Samuel Adams Beer Company

1
Samuel Adams Beer Company

• Chris Clark
• Michele Hulbert

2
Background of Samuel Adams

• Samuel Adams Beer Company was started by Jim
  Koch. He was the son of a fifth generation beer
  brewer.
• This company is headquartered in Boston,
  Massachusetts.
• They manufacture 17 unique, award-winning beer
  brews.

3
Financial Highlights

• 2006 Revenues- 2005 Revenues- 2004 Revenue-
• 315,250 263,255 239,680
• Increase - 19.7 Increase- 9.8
• 
  
  
• 2006 Net Income- 2005 Net Income- 2004 Net
  Income-
• 18,192 15,559 12,502
• Increase- 16.9 Increase- 24.4
• 2006 Barrels Sold- 2005 Barrels Sold- 2004
  Barrels Sold-
• 1612 1364 1267
• Increase -18.2 Increase-7.6
• 100 of Net Revenue 100 of Net Revenue 100 of
  Net Revenue

4
Competitor Comparison

• Samuel Adams Anheuser-Busch
• ROA 11.8 ROA 12
• Net Profit Margin 5.8 Net Profit Margin
  10
• Current Ratio 295 Current Ratio 81.5
• Current Assets-120,562/Current Liab.-40,870 Curre
  nt Assets-1829.5/Current Liab.-2246.1
• Debt-to-Assets 29.7 Debt-to-Assets 75.3
• Total Assets Turnover - 204.1 Total Assets
  Turnover 109.7

5
1st Recommendation

• Problem 21-27 year olds consider Samuel Adams
  to be their Fathers Beer.
• Purchasing new creations such as Fat Tire and
  Magic Hat or imported beer
• Resolution Creating a new label for the younger
  age demographic (21-27)

6
2nd Recommendation

• Problem Samuel Adams is considered a smaller
  company and does not have the same leverage as
  their larger competitors.
• Resolution Samuel Adams would be an excellent
  acquisition for a larger company.
• Craft brewing is a growing section of the
  industry.
• Experienced and innovative brewers who would
  provide value to another company

7
Friendly Acquisition

• Who Should Acquire Samuel Adams?
• -Miller Brewing Company
• -Miller is owned by SAB Miller which has
  breweries or brewing interests in over 60
  Countries Across six Continents and is one of the
  worlds leading brewers
• -Relationship already existent from non-owned
  breweries
• -More Market Share
• -Better to do this before another company like
  Anheuser-Busch or a larger import beer company

8
Downsides

• -SAB Miller produces many import beers that are
  already in Better Beer Category (Pilsner Urquell,
  Peroni Nastro)- They would almost be competing
  with themselves
• -Samuel Adams is liked by many for having a small
  company feel
• -Great current management that is growing the
  brand

9
Porters 5 Analysis

• Threat of New Entrants
• Very easy for market entry
• Competition from smaller up and coming businesses
• Hard for new entrants to differentiate their
  product
• Bargaining Power of Suppliers
• Very dependent on suppliers
• High switching costs when moving to a new
  supplier
• Ensuring quality standards are met

10
Porters 5 Analysis (Cont.)

• Bargaining Power of Buyers
• Large store buyers are the businesses with the
  bargaining power.
• Buyers do not understand the quality of the
  beverage.
• Threat of Substitute Products
• Substitute products could entail wine and hard
  liquor
• Soft drinks or water could also be a substitute
• Intensity of Rivalry Among Competitors
• Largest indirect competitor is Anheuser-Busch
• Small micro-breweries to large international
  companies can be competitors.

11
P.E.S.T.E.L. Analysis

• Political/Legal
• Economic/Environment
• Social
• Technology

12
Value Chain Analysis

• Primary Activities
• Inbound Logistics- Beer is brewed in either the
  companys owned or non-owned Breweries, with
  certain Breweries set up for certain functions
• Outbound Logistics- No internal distribution/Use
  third party to distribute product
• Marketing/Sales-Lot of focus on quality
  marketing as well trained sales force to sell
  product

13
Value Chain Analysis

• Support Activities
• Procurement-Choose high quality ingredients to
  ensure higher quality end result. Heavy
  reliance on this process.
• Technological-Their brewery based out of Boston
  is set up specifically for creating new
  products
• -2.3 million put into Cincinnati Brewery to
  help improve efficiency and try to produce
  40-50 of total volume at this brewery
• Infrastructure-Very strong management with a
  good understanding for competition and staying
  on top of industry

14
Resources

• Tangible
• Financial Physical
• Organizational Technological
• Intangible
• Human Resources Reputational Resources
• Innovation Resources

15
Core Competencies

• Innovation
• Sales
• Marketing

16
S.W.O.T Analysis
17
Current Strategies

• Extreme Beer
• Beer is competitive with sherry, cognac, and
  port.
• Samuel Adams Chef David Burke join forces.

18
Timeline

• 1970Jim Koch created his first brew and started
  selling it door to door.
• 1984Koch decided to start making a better
  beer. Only competition was from imported beer.
• 1985Samuel Adams Boston Lager made its official
  debut.
• 1988Increased market share and sales were at
  36,000 barrels a year. Built first brewery in
  Boston.
• 1995Continued to introduce new flavors without
  losing the quality of the beer.
• TodayThey have 17 different beer flavors and
  sold across the country as well as in 20
  countries.