Big Rock Brewing Company

The Brewing of a Brewery...

Big Rock Brewing company was founded by a lawyer by the name of Ed McNally who was originally from Lethbridge, AB and they produce premium, all natural craft beers. This business would be considered to be in the private sector as it is run by a group of individuals whom are not involved with the government. The events leading up to the decision transpired in 1984 when apparently there was nothing more than "lager A" and "lager B" to choose from when it came to the beautiful barley beverages and Ed was just not satisfied. Now rather than complicating things and having some beer imported he decided to "take the easy way out" (Big Rock History) and instead open up his own brewery. And so it began. The original three beers were ones that Ed liked. His plan was quote "...to make the beers that I want to drink, not what will be popular.” Probably not the best of business decisions as 2/3 of those beers no longer exist. The one remaining being Traditional which is a favorite of many.

In 1985, Ed opened up shop and "imported" their first brewmaster from Switzerland who went by the name of Bernd Pieper. He was apparently internationally renowned and previously worked for Heineken. After that was a brewmaster who had worked for Molson who 4 years later took on the role as brewmaster when Pieper retired in 1998. And last but not least was apprentice brewmaster  Paul Gautreau who now leads the way for Big Rock.

After just a year of trying to make a name for themselves came the Brewery Strike of 1986 in which Molson and Labatt both ceased production. This was a huge turning point for Big Rock as they were the only beer available in Alberta that year and Albertan's sure like their beer! Demand increased on an extreme scale and the brewery had to work around the clock in order to supply that increased demand. Then, just 2 years later Big Rock received another big break when the 1988 Winter Olympics were in town. The international spectators discovered and loved the European inspired brews and soon Big Rock was receiving international media attention for their craft beers; a huge feat for this brewing industry.


Who Drinks Big Rock and How is it Made?

Beer production over the last 20 years seems to have become more of an art form. Perhaps that's why they call it "craft" beer. The founder himself encouraged creativity as even he had a particular flavor that he preferred. Currently big rock is brewing 13 different flavors of beer which appeals to a very diverse demographic. There's a beer for everyone - and in Alberta's "pub culture" it is very important to have variety. From blue collar oil riggers to upper class business man, they craft a beer that's suitable for anyone who finds themselves thirsty.

Big Rock brews are slightly higher in price due to their lower rates of production in comparison to breweries such as Molson and also, they prefer to use local products of the highest quality and as we all know, whether in Alberta is quite unpredictable, so the costs for raw materials are variable. Fixed costs would be things such as the building itself and the brewing equipment. The going rate for a 6 pack would be about $14 where you could get a 6 pack of Canadian for around $11. I'll pay the extra $3 for a local product that is far superior and locally owned.

There are 12 stages in the production process of Big Rock Beer which can be found here. It even comes with fun illustrations!

As you can see from the chart to the left which represents Big Rock's revenue over the past five years, demand drastically increased between 2008 and 2009 which was coincidentally the beginning of the global recession. According to Walters and a study done by Economic Times, "the latest economic recession has brought about increased alcohol consumption, including problem drinking such as binge drinking and driving under the influence."

Profits for the Big Rock Brewing company appear to be quite unstable over the last 8 quarters. This could be as a result of many factors, most likely due to the fluctuating costs of raw materials and even the time of year. Consumption of beer tends to rise during the hot summer months, and fall in the winter. These costs must be consumed by Big Rock as there is mutual interdependence in this oligopolistic market and they must take into consideration the repercussions they would experience from a price increase to cover the rising costs.  Loyal consumers may be lost and competitors will benefit from doing nothing at all. This is a classic example of game theory which is a method of analyzing the behaviors of competing firms, or breweries in this case. All things must be considered before making decisions that could potentially be a further detriment to the company. In this industry, they must work in terms of self-interest.

Mr. Keith vs. Mr. McNally...

I think that Alexander Keiths Brewery would be Big Rocks closest competitor because they have about the same variety of beers to choose from, they are both Canadian companies and will all have their local loyal consumers.

Big Rock would have a competitive advantage due to the luck of timing they had in the late 80's during the strike of the dominant brewing companies and their free advertising which stemmed from the Olympics in 88'.

Summary

Big Rock has become a successful brewing company for various reasons. Obtaining skilled and creative brew masters, drive and ambition and just plain dumb luck. They have loyal consumers all over Canada because they are a local company and we all try to support our own economy whenever we can. Plus, it's damn good beer.

"Three cheers for real beer!"



References:

Wikipedia. (201, November 09). Retrieved December 17, 2012, from Big Rock Brewery: http://en.wikipedia.org/wiki/Big_Rock_Brewery

Big Rock Brewery. (2012). Retrieved December 17, 2012, from http://www.bigrockbeer.com

Walters, J. (2011, October 14). Shape Magazine. Retrieved December 17, 2012, from Study Finds We Drink More — Not Less — During Bad Economic Times: http://www.shape.com/blogs/shape-your-life/study-finds-we-drink-more-%E2%80%94-not-less-%E2%80%94-during-bad-economic-times