moonshot caffeinated beer-final
DESCRIPTION
Moonshot beer, rhonda kallmanTRANSCRIPT
New Century Brewing:Moonshot Caffeinated Beer
No Capital, No Advertising …
ITU EXECUTIVE MBA 2009-2010 1
Sinem Güler, Özgür Gemici, Egemen Yıldırım, Orkun Eti
Agenda
Summary Brief History of Rhonda Kallman &U.S Beer
Industry & New Century Brewing Distribution & Demographics Energy Drinks Moonshot Caffeinated Beer Swot Analysis Corporate-level strategy Recommendations
New Century Brewing:Moonshot Caffeinated Beer 2
Summary
Rhonda Kallman, CEO of New Century Brewing, comes up with the idea for Moonshot which is a caffeinated light-beer and after the other brewers enter the market with their own caffeinated beers and a disappointing first year she decided to relaunch Moonshot with a new label and more caffeine by investing almost all the company’s resources for supporting Moonshot.
New Century Brewing: Moonshot Caffeinated Beer 3
History of Rhonda Kallman
At the age of 19 Rhonda became administrative assistant to Jim Koch, at Boston Consulting Group (BCG).
She was also working part time as a bartender and waitress.
In 1984 Jim Koch left BCG to start Boston Beer Company, one of the first craft brewers in USA. He asked Kallman to join him as she had the knowledge of local pubs and restaurants and this would help the company to access potential customers.
New Century Brewing: Moonshot Caffeinated Beer 4
History of Rhonda Kallman
The company’s strategy was employing traditional German brewing techniques and use only traditional ingredients and they avoided using any preservatives to maintain freshness.
Instead of owning their own facilities they contracted production to 3rd party brewers. This helped avoid the substantial upfront fixed costs of constructing a brewery and gave greater volume flexibility.
New Century Brewing: Moonshot Caffeinated Beer 5
History of Rhonda Kallman
Kallman; as a vice-president of sales, focused on direct sales to bars and restaurants because of the difficulties of having the distributors convinced to carry a small label with limited advertising support.
In 1985 Samuel Adams was voted the best beer in America so the distributors are convinced and Boston beer grew between 30 % to 60% each year.
New Century Brewing: Moonshot Caffeinated Beer 6
History of Rhonda Kallman In 1995 Kallman became executive vice-president
of Boston Beer . By this time, with the entrance of more than 600
craft brewers to the market, Boston beer began producing alternative beverages to maintain growth and to stay in the maturity period.
And after being a public company in 1995, Kallman felt that she had begun to lose touch with customers. She had stopped working directly with distributors, bars and restaurants and instead spent most of her time in meeting rooms. As the company started growing up she ended up losing her sense of family.
New Century Brewing: Moonshot Caffeinated Beer 7
History of Rhonda Kallman
New Century Brewing: Moonshot Caffeinated Beer 8
New Century Brewing
In 2000 Kallman starts New Century brewing with Dr. Joseph Owades (A brew master & Consultant)
Idea: Reinventing light beer. (Edison)
In 2001 Edison was released.
Launch day of the product (9/11) and launch of other competitors’ light beer brands made the situation difficult.
New Century Brewing: Moonshot Caffeinated Beer 9
New Century Brewing
New Century Brewing: Moonshot Caffeinated Beer 10
Moonshot Caffeinated Beer
Kallman came up with the idea of putting caffeine into light beer after drinking a light beer and an energy drink shortly after in a concert.
More calories than a light beer and 45 mgs of caffeine.
Target market: young people at the age of 23 who have just gotten out of college.
First Moonshot had the brand featuring a retro style reminiscent of 40’s and 50’s and was launched with a budget of less than $100.000.
In 2005 The second one with a new image and 69 mg of caffeine. Promotion focused on providing samples to consumers in night clubs and bars.
New Century Brewing: Moonshot Caffeinated Beer 11
Moonshot Caffeinated Beer
New Century Brewing: Moonshot Caffeinated Beer 12
Moonshot Caffeinated Beer
Although gaining new distributors there is a need to increase awareness of the product and overcome consumer resistance to the idea of caffeinated beer. The problem is how will the process be accelerated with no capital and no advertising?
New Century Brewing: Moonshot Caffeinated Beer 13
US Beer Industry
US is the largest beer market in the world.
Anheuser-Busch total production is equal with Germany’s entire national production.
Growth of light beer (In 1973, SABMiller introduced Miller Lite)
New Century Brewing: Moonshot Caffeinated Beer 14
US Beer Industry
Big three; Anheuser-Busch , SABMiller and Molson Coors accounted for more than 80% of total consumption.
New Century Brewing: Moonshot Caffeinated Beer 15
Craft Beer Industry
Small local brewers offering unique European style beer.
Opportunity to enter the market without making costly investments in plant and equipment by leasing excess capacity to craft brewers.
Increase in the number of breweries and total production accounted for more than 3 per cent of total beer consumption.
In 1980’s craft segment was new, few competitors. Now there is an increase with the help of advertising support, creative packaging and product innovation.
New Century Brewing: Moonshot Caffeinated Beer 16
Distribution&Demographics Three-tiered distribution system (Brewers,
distributors and retailers) Transportation Process: Brewers > distributor warehouses (temporarily
storing) > individual retailers. Law prohibits brewers from taking a direct
interest in distributors or retailers and from selling directly to customers.
