Marketing: Custom Edition for Texas A&M University 17th Edition by William Pride,Ferrell

Exercise 7

Cruising to Success: The Tale of New Belgium Brewing
In 1991, electrical engineer Jeff Lebesch and Kim Jordan began making Belgian-style ales in their basement. The impetus for the brewery occurred after Lebesch had spent time in Belgium riding throughout the country on his mountain bike. He believed he could manufacture high-quality Belgian beers in America. After spending time in the Colorado Rockies deciding the values and directions of their new company, the two launched New Belgium Brewing (NBB), with Kim Jordan as marketing director. The company's fi rst beer was named Fat Tire in honor of Lebesch's Belgian mountain biking trek. Fat Tire remains one of NBB's most popular ales.
NBB has come far from its humble basement origins. Today, the Fort Collins-based brewery is the third-largest craft brewer in the country with products available in 28 states. Kim Jordan helms the company as one of the few female CEOs of a large beer fi rm. "This entrepreneurial thing sneaks up on you," Jordan states. "And even after 20 years, I still have those pinch me moments where I think, wow, this is what we've created here together." While total beer sales are dropping in the United States, sales in the craft beer industry have increased to $8.7 billion. NBB has a sales growth rate of 15 percent.
Creating such success required a corporate culture that stressed creativity and an authentic approach to treating all stakeholders with respect. While the New Belgium product is a quality craft beer, just as important to the company is how it treats employees, the community, and the environment. Each element of the marketing mix was carefully considered. The company spends a signifi cant amount of time researching and creating its beers, even collaborating with Seattle-based Elysian Brewing to co-create new products. This collaBEERation has led to products such as Ranger IPA and Kick. NBB's culture is focused on making a quality product and satisfying customers. It has even ventured into organic beer with its creation of Mothership Wit Organic Wheat Beer. The company has several product line varieties, including its more popular beers Fat Tire, 1554, and Sunshine Wheat; seasonal beers such as Dig and Snow Day; and its Lips of Faith line, a series of experimental beers including La Folie and Prickly Passion produced in smaller batches.
The distribution element of the product mix was complex at the outset. In her initial role as marketing director, Jordan needed to convince distributors to carry their products. Often, new companies must work hard to convince distributors to carry their brands as distributors are fearful of alienating more established rivals. However, Jordan tirelessly got NBB beer onto store shelves, even delivering beer in her Toyota station wagon. As a craft brewer, NBB uses a premium pricing strategy. Its products are priced higher than domestic brands such as Coors or Budweiser and have higher profi t margins. The popularity of NBB beers has prompted rivals to develop competitive products such as MillerCoors' Blue Moon Belgian White.
Perhaps the most notable dimension of NBB's marketing mix is promotion. From the beginning the company based its brand on its core values, including practicing environmental stewardship and forming a participative environment in which all employees can exert their creativity. "For me brand is absolutely everything we are. It's the people here. It's how we interact with one another. And then there's the other piece of that creativity, obviously, which is designing beers," Kim Jordan said. NBB promotion has attempted to portray the company's creativity and its harmony with the natural environment. For instance, one NBB video features a tinkerer repairing a bicycle and riding down the road, while another features NBB "rangers" singing a hip-hop number to promote the company's Ranger IPA ale. The company has also heavily promoted its brand through Facebook and Twitter. This "indie" charm has served to position NBB as a company committed to having fun and being a socially responsible company.
NBB also markets itself as a company committed to sustainability. Sustainability has been a core value at NBB from day one. The company was the fi rst fully wind-powered brewery in the United States. NBB recycles cardboard boxes, keg caps, office materials, and amber glass. The brewery stores spent barley and hop grains in an on-premise silo and invites local farmers to pick up the grains, free of charge, to feed their pigs. The company also provides employees with a cruiser bicycle after one year of employment so they can bike to work instead of drive.
NBB's popularity is allowing it to expand on the East Coast with plans to continue expanding throughout the United States. The combination of a unique brand image, strong marketing mix, and an orientation that considers all stakeholders has turned NBB into a multi-million dollar success.
How has New Belgium implemented the marketing concept?