Company C is a small brewery and distribution facility located in Central Ontario. They are considered a small brewery based on their sales and production volume. Company C’s major product categories include a mainstream lager, premium beer and a discount brand. Their major competitors include large mainstream beer manufactures as well as premium breweries.
Company C is facing fast deckling sales and is projected to have negative growth in 3 years and a projected loss in 5 years time. Their mainstream beer appears to be their top seller however, production has slowed down given the introduction of similar products by its competitors. Furthermore their premium brand and discount brand are suffering declining sales year over year while their mainstream has remained stagnant over the past five years. Company C needs to understand what it can do to remain competitive and profitable while remaining under the radar of the larger breweries.
OUR APPROACH AND RESULTS
The company needed strong direction with their product assortment. Currently their three brands under one umbrella, that is customers would associate their premium brand with their discount brand, their premium brand was priced too low that caused a negative misconception and when we surveyed their core market, the mainstream drinkers, they wanted a beer that was cheap and associated little brand loyalty. Majority of the sales were coming from draught which provided some stabilized earnings but their other channel via retail outlets proved to be on somewhat of a decline.
Our strategy was to separate the three products into three separate brands rather than one and associate this with one parent brand. We re-priced the premium segment, phased out the discount segment given the leading indicators that the discount segment as a whole was declining in the market and rebranded their mainstream beer. We coupled that with focused marketing and cross promotion which led to the following results:
- Increased purchase of mainstream beer by bars, restaurants and pubs
- Additional shelf space for premium brand
- More efficient facility due to less change over’s
- Projected positive earnings in the next five years
- Initial trial run of three months indicated a 12% increase in sales
We are happy to report that we are in contact with our client on a regular basis and their growth is in line with our projections for the company.