Moosehead Secondary Research Assignment
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Transcript of Moosehead Secondary Research Assignment
Sheridan Marketing Management
Moosehead Lager Secondary Research AssignmentMatthew Belo
13Fall
Introduction............................................................................................................................. 3
Market Overview..................................................................................................................... 4
Competitors............................................................................................................................. 7
Demographics and Consumer Behaviour..............................................................................11
Social Media.......................................................................................................................... 12
Conclusion............................................................................................................................. 13
Works Cited........................................................................................................................... 14
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IntroductionMoosehead Lager is the top-selling, flagship product of the
Canadian-based Moosehead Brewing Ltd., a private company,
owned by the Oland family and headquartered in New
Brunswick, Canada. The company was formerly known as
Maritime Brewing & Malting Co. and changed its name to
Moosehead Breweries Limited in 1947. (Datamonitor, Aug
2013, Pa6) Moosehead Lager is now sold globally with its
primary markets residing in the United States and Canada. (Euromonitor, 2013, Distribution).
Despite the companies recent success importing and diversifying it’s product line, the flagship
brew “Moosehead Lager” has fallen off of the ‘Big 10’ list at the beer store (The Beer Store, 2013, ‘Big
10’), and seems to be falling in popularity and sales.
The Moosehead Breweries Ltd. you see today has transformed drastically since its inception. In
1867, when Susannah Oland sailed from England to Nova Scotia with her family with her recipe for a
rather delicious brown October ale (Moosehead, 2013, History). Moosehead still remains today
completely and independently run by the Oland family in Nova Scotia.
The Moosehead Breweries Ltd. will now be in its’ fifth generation of ownership. (Denise Deveau,
Oct 2012, Pa1). Despite the numerous setbacks and boundaries for the Oland family, such as the Halifax
explosion that levelled operations, to the challenges of prohibition, the family has managed to rally and
stand firm to become Canada’s oldest and largest independent brewer (Moosehead, 2013, History).
But despite this rich, deep Canadian heritage, it is surprising to learn that it met some of its greatest
success when it began selling to the United States in 1978. The following was taken from an interview
with Patrick Oland, one of the Oland brothers currently running the company: “We’ve been a fixture in
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Saint John since 1919. Up to 1978, we only sold to New Brunswick, Nova Scotia and P.E.I. At that point
we decided to launch Moosehead Lager in the United States. At the time, introducing a premium product
went against the conventional wisdom of selling beer at a cheap price. But it paid off in sales numbers”
(Denise Deveau, Oct 2012, Pa1).
According to company president, Andrew Oland, when he and his brother Patrick took the helm
four years ago they began to explore new directions to ensure the company could hold its own in the face
of increasing competition from multi-national brewers. The Brothers have now opened a new bottling
plant, forged a number of exclusive international partnerships, and are rebranding to appeal to a broader
market base (Denise Deveau, Oct 2012, Pa1).
Moosehead has 10 brands, including domestic and export lines, which include: Moose Light,
Moosehead Pale Ale, Moosehead Premium Dry, Moosehead Dry Ice, Alpine Lager, Alpine Light, Clancys
Amber Ale, Cold Filtered Light and the recently added “craft” beer, Boundary (Moosehead, 2013,
Products).
With their great success down south in the states, it is time for Moosehead to focus back home on
the Canadian market. They can do this if they leverage its reputation as a long time premium and “craft”
brewer to steal some market share from the now stagnating top player in the Canadian beer market,
Molson Coors, and ride the current trends towards specialty and craft brews.
Market Overview
An estimated ten million Canadians drink beer and an estimated 21.9 million hectoliters are produced
annually, making it the number one alcoholic beverage in Canada in terms of both production and
consumption (Government of Canada, Sep 2013, Pa3). That’s a lot of beer! According to DataMonitor
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“The Canadian beer market had total revenues of $11,960.1m in 2012, representing a compound annual
growth rate (CAGR) of 0.6% between 2008 and 2012. Market consumption volumes decreased with a
CARC of -0.2% between 2008 and 2012, to reach a total of 2,284.9 million liters in 2012. The
performance of the market is forecast to decelerate, with an anticipated CAGR of 0.3% for the five-year
period 2012 - 2017, which is expected to drive the market to a value of $12,134.3m by the end of 2017”
(DataMonitor, August 2013, Pa1).
Being a privately owned, yet trading their products globally, Moosehead faces some unique
marketing challenges. “Moosehead beer is sold in about 14 countries, 50 American states and all across
Canada” (DataMonitor, August 2013, Pa6). As previously mentioned, Moosehead Lager has had early
breakthrough success in the US market throughout the 80s. But now that business conditions are more
applicable for better penetrating the Canadian market the report will focus more on the Canadian side of
things. However, in order to succeed Moosehead will have to overcome some of the current marketing
challenges.
