If an organization is going to run a business in the US brewery industry, it should be aware of the three-tier alcohol distribution system. The system was created in 1933 “as a result of an amendment to the US Constitution” (Meier & Wang, 2021, p. 3). According to this legislation piece, the beer industry was divided into three tiers, including production, distribution, and retail. A firm was typically allowed to operate within one area, which meant that beer producers and packagers could neither warehouse and distribute their products nor sell them to buyers through bars, restaurants, and stores (Meier & Wang, 2021). The scenario above is generalized, and some states could allow producers to distribute and sell their products in retail. As for Brooklyn Brewery, it was forced to sell beer through a distributor from New York (Meier & Wang, 2021). The system was implemented to combat monopolies and establish fair competition for multiple businesses.
The Brooklyn Brewery faced various advantages and disadvantages because of its close connection to Brooklyn. On the one hand, the area had a huge brewing tradition (Meier & Wang, 2021). This statement denoted that the organization was in the right environment to open a business. Furthermore, Milton Glaser, a renowned graphic designer, stipulated that multiple people somehow associated Brooklyn with beer, which became a positive marketing aspect for the organization. On the other hand, the location also implied some weaknesses, and one of them referred to the fact that Brooklyn was not commercially developed when Hindy and Potter opened the brewery (Meier & Wang, 2021). Another disadvantage occurred because the company initially brewed beer in upstate New York, which harmed the marketing image of the organization that positioned itself as a representative of Brooklyn. Thus, I believe that it was wise to include Brooklyn in the company’s name since it demonstrated that the organization wanted to be associated with a rich history of breweries in the region.
The brewing industry has faced significant changes over recent years. Firstly, the number of breweries has increased dramatically, and there were more than 3,000 companies in this sector in 2014 (Meier & Wang, 2021). Secondly, even though beer per capita consumption has declined in the United States, Americans were still ready to spend much money on this alcoholic beverage, which was beneficial for producers (Meier & Wang, 2021). Thirdly, the number of distributors has also decreased, and 3,333 companies were left in 2013 out of 5,000 in the 1970s (Meier & Wang, 2021). Fourthly, brewers started spending high sums to facilitate their advertising campaigns and cover larger market shares. Finally, the craft beer revolution has significantly influenced the industry, which gave rise to multiple microbreweries (Meier & Wang, 2021). All these factors provide the Brooklyn Brewery with tough market conditions to succeed.
Since the market became oversaturated with competitors and many producers started reporting declines in 2017, the Brooklyn Brewery needed to consider specific options for future growth. However, possible variants imply some tradeoffs, and one of them stipulates that the company should reach new geographic markets, which requires additional investment. It can also be advantageous for the brewery to engage in traditional TV advertising, but the organization did not rely on this approach previously, which denotes that sufficient efforts should be allocated to cope with it. Finally, the Brooklyn Brewery is forced to diversify its product range to include ciders and low-alcoholic beers, but this approach goes against tradition. Consequently, the company should balance these tradeoffs to promote future growth.
Reference
Meier, S., & Wang, D. J. (2021). Brooklyn Brewery: Setting the course for growth [PDF document].