Case 4 New Belgium Brewing (A): Gaining Competitive Advantage Through

Socially Responsible Marketing*

Synopsis: From its roots in a Fort Collins, Colorado, basement, New Belgium Brewing has

always aimed for business goals loftier than profitability. The companys tremendous growth to become the nations third-largest craft brewery and ninth-largest overall has been guided by a steadfast branding strategy based on customer intimacy, social responsibility, and whimsy. The companys products, especially Fat Tire Amber Ale, have always appealed to beer connoisseurs who appreciate New Belgiums focus on sustainability as much as the companys world-class brews. Despite its growth and success, New Belgium has managed to stay true to its core values and brand authenticitythe keys to its marketing advantage in the highly competitive craft brewing industry

Themes: Customer intimacy, competitive advantage, social responsibility, sustainability,

branding strategy, product strategy, distribution strategy, marketing

implementation, customer relationships

Case Summary

Small companies sometimes make big contributions to surrounding communities and become leaders as they set social agendas and enact initiatives to address community issues. Such is the case for the New Belgium Brewing Company (NBB), which has gone to great lengths to incorporate environmentally sensitive and energy-saving alternatives into its brewery operations. Beyond its commitment to the environment, New Belgium has become a model for social responsibility as a result of its philanthropic efforts in many states.

The company focuses on producing world-class craft beers and having fun, but strives to maintain its reputation of being an environmental steward. NBB competes against domestic and microbrews in both bars and liquor stores, but feels it has a loyal following due to its personal relationships with customers. The beer makers target market consists of environmentally considerate, activity-based consumers of all ages and demographic backgrounds. Besides the popular Fat Tire, NBB also brews a unique collection of standard, seasonal, and one-time varieties that are distributed to 28 states (plus the District of Columbia) from the Pacific coast, throughout the Midwest, and most recently into the Southeastern United States. Priced around $8.00 per six-pack, NBB microbrews are competitive with other microbrews, but convey a message of superiority over domestic beers.

NBB strongly believes in social responsibility as its main strategic priority (the case summarizes NBBs beliefs and its responsibilities to the environment, society, and employees). The companys efforts to live up to its own high standards have paid off with numerous awards and a very loyal following. Despite the accolades, there are still many ways for NBB to improve as a corporate citizen. For example, the manufacturing process is a fair distance from being zero waste or emission free. Although all electric power comes from renewable sources, the plant is still heated in part by using natural gas. Additionally, there will always be a need for more public dialogue on avoiding alcohol abuse. Practically speaking, the company has a never-ending to-do list.

NBB executives acknowledge that as its annual sales increase, so do the challenges to remain on a human scale and to continue to be culturally authentic. How to boldly grow the brand while maintaining its humble feel has always been a challenge. Additionally, reducing waste to an even greater extent will take lots of work on behalf of both managers and employees, creating the need for a collaborative process that will require the dedication of both parties toward sustainability. As NBB looks ahead, its most important asset is its imagea brand that stands for quality, responsibility, and concern for society. Defining itself as more than a beer company, the brewer also sees itself as a caring organization that is concerned for all stakeholders.

This case does not present a challenge, but rather focuses on the positive impact that a company can make on its community. This is important and distinctive within the industry because many people feel the production and promotion of alcohol is immoral and naturally contradicts the desirable traits of business and society. Although many students will not have tried these products, some may be familiar with the brand. New Belgium should stand as an example of how a business can refute negative prejudices by exemplifying the ways in which a business can be environmentally and socially responsible.

Question

Review the concepts of Market Penetration, Market Development, and Product Development . Which of these is the MOST important for New Belgium and WHY?

3. Does New Belgium have a competitve advantage? If so, what is it and how do you exploit it? If not, what can they do to get one?