Mountain Man Brewing Company Case Analysis

Mountain Man Brewing Company is facing declining sales and net revenues. This is led by a

trend that in recent years has seen beer drinking decline with the exception of the light and craft

beer segments. For the first year in its history, MMBC has seen its revenues decline and the

company must consider how to respond to the adverse market conditions facing its core product.

The company’s goal is to insure its long-term growth and profitability. In order to do so they are

considering the launch of a light beer, leveraging their existing capacity to enter a still growing

market. This is a difficult concern as product extensions very often fail. To this point MMBC has

survived when many other independent brewers have gone out of business due to their good

quality, their reasonable prices and their strong brand.

In this, brand is key, with many customers expressing substantial loyalty and respect for its

rugged, independent flair. MMBC remains family-owned and has built a continuous connection

to its customer base since its 1925 founding. This traditional recognition is bolstered by

continued accolades, having won “Best Beer” awards in both West Virginia and Indiana.

Unfortunately, MMBC has an aging demographic, drawn mostly from blue-collar middle-aged

(and older) men. However, while the premium beer category, to which Mountain Man Lager

belongs, declined 4% in annual sales, MMBC lost only 2% of its revenues. As light beer is

growing and holds more prosperous demographics, there is a strong case to be made for entering

this market. However, the risk of damaging the existing brand and cannibalizing sales by

competing with already entrenched light beer market players is undeniable.

If MMBC were to merely accept the status quo without any new investment or strategic change

the company would likely be facing systematic decline. But the question is not merely whether to

use existing capacity to launch a new product or abject inactivity. Reinforcing our existing core

product and entering new markets also needs to be a consideration.

Launching Mountain Man Light: risk