Amsterdam Brewery Case Study

Scope

This report addresses the issue of whether Amsterdam Brewery should invest and promote new products or continue to focus on current products. And, whether Jeff Carefoote should pay attention to whole brands or spent expense to increase brewing capacity. The report describes a strategic plan to ensure Amsterdam Brewery’s competitiveness in the market.

The scope of this report is an evaluation of the profitability of each brand. The report does not intend to make recommendations of how invest and promote new products and how to increase brewing capacity.

In order to make the decision, this report measures the following qualitative and quantitative areas:

• Advantages and disadvantages to Amsterdam Brewery to spend resources on marketing

The Downtown Brown is increasing 20 per cent sale when the brand changed new name and redesigned can.

5. The Amber Ales only need sixth days to fermentation.

Disadvantages

1. The amber ales is a stronger flavor beer. The customers of entry level will not choose this beer.

2. The total sale of two brand is 22 per cent. Approximately half sale of All Natural Blonde.

Advantages and disadvantages to Amsterdam Brewery to spend resources on marketing of Amsterdam Seasonals

Advantages

1. The Spring Bock got Canadian Brewing Awards and Ontario Brewing Awards.

2. The Amsterdam Seasonals is guarantee demand in the summer.

3. The flavor of Amsterdam Seasonals has abundant. The customers can choose different brands in different seasons.

Disadvantages

1. The contribution margin of the Amsterdam Seasonals is lower than other brands, is 48.94 per cent. (Price is 4.25, Variable cost is 2.17. CM is (4.25-2.17)/4.25=48.94%)

2. The sale of Amsterdam Seasonals are only 3 per cent in total brands.

3. The bittering units of two brand are 55 and 30. The brands will lose several customers in entry level.

Advantages and disadvantages to Amsterdam Brewery to spend resources on marketing of Adventure Brews

TBS carried 447 brands from 104 breweries. The 80 per cent of the beer sales in Ontario. TBS represented approximately 11 per cent of Amsterdam’s sale. But, the Amsterdam products is only available in locations of Ontario. TBS offered slightly better margins than the LCBO.

Liquor Control Board of Ontario (LCBO)

Liquor Control Board of Ontario is sold beer, spirits and wine. In the Ontario, the LCBO has 639 locations. The 20 per cent of all beer sales is in Ontario. LCBO has approximately 27 per cent of Amsterdam’s sales.

The Retail Store

Amsterdam operated two retail stores. The first store is located at the Brewery in Leaside. The second at the Brewhouse downtown. The two retail stores are Amsterdam most profitable distribution channels. The retail store has 10 per cent of the company’s sales.

The Restaurants and Bars

The restaurants and bars are sale the bottled beers and kegs of beer to serve on draught. The restaurants and bars is across the GTA. The restaurants distribution help to promote the brand to new customers and provide an opportunity to taste the beers. Also, the restaurants provide signage of the beers on draught, featured in-house promotions of their beers or suggested menu pairings. The sale of Amsterdam is 44 per cent in restaurants and