Performance and Strategy of North American Small-Cap Breweries

Abstract

Within the competitive landscape of the North American beer industry are seven publicly-traded, small capitalized brewers. These firms appear to draw on elements of both the small, craft , and traditional producers on the one hand and the large, publicly-traded corporations on the other. This chapter examines the financial performance of these seven companies, which are headquartered across Canada and the United States in Boston, MA; Boone, NC; Ukiah, CA; Portland, OR; Surrey, BC; Calgary, AL; and Kitchener, ON. The chapter begins with an introduction to the industry. Following this, an overview of the relationship of strategy , craft brewers and the geography of differentiation is provided. This is important because it appears publicly-traded brewers veer from a focus on local geographies by listing on stock exchanges, at least in terms of ownership. The literature of craft brewers and finance is also reviewed. The chapter then provides an overview of how the analysis was completed and about which firms’ company financials are provided and analyzed, from which a consideration of strategy is developed. Lastly, some other opportunities for further research are provided. Particularly noteworthy in the financial analysis is the performance of one small-cap brewer, the Boston Beer Company. Boston Beer consistently shows strong financial results, and there are indicators that its success is based on its ability to achieve the benefits of large-brewer scale while retaining the brand appeal of a small, craft brewer. This leads to discussion of the strategic positioning of the various brewers by size, and suggests that Boston Beer may be “thriving in the middle.”