Long tradition on lager beer

SUPPLY CHAIN GINGER BEER University of the Sunshine Coast
Food Marketing / Task 2
AGENDA
1. Swiss beer market and potential of ginger beer
2. Supply chain flow
3. Evaluation of the supply chain

	Roles
	SWOT
	Key issues

4. Supply chain strategy

	Recommendations
	Conclusion

1. SWISS BEER MARKET AND POTENTIAL OF GINGER BEER
• Long tradition on lager beer
manufacturing
• Beer as the most consumed
alcoholic drink in Switzerland
• Mature market with stable forecast,
customers as main drivers in the
industry, demand towards innovative,
less-alcoholic, healthier and more
refreshable beers
• Drinking behaviour from high
frequency to a reduced amount of
quality products
Eidgenössische Zollverwaltung EZV 2017; Fentimans 2017; Marketline 2014; Marketline 2016; Passport 2017a; Schweizer Brauerei-Verband 2017
Beer in Switzerland
• Refreshable and ginger spiced beer
• Popular in Britain and
Commonwealth, but almost
unknown in Switzerland
• Fentimans botanically brewed
beverages since1905, but has a low
market presence in Switzerland
Ginger beer and Fentimans
Relatively new product that is faced
with potential growth opportunities
Only 13% special beers in
Switzerland
Changing consumer trends
Demand for innovation and
variation / craft beers
Low entry barriers for new beer
manufactures and favourable
Swiss franc for imports
2. SUPPLY CHAIN FLOW

Breweries fermentation and brewing of beer Bottle producers Packaging into beer bottles Farmers Ingredients (ginger, water, sugar, yeast)
Sup	pliers

 

Retailers (Grocery / Convenience / Specialised) Distribution to consumer for home consumption Food services (Restaurants / Bars & pubs / Takeaway / Event & leisure / Institutional) Dining out consumption

Consumers
Drinking
Social aspect
Wholesalers
Transportation
Geographical
distribution
Information flow
Product flow
Buyers
Bonney et al. 2009; Feller et al. 2006; Kotler & Keller 2012; Spencer & Kneebone 2007
2. SUPPLY CHAIN FLOW

Breweries fermentation and brewing of beer Bottle producers Packaging into beer bottles Farmers Ingredients (ginger, water, sugar, yeast)
Sup	pliers

 

Retailers (Grocery / Convenience / Specialised) Distribution to consumer for home consumption Food services (Restaurants / Bars & pubs / Takeaway / Event & leisure / Institutional) Dining out consumption