The Canadian beer market marginally expanded between 2009 and 2012. The market is forecast to
continue expanding at meager rates, with volumes contracting throughout the period. “Demand for beer in
Canada remained low in 2012 as the shift towards other alcoholic beverages continued, including wine
and various spirits areas, many of which are undergoing significant product development and marketing
activity” (Euromonitor, Sep 2013, Beer in Canada Pa2).
Despite the falling demand for Beer, some areas recorded good volume growth, such as imported
and premium beer as well as craft beer. “’Craft inspired’ or ‘faux craft,’ depending on one’s perspective,
offerings from the industry’s behemoths have already began making waves. As an initial incubation
period now comes to an end, 2013 will see big beer players invest in more complex and stratified specialty
portfolios at the same time that price competition inevitably intensifies further” (Malandrakis, Feb 2013,
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Pa1). Moosehead has already developed an answer to the craft brew trend with the introduction of their
newest product: “Boundary Ale”
‘“We’re not a craft brewery, but we wanted to develop a product that had a more diverse and
complicated flavour profile for that consumer,” said Katie Kennedy, director of marketing for
Moosehead. “We feel there’s nothing else like it in the Canadian marketplace”’ (Powell, June 2013, Pa5).
This product will not rely on traditional marketing and instead be promoted by beer-tastings and word of
mouth. While Moosehead may no longer be small local brewer, they have long been marketed and
perceived as a “faux-craft”, premium beer. Using their mass distribution while being privately run opens
a unique opportunity to be a mass-produced craft brew, with easy access to North American and Global
markets. And, “given their generally higher price points [craft beers], these products also help to maintain
value growth in beer overall (Euromonitor, Sep 2013, Beer in Canada Pa3). “The premium lager segment
was the market's most lucrative in 2012, with total revenues of $4,557.6m, equivalent to 38.1% of the
market's overall value. The standard lager segment contributed revenues of $4,219.0m in 2012, equating
to 35.3% of the market's aggregate value.” (DataMonitor, August 2013, Pa4)
Here is a list provided by Ontario-based The Beer Store’s current top 10 products (The Beer Store, 2013,
The ‘Big 10’ Brands):
1. Coors Light
2. Molson Canadian
3. Budweiser
4. Blue
5. Bud Light
6. Carling Lager
7. Busch
8. Alexander Keith’s
9. HeinekenMKTG 54093 – Matthew Belo Page 6 of 14
10. Lakeport
CompetitorsThe most direct competition to Moosehead Breweries is Molson Coors and Anheuser-Busch InBev, the
leading 2 beer producers in Canada. Both companies sell products internationally, and focus on a global
market. Both of these companies are now run out of the United States. (Datamonitor, Aug 2013, Pa20)
According to the 2012 Annual Report for Molson Coors: “We are Canada's second-largest brewer
by volume and North America's oldest beer company. Our approximate market share of the Canada beer
market in 2012 was 39%. We brew, market, sell and distribute a wide variety of beer brands nationally.
Our portfolio has leading brands in all major product and price segments. Our focus and investment is on
key owned brands, including Coors Light, Molson Canadian, Carling, Molson Dry, Molson Export,
Rickard's, Pilsner, Creemore Springs and Granville Island and strategic distribution partnerships,
including those with Heineken, Modelo and SABMiller. In 2012, Coors Light had an approximate 14%
market share and was the top selling beer brand in Canada, and Molson Canadian had an approximate 8%
market share and was the third top selling beer in Canada” (Molson Coors, 2012, Item 1)
These are certainly numbers that can’t be ignored by Moosehead Brewery Ltd. Molson Coors has long
been the Canadian behemoth when it comes to beer. However, much of the success of both Molson-Coors
and Anheuser-Busch is based on their choice to shift their focus to global markets, leaving ample
opportunity for Moosehead Lager to swoop in and grab some of those individuals switching brands inside
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the Canadian market.
While these competitors continue to experience successful growth, they are forced to expand into
new brands and new markets, while their historically popular and powerful brands slowly lose popularity.
“The decline has been as swift as it has been deep. In 2000, Blue and Canadian held an estimated 10-11
and 11-12 per cent of the national market, respectively, according to a former senior beer industry
marketing executive. Molson and Labatt are now part of larger international companies, and that’s part of
the problem, said Kincaid. In both cases — Molson-Coors and AB InBev, respectively — the companies
seem determined to focus on a few big international sellers, rather than any Canadian brand. In the case of
Molson-Coors, it’s Coors Light. With AB InBev, it’s Budweiser, Bud Light and Stella” (Rubin, Dec 2010,
Pa10).
