Boston Beer Case Study
Boston Beer
Background:
Jim Koch was motivated and haunted by the idea of being an entrepreneur in the beer brewing business. Once upon a time his great-great-grandfather created a recipe that was full bodied, had a longer brewing time, used rare hops, and cost a lot more than the imports are costing. Koch saved $100,000 and was able to acquire $140,000 from family and friends to start up his brewery. Knowing that it would cost close to $10 million to actually open a brewery, Koch contracted out his brewing to an existing company, The Pittsburg Brewing Company, and named the beer Samuel Adams after the revolutionary icon who was also a brewer.
The first step had been made; Koch only needed to find bars and retailers willing to carry the high priced beer. Starting small Koch went from bar to bar to sell the beer and was able to find some to carry Samuel Adams. Slowly he began to expand first to Washington DC then to New York and so on. He distributed through his own trucks, grew his flavors and his business from less than a dozen sales reps in 1989 to over 70 nationwide in 1994. Taking his beer on the road Koch won multiple gold medals in blind taste tests, outperformed the pricy imports, and created a niche market owned by the micro-breweries.
Problem:
Koch and Samuel Adams faced many problems along the way, three of which were Start up, expansion and distribution, and stock price problems. For the start up it was obvious that Koch was determined and had the entrepreneurial spirit to get the company off the ground, it just needed a serious financial backing. Once the company was able to get the backing they needed and overcome the obstacles of brewing and placement they had to figure out distributing so that they could expand their business. Finally once the distribution and expansion took hold and the company grew, Samuel Adams went public. Though the stock prices were promising in the beginning, they fell a little lack luster just after the announcement.
Background:
Jim Koch was motivated and haunted by the idea of being an entrepreneur in the beer brewing business. Once upon a time his great-great-grandfather created a recipe that was full bodied, had a longer brewing time, used rare hops, and cost a lot more than the imports are costing. Koch saved $100,000 and was able to acquire $140,000 from family and friends to start up his brewery. Knowing that it would cost close to $10 million to actually open a brewery, Koch contracted out his brewing to an existing company, The Pittsburg Brewing Company, and named the beer Samuel Adams after the revolutionary icon who was also a brewer.
The first step had been made; Koch only needed to find bars and retailers willing to carry the high priced beer. Starting small Koch went from bar to bar to sell the beer and was able to find some to carry Samuel Adams. Slowly he began to expand first to Washington DC then to New York and so on. He distributed through his own trucks, grew his flavors and his business from less than a dozen sales reps in 1989 to over 70 nationwide in 1994. Taking his beer on the road Koch won multiple gold medals in blind taste tests, outperformed the pricy imports, and created a niche market owned by the micro-breweries.
Problem:
Koch and Samuel Adams faced many problems along the way, three of which were Start up, expansion and distribution, and stock price problems. For the start up it was obvious that Koch was determined and had the entrepreneurial spirit to get the company off the ground, it just needed a serious financial backing. Once the company was able to get the backing they needed and overcome the obstacles of brewing and placement they had to figure out distributing so that they could expand their business. Finally once the distribution and expansion took hold and the company grew, Samuel Adams went public. Though the stock prices were promising in the beginning, they fell a little lack luster just after the announcement.