Consumers
Drinking
Social aspect
Wholesalers
Transportation
Geographical
distribution
Relationship flow
Buyers
Kotler & Keller 2012; Soosay et al. 2012; Spencer & Kneebone 2007
Suppliers
(Farmers and bottle producers)
• Growing and harvesting of ingredients
• Creating bottles out of the raw materials
• Ginger root esp. from tropical countries
(Fentimans supplies from China)
• Fragmented and primarily small businesses
Breweries / Fentimans
• Mixture and heating of the ingredients
• Fermenting, maturating and diluting
of the ginger beer
• Botanically brewed beverages
• Over 100 years of experience
• Creation of value beyond the product
• Marketing and promotion of the
ginger beer
Wholesalers / KVT
• Distribution and coordination of
ginger beer within a country
• Intermediate between breweries
and buyers with market insights
• KVT as specialized supplier of
niche products
• Trend for traceability
3. EVALUATION OF THE SUPPLY CHAIN / ROLES
• Water waste in agriculture
• Difficulty to attract and retain staff
• Missing story behind the product
✓ Ingredients quality, safety and
freshness for a good end product
✓ Ecological an ethical production
• Low reputation of ginger beer and
Fentimans in the Swiss market
• Water waste during production
• Limited backward flow of information
• Inefficient logistics (lower volume and
geographical characteristics)
✓ Good quality and taste of
the end product
✓ Emotional aspect (Company story)
✓ Increased choice for end customer
✓ Accessibility and convenience
for consumers
Consumer
value
(billion €)
Purchases by supply sector beer
Anon 2013; Bundaberg Brewed Drinks 2016; Cooper 2012; Culp 2012; Fentimans 2017; Hepler 2015; KVT 2017; ingwerbier.ch 2016; MarketLine 2016; The Brewers of Europe 2016; Thomson 2017
Retailers
(Grocery / Convenience / Specialised)
• Link between producers and consumers
• Distribution and accessibility of ginger beer
to consumer for home consumption
• Presentation of the products
• Fentimans is currently only online and via
beverage
distributors
available
Food services
(Restaurants / Bars & pubs /
Takeaway / Event & leisure /
Institutional)
• Link between producers and consumers
• Convenience and experience of
the dining out consumption
• Nice surrounding and
atmosphere
• Currently no existing
collaboration from Fentimans
with food services
Consumers
• Consumers as main driver in the industry
• Long tradition in consumption of
lager beer
• Changing demand towards innovative,
less-alcoholic, healthier and more
refreshable beers
• Drinking behaviour from high frequency
to a reduced amount of quality products
• Low perception of beer in the female or
athletes segment
3. EVALUATION OF THE SUPPLY CHAIN / ROLES
• Currently low accessibility due to
limited distribution channels in Switzerland
• No delivery of big data insights to breweries
✓ Accessibility, convenience and saving
of time for consumers
✓ Shopping experience and inspiration
• No existing collaboration from
Fentimans with Food services in
Switzerland
• Long lager beer tradition and relatively
unknown ginger beer in the Swiss market
• Seasonality and weather dependence
✓ Experience and convenience of
the social event
✓ Emotional aspect of social gathering
✓ Tasty, healthier and refreshable
drinking consumption
✓ Satisfy of thirst and/or social aspect
Consumer
value
Switzerland sales of
beer volume 2016
Anon 2013; Bundaberg Brewed Drinks 2016; Cooper 2012; Culp 2012; Fentimans 2017; Hepler 2015; KVT 2017; ingwerbier.ch 2016; MarketLine 2016; The Brewers of Europe 2016; Thomson 2017
3. EVALUATION OF THE SUPPLY CHAIN / SWOT

Strengths • Established flows between suppliers (farmers and bottle producers) and breweries • Long tradition and brewing expertise (100 years of company history of Fentimans) • High ingredients quality, safety and freshness for a good end product • Clear understanding of product flow within supply chain

Weaknesses • Long lager beer tradition but relatively unknown ginger beer and Fentimans in the Swiss market • lower economies of scale compared to normal beer production (different ingredients) • Currently low accessibility (limited retail channels and no existing collaboration from Fentimans with food services in Switzerland) • Limited backward flow of information from consumers and wholesalers to breweries and farmers • Low relationship and transparency, delivery of big data insights from retailers to breweries and farmers • Water waste in agriculture and in brewing

Opportunities • Spending willingness for premium products in Switzerland • Customer trends (fruit-infused, less-alcoholic, healthier and more refreshable beers) • New target segments such as women or athletes • Digitalisation (automatization, big data usage, easier exchange / relationship within the supply chain, traceability) • Potential backward integration / combination in the supply chain to reduce market players

Threats • Mature market and changing consumer trends • Handling of the dynamic, more complex market • Increased margin pressure and threats of selfishness within the supply chain • Changes in government regulations (food safety, laws etc.) • Weather dependency and seasonality of farming and consumption

Anon 2013; Bundaberg Brewed Drinks 2016; Cooper 2012; Culp 2012; Fentimans 2017; Hepler 2015; KVT 2017; ingwerbier.ch 2016; MarketLine 2016; The Brewers of Europe 2016; Thomson 2017
3. EVALUATION OF THE SUPPLY CHAIN / KEY ISSUES
Increase accessibility to consumers through new distribution channels
Creation of ginger beer awareness and
establishment of Fentimans brand recognition in Switzerland
Understanding consumers and their changing demands
Leverage power and engage in the supply chain
(collaboration / trust / openness / integrity / respect)
Usage of digitalisation and traceability through the whole value chain
Reduction of waste and inefficiencies within the supply chain