In US, Alcohol drinking prohibited to people less than 21 years.
People under the age of 35 consume 54 per cent in bars and restaurants
Males account for more than 80 per cent of consumption.New Century Brewing: Moonshot Caffeinated Beer 17
Energy drinks
One of the fastest growing beverage categories. High in calories amino acids and caffeine. High price.
Avg. Selling price is five times more than Coca-Cola.
In 2004 Energy drink revenues grew by more than 70 per cent where soft drinks grew by only 1 per cent.
First energy drink – Red Bull- containing 80 mg of caffeine.
Energy drinks: Increasing physical and mental stress and improves endurance, concentration and reaction speed.
By 2004, more than 200 energy drinks were available in the US market.
New Century Brewing: Moonshot Caffeinated Beer 18
SWOT Analysis
New Century Brewing:Moonshot Caffeinated Beer 19
Positive Negative
Inte
rnal
Exte
rnal
Strengths-First-to-market advantage (First caffeinated beer in the market.)-Rhonda’s marketing expertise and reputation in the market.-The price of the product-Outsourced production to 3rd party breweries (No planting and equipment cost)-No additives (sugars and/or artificial ingredients) in Moonshot in contrast with energy drinks.
Weaknesses-Lack of budget (100.000$ with no advertising in it)-No marketing plan&research (Is there a need in the market for a caffeinated beer)-Distribution to several states only-Wrong advertising strategies.
Opportunities-New distributors in Wisconsin and Colorado.-The rise of energy drinks-Development in craft beer industry.-Consumption percentage of light beer (one out of two drinkers)-Adventurous drinkers open to new products-Technological breakthroughs (Advertising support, creative packaging and product innovation.)
Threats-MADD campaign against caffeinated beer.-Bad publicity cause by B-to the-E.-The other competitors in the market who launched their own products.-9/11 terrorist attack made things difficult in terms of getting the capital.
Comparison of selected Beverages April 2005 (Cdn $1 = US $0.80)
Brand Calories Caffeine(mg) Alcohol(%) Price (6 pack)
Edison 109 0 4.0 $6.49
Budweiser 140 0 5.0 $4.99
Bud Light 110 0 4.2 $4.99
Michelob Ultra 96 0 4.1 $5.50
Corona Extra 148 0 4.6 $7.99
Sam Adams (Lager)
160 0 4.8 $7.50
Moonshot 128 45 4.8 $6.49
B E 203 54 6.6 $7.99
Molson Kick 167 55 5.0 $10.95 Cdn
Labatt’s Shok 157 60 6.9 $7.95 Cdn
Red Bull (250 ml)
110 80 0 $11.95
New Century Brewing: Moonshot Caffeinated Beer 20
*Moonshot’s caffeine content was increased to 69 milligrams in June 2005.
Marketing Mix - 4P’s
Product: Good * Brand name: Good brand name choice. reminds an energetic beer. * Functionality: Beer with caffeine. it may be preferred by people
who doesn’t like sweet taste of energy drinks. * Packaging: Current package can be considered as attractive by
young people. The brand name and the new design fits well. * Appearance: Just like normal beer Place (Distribution): Not enough * Distribution channels: New distributors in Colorado and Wisconsin. Promotion: Not enough *Promotional strategy: Samples to consumers in night clubs *Advertising: No capital for advertising. Price: Good
Higher than premium domestics, lower than imports. Priced in the middle.
New Century Brewing: Moonshot Caffeinated Beer 21
Corporate-level strategy
Mission : Making new American style beers
Goals: Reinventing light beer Producing innovative products Providing smooth tasting, low-caloried, natural
beverages
New Century Brewing: Moonshot Caffeinated Beer 22
Mistakes
The major problem was the lack of advertising and wrong strategy to rely on other companies ads such as they did with B to the E.
Conflict between target market and the place where promotion activities took place.(23 years of old, just got of the college and working people and high-energy clubs)
Lack of a market plan, strategy and most importantly a market research.
Choosing product concept which refers to the ideology that a product would be the most successful in the market if the main focus is put on the product quality and specifications itself.
23New Century Brewing: Moonshot Caffeinated Beer
Recommendations
Attracting Angel Investors: Providing the capital to accelerate the business.
Internet Marketing: Company can reach a wide audience for free or a small fraction advertising budget.
Publishing articles on the internet; company can build a brand awareness by telling about the product through blogs, social networks or websites about brewing or dining (all natural, good taste, hand crafted etc.). As a result this would cause word-of-mouth marketing.
In-store displays: Placement of a product in visible locations in a store, such as at eye level, at the ends of aisles and near checkout counters, eye-catching displays promoting a specific product.
Importance of Distribution Channels: More attention should be paid on gaining more distributors in more states so the product could be nation wide. To do this; motivating distributors by offering better margins. This would allow us know about the key functions.Which are; gathering market research, developing communications, finding prospective buyers, transporting and storing.
24New Century Brewing: Moonshot Caffeinated Beer
Recommendations
Promotion: ▪ Get benefit from Edison’s sale. (1 moonshot with 6
pack of Edison) ▪ Mount campaign adapted for male customers (as they
are the 80% of the consumers)▪ Emphasize the good taste of Moonshot as a caffeinated
beer.▪ Emphasize lack of preservatives materials in the
product.
25New Century Brewing: Moonshot Caffeinated Beer