Just How Pro-Cyclical is the Beer Industry? A Case Study of the Mass Producing Beer Companies and The Boston Beer Company

Decker, Kelli

Just How Pro-Cyclical is the Beer Industry? A Case Study of the Mass Producing Beer Companies and The Boston Beer Company

Persistent URL

http://hdl.handle.net/10456/35890

Author(s)

Decker, Kelli

Date Issued

April 1, 2014

Abstract

In recent years the beer industry has finally started taking off again after the aftermath of the Great Recession between 2007 and 2009. The two brewing industry giants, Anheuser-Busch InBev and MillerCoors have been losing market share due to the increase of smaller craft breweries, like that of the Boston Beer Company. Company strategies, financial data, and annual reports of each company were carefully examined to compare and contrast sales results from 1993-2012. By focusing on a product that is difficult of imitation and does well across all phases of the business cycle, Boston Beer Company has been able to see growth. To label them as countercyclical though is just too premature of an idea because craft beer has just recently taken off. They still may be able to grow throughout the period of growth the US economy seems to be getting back to again. The beer industry overall has shown not just signs of pro-cyclicality because sales increase as GDP increases, however, they also are able to grow during recessions at times that mergers occur, as shown throughout the Great Recession. I would argue this industry is more a-cyclical due to no consistent patterns of it being one way or the other in either company. This also leads me to the belief that craft companies are at risk for being a bubble, if they are not already. This study supports Michael Porter, Christensen, Piscitello, and Kaplan and Norton’s thoughts that in order to gain competitive advantage and probably see an increase of sales, a company must focus not only on operational effectiveness, as the giants do, but also on the customer’s and supplier’s insights, as a true balanced scoreboard study would require.

First Reader(s)

Goldstein, Donald