Since the business began in 1991, the company annually ships 200,000 barrels of beer to bars, restaurants and retail outlets throughout their 13 state distribution area. One
dollar of every barrel goes towards programs to enhance culture, society, the environment and drug-and-alcohol awareness. New Belgium Brewery’s flagship, Fat Tire, is the largest selling beer in the state of Colorado.
Environmentally, this company is not threatening. In fact, N.B.B. brags about their friendly environmental practices. For instance, New Belgium reduces its impact on the environment by using wind-power to brew beer instead of using coal. This improvement annually reduced the company’s CO2 emissions by 1,800 metric tons. The company also uses steam-condensing technology that recycles the hot water for the next brewing cycle. They conserve electricity by using “sun tubes” during the day which add a warmer feel to the working environment. New Belgium has received numerous awards and recognition for their unique style of environmental conservation.
Although Fat Tire is number one in Colorado, it has some pretty stiff competition. Fortunately for N.B.B., Each beer has a very unique flavor and design. Their primary competition consists of other microbreweries such as Sierra Nevada, Pyramid Pale Ale and Flying Dog Ales. The “big three”: Anheuser Bush, Miller Brewing, and Adolph Coors represent 80% of beer sales in the United States. The other 20% of the market share is divided among the ever-growing micro-brewing companies. Between 1990 and 1995, smaller brewers increased their market share from an estimated 7.1 percent to 8 percent. The sales by smaller brewers increased 9 percent during this period. The
company doesn't release financials, but it posted $45 million in sales last year and says it
operates solidly in the black. Its 255,000 barrels of beer are a sliver of the total industry
(205 million barrels), but it's the fastest-growing craft brewer in the U.S. over the past five years.
New Belgium Brewery only offers a handful of beer options. The current products are: Fat Tire, Sunshine, Blue Paddle, 1554, Abbey, Trippel and the seasonal brew, Loft. Fortunately, when most beer drinkers find a beer they like, they remain loyal to the brand as long as it is available in their area. N.B.B. has received criticism for being a company that manufactures and distributes alcoholic beverages. You can usually find a six-pack of Fat Tire Ale in a convenience store for about $8.00. Bottling is only one aspect of their industry. Bars and restaurants purchase kegs so they can offer New Belgium beer on tap, which is really how beer should be enjoyed because it retains freshness and carbonation better than bottles.
New Belgium’s target market has been determined rather unconventionally. They do not classify their market segments into demographics, but instead segments the market by through lifestyle, attitude and values. Their market research shows that their customers have similarities in the areas of lifestyle, attitude and style. Fat Tire customers are usually concerned about the environment, socially responsible, enjoy deliciously original beer and feel good about bicycles (for transportation or nostalgia purposes). This coincides with the company’s strategy to conserve energy and build rapport within the organization. According to Fortune.com, “the 175-person company has fully automated
all of its manufacturing to reduce water usage and recycles more than 85% of its cleaning fluids. (Cleaning is a major source of water consumption in most breweries.) In addition,
the company spent $4 million to build a wastewater-treatment facility”. The wastewater-
treatment facility, once paid off, will save the company $10,000 every month.
The company should spend a little more time and money into making a snappier website. The current site looks pretty average and does not stand apart from other average websites. The content is good, but the design and layout could be improved. Even though word of mouth is the number one marketing strategy, the website could be developed in a way that welcomes visitors but also has a special section for die-hard New Belgium fans.
Aside from their mundane Internet presence, the company might benefit from increasing its distribution area. N.B.B. is not available in most states throughout the U.S. Although, they may not be able to penetrate all areas of the country, they could choose some “Fat Tire” type communities that would appreciate the taste and meaning behind the brand. For instance, Bloomington, Indiana, home of Indiana University basketball, would be a great place to offer Fat Tire Ale. The community is very earth-conscious and many of them enjoy specialized micro-brews that are not available in the Midwest. New Belgium should offer their beer to anyone that wants to sell it, regardless of their location in the United States. If it costs more to ship, the local buyer will just have to charge more from their patrons.
On the other hand, New Belgium remains an enigma to many beer drinkers. It is a legend to many people in the Midwest, North, East and South who wish they could enjoy a Fat Tire while typing case studies for a business class or spending quality time with
friends at the local pub. Perhaps the fact that it is so hard to find is a reason people keep coming back for more. If they want to increase sales and profit margins, New Belgium
could benefit from branching out. They will not sell bottles or kegs to any retailer,
restaurant or bar outside of their 13 state radius.
Overall, the company has been very successful. They have not always taken the cheap and easy route when conducting business, but their strategies have been planned and implemented well. The company is very involved in the community, offering such events as Tour de Fat and the current campaign “What’s Your Trip”. “What’s Your Trip” is designed to offer loyal, enthusiastic customers a way to personalize and document a great experience they have had with New Belgium beer. N.B.B. also donates and contributes to many organizations in their local area. It is even possible to apply for a grant online.
The employees love their jobs and receive an above-average benefits package including massages, pet days and free bicycles after one year of employment. The customers keep coming back for more and telling their friends about it. Word of mouth seems to be working quite well for New Belgium. They also offer a tour of the brewery in Fort Collins, Colorado, complete with free and generous beer samples. Finding problems with a company that is doing so well is difficult because their numbers are impressive, the employees love their jobs and the customers are devoted to the brand. Increasing the distribution radius would involve some additions to their current operations. New Belgium would need to hire more workers and expand production capabilities if they
were to move into new markets. If New Belgium chooses not to expand into new states, it could, at some point, lose the status that it gained as a down-home microbrewery.