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Business Conditions
There have been numerous external business factors when it has come to the Brewery. One significant
change in the market that applied specifically to Moosehead was The Agreement on Internal Trade
(AIT). This Canadian agreement, signed by both the federal government and the provinces in 1994 to
facilitate inter-provincial trade, resulted in the reduction of some trade barriers between provinces,
particularly in western Canada. (Government of Canada, Sep 2013, Pa1). This further paved the way for
a more unified Canadian market, which underwent major restructuring of production during the period
1995 to 2005. Moosehead, being one of the Larger Canadian Brewers but based out of Nova Scotia,
greatly benefitted from this shift. Moosehead, as well as other major breweries across Canada “were able
to achieve greater economies of scale during this period by closing smaller plants and consolidating
production in fewer but larger establishments” (Government of Canada, Sep 2013, Pa1). In fact,
Moosehead original used to sell only in the maratimes up until about 1978 when it started selling to the
United States. It has only begun selling to the Western provinces since the agreement was put in place.
As of January 2000, import duties on all foreign beer were removed, creating an additional
challenge to the domestic brewery industry. This, in turn, lead to reductions in trade barriers to imports
accompanied by the development of a more global beer industry have increased competition in the
Canadian beer market. According to industry experts, the fluctuating value of the Canadian dollar can
place pressure on Canadian exporting competitiveness, which in turn could result in multinationals
reassessing their continued manufacturing in Canada (Government of Canada, Sep 2013, Pa17). A
weaker U.S. dollar adds to the potential of increased competition from imports in the future.
With the great shift in beer demand, and therefore new methods to market these brands there is
bound to be unique business challenges to deal with. Although craft beer continues to record healthy
gains, it also continues to face challenges in what is a highly competitive environment, with retail
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distribution being controlled in most provinces and major breweries taking-up significant shelf
space. (Euromonitor, Sep 2013, Beer in Canada Pa5)
In addition, being an independent brewer going up against large publically traded corporations,
and trying to break the market with a small “craft” brewed product can seem like a David and Goliath
story. According to Andrew Oland, President at Moosehead Breweries “The competition is tougher and
large independent brewers are disappearing. We compete against large, multi-national brewers 50 to 100
times our size. While we can’t do that on some levels, one of the things we have been able to do is engage
in product innovation. Part of that is expanding the group of beers we import. These brands are nice
additions to our portfolio and we have managed to acquire exclusive import and distribution rights for
them” (Denise Deveau, Oct 2012, Pa5).
There have additionally been some external conditions that have affected sales of beer in the past
few years: “Problems with NHL negotiations and resulting ice hockey game cancellations (one of the
drivers of demand) continued to slow sales in 2012. While total current value sales increased by a modest
2% to reach C$16 billion, total volume sales remained flat at 2.3 billion litres in 2012” (Euromonitor, Sep
2013, Beer in Canada Pa2). Hopefully, with the NHL season back in place this season the beer industry
should see some growth.
Demographics and Consumer BehaviourThe Canadian brewery industry has an overriding challenge in terms of an aging and slow-growing
population, which is more concerned about health, and increasing cultural diversity in Canada. As
previously mentioned, there seems to be the trend towards other alcoholic beverages, especially with the
aging baby-boomer population: “Demand for beer in Canada remained low in 2012 as the shift towards
other alcoholic beverages continued, including wine and various spirits areas, many of which are
undergoing significant product development and marketing activity” (Euromonitor, Sep 2013, Beer in
Canada Pa2). These changes are said to contribute to declining per capita consumption and in order to
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counteract the change, increases in exports will be needed to maintain and build the performance of this
industry (Government of Canada, Sep 2013, Pa1). It should be noted that while there is ample opportunity
to penetrate new markets in Canada using novel marketing for the Moosehead Lager product, Moosehead
breweries Ltd. should still continue conducting business on the global scale to keep up with competition.
While targeting a new demographic of beer drinkers, there needs to be a slight shift in marketing to
how we get across to these consumers: ‘“The drinker we’re going after is not as influenced by marketing,”
said Kennedy. “They want to learn about beer on their own and experience it in a very natural state.
Because more people are trying things on their own right now, we feel it’s unique enough that we’re going
to get some natural word of mouth”’ (Powell, June 2013, Pa5).
