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BEAU’S ALL NATURAL BREWING COMPANY: CRAFTING INTERNATIONAL OPPORTUNITIES Professor Neil Maltby, Dwayne Mortimer, Duncan Pernal, Travis Radtke, and Alexander Weave wrote this case solely to provide material for class discussion. The authors do not intend to illustrate either effective or ineffective handling of a managerial situation. The authors may have disguised certain names and other identifying information to protect confidentiality. This publication may not be transmitted, photocopied, digitized, or otherwise reproduced in any form or by any means without the permission of the copyright holder. Reproduction of this material is not covered under authorization by any reproduction rights organization. To order copies or request permission to reproduce materials, contact Ivey Publishing, Ivey Business School, Western University, London, Ontario, Canada, N6G 0N1; (t) 519.661.3208; (e) [email protected]; www.iveycases.com. Our goal is to publish materials of the highest quality; submit any errata to [email protected]. i1v2e5y5pubs Copyright © 2020, Ivey Business School Foundation Version: 2020-05-25

It was June 2019, and Mike Simpkin was out walking his dog as he considered his next steps at work. Simpkin had been hired as the export manager, a newly created position, for Beau’s All Natural Brewing Company (Beau’s). Following the successful launch of Beau’s in all 10 Canadian provinces, the craft brewer had its sights set on the next step forward—international markets. The brewery wanted to distribute Beau’s internationally, and agents from numerous distribution agencies had contacted Simpkin about the United States and Europe. Simpkin was also considering Asian markets as an opportunity to get in on the ground floor of an emerging market. In Simpkin’s view, this market was less congested than the competitive European and American craft markets. While market selection was an important question, Simpkin wondered how he might pursue international growth as a viable strategic option for a craft brewer. Did exporting craft beer make sense? As Beau’s was Canada’s largest producer of organic craft beer,1 Simpkin knew he had to determine the strategic fit for the brewer’s growth aspirations before he met with prospective agents. CRAFT BEER IN CANADA Beer was a popular drink in Canada. According to industry association Beer Canada, each year Canadians drank, on average, about 75 litres of beer. However, beer sales had dropped over the five years leading up to 2018per capita consumption had declined from 80.9 litres in 2013. Even so, from 2012 to 2017, the number of brewers had grown by almost 1,000 new breweries. 2017 was a break-out year for Canadian breweries, as the brewing facilities per 100,000 eligible adult drinkers had increased since the previous year from 2.4 to 2.8.2 One outcome of the growth in the number of craft brewers, though, was the concern that Canada was approaching “peak” beer. With each new entrant came 10–20 new beers, leading some in the industry to conclude that market saturation was inevitable.3 Another challenge in the Canadian craft beer market was the perception of inter-provincial trade barriers. Responsibility for the regulation and distribution of alcohol was held by each province. In its publication “A Report Identifying Interprovincial Trade Barriers in the Canadian Beer Industry,” Beer Canada identified up to four types of trade barriers in each province, including distribution, charges and costs of service, access to points of sale, and pricing.4 These barriers made distributing craft beer outside of its home province challenging. One of the companies leading the craft beer industry was Beau’s.

