Canada (Molson Coors, 2012, Item 1)These are certainly numbers that cant be ignored by Moosehead Brewery Ltd. Molson Coors has long been the Canadian behemoth when it comes to beer. However, much of the success of both Molson-Coors and Anheuser-Busch is based on their choice to shift their focus to global markets, leaving ample opportunity for Moosehead Lager to swoop in and grab some of those individuals switching brands inside the Canadian market.While these competitors continue to experience successful growth, they are forced to expand into new brands and new markets, while their historically popular and powerful brands slowly lose popularity. The decline has been as swift as it has been deep. In 2000, Blue and Canadian held an estimated 10-11 and 11-12 per cent of the national market, respectively, according to a former senior beer industry marketing executive. Molson and Labatt are now part of larger international companies, and thats part of the problem, said Kincaid. In both cases Molson-Coors and AB InBev, respectively the companies seem determined to focus on a few big international sellers, rather than any Canadian brand. In the case of Molson-Coors, its Coors Light. With AB InBev, its Budweiser, Bud Light and Stella (Rubin, Dec 2010, Pa10).

Business ConditionsThere have been numerous external business factors when it has come to the Brewery. One significant change in the market that applied spe