Social Media Molson Coors current strategy is to focus on the environmental community-based side of things, flooding
their twitter feed with tweets promoting their “Our Beer Print” campaign, promoting the Company’s more
environmentally conscious and community friendly events and fundraisers (Molson Coors, Sep 2013,
Twitter Feed) Their real presence seems to lie on Facebook, where they promote many of their different
brands, and link many of their sponsored events. (Molson Coors, Sep 2013, Facebook Feed). The
Anheuser-Busch brand isn’t very strong online, as the company brand itself is rather weak, relying on its
many individual brands. Where Molson-Coors has a united page behind all of their products, the
Anaheuser-Busch doesn’t work as effectively in social media due to it not being a household brand name
(it relies heavily on marketing the Budweiser line of beers, which alternatively has some of the best social
media, sponsoring a plethora of events and advertising them via twitter and Facebook. Moosehead also
has an adequate online presence via twitter and Facebook, but in order to break the market and establish
Moosehead Lager and Boundary as craft beers, they need to step it up and host or sponsor more beer-
tastings or beer related events.
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ConclusionOn the business end of things, it seems clear that Moosehead needs to continue shipping it’s products
internationally and focusing on the global economy to increase profits. However, there is a huge
opportunity for the marketing team to develop a strategy that seizes the stagnant Canadian beer-drinking
consumer base. As President Andrew Oland himself said, the biggest means to competing with the big
guys is product innovation. Many of the biggest and most powerful beer brands are falling from grace, and
Moosehead Lager really needs to reinforce the brand it has already somewhat established, being an
independent premium lager, and ride the wave of the “Craft” beer-drinking crowd. While the introduction
of Boundary is definitely an intelligent choice, having a product that directly competes against other craft
brews, Moosehead has always been to set itself apart through the green bottle, premium price, and the fact
its independently owned and run out of Canada. Now with these unique business conditions, the shift in
demographics to craft drinkers, and the fall of some of the mightiest brands, Moosehead truly has the
opportunity to seize the spot as Canada’s independently-owned, homebrewed, craft beer, sold to a mass
market. This is the best means to gain control of the Canadian beer market.
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Works Cited@MolsonCoors (Producer). (2013, Oct 2 2013). Official Twitter feed of Molson Coors Brewing. Retrieved from https://twitter.com/MolsonCoors
Government of Canada (2013). The Canadian Brewery Industry. Web: Retrieved from http://www.agr.gc.ca/eng/industry-markets-and-trade/statistics-and-market-information/by-product-sector/processed-food-and-beverages/the-canadian-brewery-industry/?id=1171560813521.
Molson Coors. (Producer). (2013). Facebook. Retrieved from https://www.facebook.com/MolsonCoorsBrewingCompanyUkLtd?rf=106067262765716
Datamonitor. (2013). Canada - Beer (Market Research). Available from Gale Infotrac Sheridan College General BusinessFile ASAP. (A342417792). Retrieved Sep 30 2013, from Gale http://infotrac.galegroup.com.library.sheridanc.on.ca/itw/infomark/839/757/14162163w16/purl=rc1_GBFM_0_A342417792&dyn=6!xrn_1_0_A342417792?sw_aep=ko_acd_shc
Deveau, D. (2012). Moosehead Breweries battles the big guys with new initiatives, Financial Post. Retrieved from http://business.financialpost.com/2012/10/29/moosehead-breweries-battles-the-big-guys-with-new-initiatives/?__lsa=b8f7-d570
Euromonitor. (2013). Beer in Canada (Analysis). Euromonitor Retrieved Sep 30 http://www.portal.euromonitor.com.library.sheridanc.on.ca/Portal/Pages/Statistics/Statistics.aspx
Malandrakis, S. (2013). Beer: Identifying the Key Trends for 2013 (Senior Analyst - Alcoholic Drinks). Available from Euromonitor International Euromonitor Retrieved Oct 1 2013, from Euromonitor International http://www.portal.euromonitor.com.library.sheridanc.on.ca/Portal/Pages/Search/SearchResultsList.aspx
MolsonCoors. (2012). 2012 Annual Report on Form 10-K (U. S. S. a. E. Commission, Trans.) (Vol. 10-K, pp. 3-4).
Moosehead. (2013). History Retrieved Sep 28, 2013, from http://moosehead.ca/timeline/
Powell, C. (2013). Moosehead Establishes New Boundary for Craft Segment. Marketing Mag.
Rubin, J. (2010, Dec 10 2010). ‘Sniff of death’ taints iconic beer brands, The Star. Retrieved from http://www.thestar.com/business/2010/12/10/sniff_of_death_taints_iconic_beer_brands.html
TheBeerStore. (2013). THE 'BIG 10' BRANDS Retrieved Oct 10, 2013, from http://www.thebeerstore.ca/beers/big-10-brands
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