MEMORANDUM
To: CEO of Mountain Man Brewing Company
From: Marketing Analyst
Subject: The Future of MMBC, Growth Strategy & Challenges
Date: 02/02/2020
It is important for MMBC to increase their sales, maintain market position in East Central region.
MMBC needs to expand with new product or a business plan. Introduction of a new product comes with
heavy spend on advertisement nationally and regionally yielding in additional expenditures. Lack of
resources would pose challenges to compete against deep-pocketed competitors for the segment. Growing
share of international brands and competition with domestic brands in MMBC’s stronghold is further
impacting MMBC’s sales. Since 2001, the US per capita beer consumption has declined by 2.3%, attributed
to increased competition from wine and spirits-based drinks, tax increase, pressure from large national
breweries, increased health awareness. Repealed state law has limited the promotion and advertising of
beer in retail establishments resulting into retail stores taking actions is the addition in decline. To remain
in the business and stay competitive, MMBC should think about introducing a light beer under a new brand
name and refrain from alienating their already loyal customers. MMBC can consider expanding the business
of lager by adopting contract brewery model if light beer is not an option. The decision shall be taken
without losing the focus on their core product and current loyal customers.
Over the previous six years, light beer sale is growing at a compound annual rate of 4%. Based on the
market statistics and future growth needs, introduction of a light beer would be an advantage. Addition of
younger drinkers who haven’t yet established brand loyalty and the female population preferring light can
grab at least some part of the growing segment. Currently Mountain Man Lager is consumed by hardly 19%
females compared to 81% male customers. In short term, MMBC would not require capital expenditures
on tangible assets. Thus, MMBC gets more business with minimal capital investment. Light beer would
help in getting more attention, business and shelf space from the distributors. Contract brewery is still a
lucrative business model as it accounts for 16% of craft deer volume. With minimal investment, this can
win more business opportunities to MMBC. However, introduction of light beer may alienate the loyal
customers and may result into brand dilution if not positioned properly. Additional staff and marketing
expenses are associated with it. Launching a new product could be an expensive affair as MMBC is a lean