Education of Swiss about ginger beer

• Barkeeper and waiter as market insider / promotors • Beer sampling and events • Social media • Emphasise long history of ginger beer • Healthier and low-alcoholic alternative for women

 

Marketing and promotion

• Market presence • Point of sales promotion • Online inspiration & recipes • Promotion material

 

Consumer involvement in innovation process

• Open innovation • Close customer contact • University case studies by students • Direct interaction on social media • Company visits

 

Packaging and convenience

• Functional packaging and convenience: cold beer to go or re-usable packaging (shaker for cocktails) • Sensory marketing: people buy beer with their eyes f.e. nice beer glass

 

Creation of ginger beer awareness and establishment of Fentimans brand recognition in Switzerland

Create 4. SUPPLY CHAIN STRATEGY / RECOMMENDATIONS
Create Understanding customer and their changing demands
Chan & Mauborgne 2015; Farmer 2013; Kotler & Keller 2012; Maxwell 2017; Nagard & Reniou 2013; Passport 2016; Passport 2017b; Sensory

Expansion of distribution channels

• Shelf space at Swiss retailer “Coop” and “Manor” • “Coop to go” and online shopping platform to access convenience shopper

 

Cooperation with pubs and restaurants

• Increased accessibility • Positive experience and emotions • Increasing brand awareness • Word of mouth and personal recommendations

 

Big data insights

• Transparency through direct information exchange • Sales and supply chain adjustments on demand • Trends forecasting • Professional claim management

 

Traceability packaging

• QR code • consumer marketing, transparency & reduction of information lack • Improvement within the value chain

 

Increase accessibility to consumers through new distribution channels

Raise
4. SUPPLY CHAIN STRATEGY / RECOMMENDATIONS
Usage of digitalisation and traceability
Raise through the whole value chain
Chan & Mauborgne 2015; Fernie & Sparks 2014; GfK 2015; Kotler & Keller 2012

Vertical integration production

• Transfer / integration of farmer function to breweries role • Growing and harvesting of ginger by Fentimans • Creation of missing story behind the product

 

Direct contact and product flow to end consumer

• Skip Wholesaler and in some cases even the retailers as intermediaries • Distribution via own online shop • Direct sales at events, festivals and to student organisations • Closer contact and effective interaction

 

Engage in supply chain

• Reduction of uncertainty • Optimised processes, info flow and collaboration within the chain • Category management

 

Smaller packaging

• Smaller portions to target new consumers (women drink less than men) • Reduced ginger beer volume as part of cocktails • PET packaging for easy handling and take-away • Minimising space and rising single households

 

Reduction of waste and inefficiencies within the supply chain

Eliminate
4. SUPPLY CHAIN STRATEGY / RECOMMENDATIONS
Leverage power and engage in supply chain
Reduce (collaboration / trust / openness / integrity / respect)
Chan & Mauborgne 2015; Farmer 2013; Gates et al. 2016; Kotler & Keller 2012; Passport 2016; Passport 2017b; Rutishauser, Rickert & Sänger 2015; Taylor 2005
5. SUPPLY CHAIN STRATEGY / CONCLUSION
Only through integrated supply chain
management value can be created for
the consumer and enhanced marketing
performance for the whole chain.
Consumer as
key driver
Engage in
supply chain
Value added
for the whole
supply chain
Criteria for measuring success

•	Management information system / KPI (market volume, market share, revenue, profit)

• Number of partners and intensity of relationship
• Market research and customer feedback
• Analysing of big data and CRM data
• Revision of supply chain mapping or benchmarking
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Bonney, L, Clark, R, Collins, R, Dent, B, & Fearne, A 2009, Sustainable value chain analysis: An agri-food chain diagnostic, University of Tasmania, Kent Business School, and The University of
Queensland, Australia.
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Chan, KW & Mauborgne, R 2015, Blue ocean strategy: how to create uncontested market space and make the competition irrelevant, Harvard Business Review Press, Boston.
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REFERENCES
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REFERENCES

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