Product details

MBC has been in business in Northern California for 15 years as the first legal craft microbrewer of speciality beers for over-the-counter and retail sales. By 1996, MBC was nearly a $4 million company, but it was joined by nearly 1,000 competitors in its speciality microbrewed beer niche. This niche market attracted attention from larger and publicly owned competitors, including large integrated national brewers. Consolidation was occuring via alliances between smaller microbrewers and acquisitions by large integrated brewers. Eventually, price competition to gain retail shelf space was expected to increase. Meanwhile, MBC planned to quadruple its current brewing capacity to 50,000 barrels, with room for expansion up to 200,000 barrels. A successful direct public offering of stock provided about half of the needed funds for the expansion; the remainder was to be supplied by borrowing and internally generated cash flow. The capacity expansion project was delayed due to cost overruns, setbacks in the permitting process, and bad weather. The founding venture team faced the tradeoffs of remaining small and serving a regional market or growing larger to compete in the mass market. The effects of expansion on MBC''s people, activities, and systems were unknown.