Paddock Wood Brewing Co: A Strategic Analysis Report
Maha Kumaran
Executive Summary
This analysis showcases what Paddock Wood currently does well and what it can do better in the future to expand its market. Paddock Wood does not have an updated marketing plan and there is no promotional budget. While it is enjoying catering to a niche market, the influx of population demographics continues to change and there is no guarantee of loyalty from their customers. Beer industry continues to be strong and stable in Canada, but craft breweries are smaller in scale and don’t have a large profit margin. Paddock Wood needs to invest in advertising to groups by offering taste testing occasions perhaps in locations like the University campus in Saskatoon and Regina to attract more crowds. Lowering their costs is not an option but marketing themselves as super-premium, high quality beer would help draw customers without damaging their image.
Introduction
According to their website, Paddock Wood is “Saskatchewan’s first microbrewery” that produces craft beers in unique and distinctive flavors that could not be normally found on the shelves of a liquor store. It started in 1996 and has since grown to numerous attract shareholders. The focus is on keeping products simple with four major ingredients – malt, hops, yeast, and water – and offering the “right balance between hops and the malt” and creating great tasting quality beer. The physical location of the store also has a menu of snacks, starters, soups, salads, sandwiches and main courses. It was mentioned in a recent article in Toronto
Star (2014) as one of the places to visit in Saskatoon that offers “20 different types of beer.” It has won some local and national accolades for its beers such as the 2014 Planet S “Best Local
Brew” for the 7th year in a row and won Gold and Bronze at Calgary’s Beer Fest more than once.
While PW has found its niche in providing unique flavors that were otherwise unavailable to
Saskatchewan customers at many local pubs and has a physically inviting place that offers food with beer, that strategy alone is not adequate to meet the growing needs of this province’s beer consumers and to compete with the large multinational beer supplying businesses.
“Brewing is the production of by steeping cereal grains in water and fermenting the resulting sweet liquid with yeast” (Wikipedia, 2014). According to The Conference Board of Canada
(2014), beer is the most popular alcoholic beverage and this industry supports 163,200 jobs across the country. The chart below from Beer Canada (2014) shows that Canada still produces significant amount of its beer locally.
1
http://www.beercanada.com/
In the last few years brewing industry in Canada has had to cope with significant changes. To name a couple, these changes have included (1) decrease in per capita consumption of ‘brand name’ products; (2) increase in demand for ‘niche’ market specialty products supplied by microbrewers; and 93) recent shift towards less expensive domestic beer during the 2008 recession (Agriculture and Agri-Food Canada, 2014). In spite of its challenges, Canada manages to stay as one of the top 25 per capita beer countries in the world.
http://www.beercanada.com/
The Conference Board of Canada also indicates that the three Canadian Prairie provinces are generally known, not for their brewing, but for their energy, water and grain supplies to
“support the distribution and warehousing of beer.” Beer Canada’s statistics on domestic and imported beer from various provinces supports this statement.
2
http://www.beercanada.com/
But of all three Prairie Provinces, Saskatchewan seems to be the leading province in the number of licensed breweries it holds among the Prairie Provinces.
http://www.beercanada.com/
It was not long ago that craft beer had a niche market for the high-income people. Today, the market has evolved and anyone can afford to buy one in their local restaurant or the liquor
store.
