5 - From drinking beer to experiencing beer: the British beer market and the Castle Rock Brewery case

Abstract

The fate of successful brewing businesses is intertwined with the effectiveness of its distribution channels. In the United Kingdom, trade markets are concentrated on forcing breweries to be price takers. Moreover, market inefficiencies such as the presence of the “tie” in the pub industry lock-in retailers with specific wholesalers, limiting the choice of beer they can carry. In recent years, significant environmental changes have affected the decline in the pub industry, while the beer industry is experiencing a revival because of the emergence of new craft brewers. In these conditions, breweries increasingly consider downward vertical integration for preserving distribution outlets. This chapter explores the case of Castle Rock Brewery, a company that has successfully integrated excellent brewing with effective management of a pub estate. The case exhibits how a brewing company can combine resources and competences from the two industries to generate dynamic capabilities for competing successfully in an ever-changing environment. Anticipation of trends, continuous reinvention, customers education, and community engagement emerge as core dynamic capabilities that can inspire the integration strategies of emerging breweries.