Moosehead Brewery
Case Study
Team Maple
Lindsay Barker
Emelito Carino
Athena Estremadura
Pinder Pooni
May Wong
Introduction
Moosehead Brewery, situated in New Brunswick, would like to distribute its beer in the Quebec
market. The company would like to decide on the distribution strategy best suited for its product to
enter the Quebec market.
Problem
How can Moosehead devise a marketing entry strategy for Quebec to increase sales volumes
while overcoming the distribution and relationship management issues? Assume Moosehead Brewery
has the funds and resources to penetrate the Quebec market.
Key Findings
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The brewery was founded in 1867 by Susannah Oland and is still operated by the Oland family
The Halifax Mooseheads junior hockey team is named after the brewery
Assumptions
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Moosehead Brewery has the funds and resources to penetrate the Quebec market
SWOT
Strengths:
 Self advertising through the junior hockey team
 Canada’s largest 100% Canadian brewery because Molson and Labatt are foreign owned.
 Distributes beer nationally to all provinces except Quebec and Saskatchewan, and in over 60
countries internationally.
 Founded in 1867, resulting in a very well-known name in the beer industry.
 Effectively promote their products via trials to consumers, print, radio, billboards, and signs.
 Attains the largest market share of all the smaller Canadian breweries.
 Channelling its product to Quebec would not be difficult because they are neighbouring
provinces.
 Has great brand awareness across Canada, even in areas without their products, such as
Quebec.
 Offer different products to fit consumer needs (Moosehead Light for the clean light feeling and
taste, and Moosehead Light Lime for the more flavoured taste).
 Has purchased other manufacturing facilities, which includes their 50% stake in the McAuslan
brewery in Quebec, as well as completely owning the Niagara Falls Brewing Company in Ontario.
Team Maple
Weaknesses
 Has not been adapted by the entirety of Canada although it is widely known.
 New Brunswick and Quebec have inter-provincial issues causing Moosehead to not reach the
Quebec market as easily as it has in other provinces.
 Worry a lot about pricing rather than overall quality and value, as in the 1980s when they lost a
large portion of their market share by trying to compete with prices of the larger US breweries.
 Markups and taxes on alcoholic beverages differ from province to province as well as pricing and
promotion which varies by the different regions.
 For Alberta and Quebec, the retailers must negotiate contracts for obtaining and promoting
Moosehead’s products because the alcohol is delivered to independent retailers. This does not
guarantee the promotion of their products to be done as effectively as Moosehead would
originally promote it.
 In Alberta and Quebec, Moosehead must assume costs of warehousing their inventory because
a stronger channel management program is required.
Opportunities
 50% share of McAuslan brewery, based out of Quebec
 Begin promoting and distributing their products in Saskatchewan and Quebec, which are the
two provinces Moosehead currently does not distribute to.
 Quebec currently holds the second largest beer consumption market in Canada, and neighbours
New Brunswick, thus making distribution costs lower than usual.
 To make sure there is more purchasing of beer within the province, the provincial government
has implemented a government-branded beer which is cheaper than the price of other brands.
Moosehead has a huge opportunity because they are the producers of the beer.
Threats
 Large number of independent microbreweries
 Family owned, with less resources in comparison to foreign owned competitors
 Moosehead Brewery must be cautious with promoting their brand across the nation because
there is different drinking ages in some provinces compared to others.
 The language, culture, and regulations differ in Quebec compared to the areas Moosehead
normally distributes to.
 Since selling in Quebec will cause distribution costs for each company to be $48 per hectolitre,
Moosehead may end up facing high costs when selling in Quebec.
 Moosehead Breweries has received mixed opinions from the public for producing the
government-branded beer. This may result in conflict and unnecessary trouble along the
Quebec border as well.
 Promotion in the independent retailers in Quebec will not allow Moosehead Brewery to have
full control of promoting their products.
Team Maple
Competitive Analysis
Labatt:
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Started in London Ontario in 1995 was purchased by a Belgium based company.
Is the world’s leading brewer and holds the largest market share in Quebec.
Top selling brand is Labatt Bleue
Molson:
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North America’s oldest beer brand and was founded in Montreal.
Merged with Coors Ltd.(an American company) in 2005
Top selling brand is Molson Canadian
Has a large following in the francophone market
Sleeman:
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Founded in Canada in 1988.
Purchased in 2006 by Japanese based Sapporo Breweries
Top selling brown is Sleeman Honey Brown
Unibroue
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European style beer targeting the francophone market.
Brewed and distributed within Quebec.
Second largest Canadian owned brewery based in Quebec
Top selling beer is La Fin Du Monde
Target Market
Moosehead’s target market is beer drinkers in Quebec. The bracket of targeting will focus on those aged
25-44, the largest beer drinking demographic. This population is 2, 165, 740, or 30% of the Quebec
population. Males typically purchase more beer than females, and the male population of Quebec in this
demographic is 1,077,470. Moosehead will specifically target both genders in this age bracket, but
marketing will focus more on the male consumer than female.
The francophone population makes up 80% of Quebec’s total population, and will be a large part of
Moosehead’s target market.
Team Maple
Recommendations
Alternative 1 - Extensive Distribution: Distribute to Societe des alcools du
Quebec (SAQ) stores for selling
Advantages
 SAQ typically caries high quality brands, thus creating a high perceived value for the Moosehead
product
 Low variety of beer sold, allowing Moosehead to hold a large shelf space
 SAQ has an online store, reaching a larger market as well as 346 retail locations
Disadvantages
 SAQ has a negative image from a price fixing scandal
 Sells mostly to wine and spirit consumers
 Large amount of advertising needed to introduce consumers to the brand
Alternative 2 – Intensive Distribution: Sell to Costco/Sobeys/Loblaws/Metro
Inc
Advantages
 Ability to offer a large assortment of products
 Very large market penetration due to multiple retailers
 High profits from high volume of sales
Disadvantages
 Dilutes and weakens the image and value perceived by consumer
 Would be sold at lower costs due to competition and profit margins would be lower
 Extra advertising would be needed due to large number of brands sold at each retailer
Alternative 3 – Selective Distribution: Distribute to pubs and restaurants
Advantages
 Build brand loyalty in that sector and would generate awareness
 Consumers perceive as a high value product and thus would pay more
 Exclusively positions the product towards target market
Disadvantages
 Selective target market
 Low market penetration
 May not be operating to full capacity
Team Maple
Solution
Exclusively distribute to the SAQ and allow them to sell the product. A higher price can be set because
there are no competitors and therefore profit margins will be greater. Moosehead initially uses a strong
licensee push, which they can use with the SAQ to build awareness, and then follow up with print, radio
and signs to create a wider awareness
Implementation Plan
1.
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Negotiate with the SAQ on prices, distribution costs and legal contracts
Selectively research each SAQ region on beer preferences and value
Push licensing and create product trials in major SAQ locations based on research
Advertise at sporting events, as well as through radio and tv broadcasts
Plan B
If Moosehead Breweries wants to continue their distinction and company growth they can go further
into the market they currently have in Ontario. This is a great option because they are already
distributing their alcohol to the LDBs which further sell to the consumer. Moosehead also currently
owns the Niagara Falls Brewing Company, and if they focus on the vast market across Ontario they will
only enhance their company.
Course Concepts
References
Team Maple