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Page 2 * BEAU’S ALL NATURAL BREWING COMPANY Beau’s was a Canadian craft brewery founded on July 1, 2006, in the town of Vankleek Hill, Ontario. The company created a premium organic beer, the first all-natural beer in its region. Beau’s had several distinct aspects that helped drive its strong presence in the craft brewery industry from the start. Beau’s co-founders were a father and son duo, Tim and Steve Beauchesne. Tim served as president, while his son Steve was the chief executive officer. Tim had previously run a textile company in Vankleek Hill before shutting it down as a result of the industry having shifted overseas. Steve attributed Beau’s success to his father’s strong business ethics background. The brewery was family-run, but in 2016, the Beauchesnes transferred its ownership to its employees. The family wanted their employees to be stewards of the brewery’s future. Thus, Beau’s was a family-run, employee-owned, and completely independent brewery. Independence from big brewers was important to Beau’s, as it “keeps our minds free to innovate, our hands free to craft, and hearts free to care. The beer we create and the choices we make are authentic, inspired by real people who work here, and who love craft beer just like you.”5 Beau’s beer was certified organic by Pro-Cert. It was made with 100-per-cent organic malt and hops, as well as local spring water. Organic production was part of the company’s commitment to sustainable practices, which also included, when possible, local sourcing. Further, the company believed it was the first brewer to obtain Benefit Corporation (B-Corp) status, “a third-party certification of businesses that prioritize social responsibility.”6 Beau’s flagship beer was the multiple award-winning Lug-Tread, and it continued to be its best-selling beer. Lug-Tread was a combination of ale and lager, which gave it a crisp, balanced, and refreshing taste. Until 2017, Lug-Tread was the only beer Beau’s produced annually, as other beers were seasonal. It added a second beer, to be produced annually in May 2017, which was called Full Time I.P.A. and was described as hoppy, fruity, and bold. Lug-Tread prospered as Beau’s flagship beer, but the brewer also rotated through 50 craft brews produced seasonally (see Exhibit 1). For the first few years of operations, Lug-Tread was only available for retail in large bottles at the brewery. By 2015, Beau’s had become the largest independent craft producer of organic beer in Canada.7 It earned more than 80 awards related to brewing, sustainability, and business practices. Beau’s experienced rapid growth at a compounding rate of 45 per cent year over year, and employed approximately 160 full-time staff who were typically family or friends of the Beauchesnes.8 GROWTH AND CHANGE AT BEAU’S In 2016, the company changed its practice of local-only sales within a day’s drive of its brewery. It expanded beyond distribution in Ontario and Quebec, eventually entering the rest of the Canadian provinces. The Beauchesnes felt a growing concern about the beer environment in Canada and the influence of large breweries such as Labatt Brewing Company Limited, Molson Brewery, and Sleeman Breweries. Co-founder Steve Beauchesne spoke about the company’s decision to expand nationwide:

With the recent and sudden acquisitions that the “hyper-mega” breweries have made of strong Canadian craft breweries, we became quite concerned that with only a small handful of national independent craft breweries, the whole industry is at risk of being commoditized. Our commitment to staying regional made us part of the problem. We’ve made this expansion to make sure that there are strong voices on a national level for craft beer in this country.9

Beau’s rolled out its beers in Prince Edward Island and New Brunswick with the help of agents in Eastern Canada, and in Manitoba, Alberta, and British Columbia with the help of agents in Western Canada. By

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Page 3 * 2018, Beau’s was in all Canadian provinces, though Ontario and Quebec remained its biggest projections for financial growth.10 In May 2016, the company announced that it was going to remain independent through an employee stock ownership plan (ESOP). Steve, along with his father Tim and his siblings, owned 57 per cent of the company. Family and friends, who were either early employees or initial investors, owned the rest. The ESOP was to be implemented over a time frame of 20–25 years, during which time the company’s more than 150 employees would be given annual opportunities to purchase shares of the brewery. The Beauchesnes called it a “succession plan” to leave the business in employee hands when each founder exited the business. Beau’s shareholders put up shares for sale each year to make them available to employees for purchase.11 Another part of Beau’s growth was distribution in the United States. Exporting beer was a major change for the company, as it opened up new opportunities for growth. In March 2014, Beau’s signed a distribution deal with Remarkable Liquids, a state-wide, craft-only distribution company based in New York State. It helped sell Lug-Tread as well as The Tom Green Beer, which was a milk stout that was designed in partnership with Canadian actor Tom Green.12 New York State was within an hour’s drive of the brewery, which allowed Beau’s to remain a local brewery. In May 2017, the brewery also began distributing the new beer Full Time I.P.A., which was made available in New York State. Speaking about the experience in the United States, Simpkin noted:

We are still exporting to NY [New York] and NJ [New Jersey] and overall it’s been a success in the sense that we’re still continuing organic growth out there. I think the learning experience we have from NY sales is how important it is to do your research on the agent you’re looking at entry with. We were lucky that ours is established and has a good distribution chain, but for a new brewery, if your international agent drops the ball, it has far greater ramifications than a local/inter- provincial one.

INTERNATIONAL OPPORTUNITIES AND CRAFT BEER The global market for beer in 2019 was expected to reach US$591.6 billion,13 with about $80.28 generated per person from an average consumption per capita of 25.7 litres. Forecasts suggested the average revenue per person would rise to $89.39 by 2023.14 In terms of looking ahead, Beau’s was considering growth in the United States, Europe, and China. The United States The United States seemed like a logical choice for the company to continue its expansion: the border was less than an hour’s drive from Beau’s production facilities, the United States was already a key trade partner with Canada, and Americans loved their beer. More than 90 per cent of all beer exported from Canada went to the United States.15 Beau’s already had some experience south of the border, the market was large and well developed, and craft beer held 12.7 per cent of the market share in America.16 While the beer sector was down overall by 1.2 per cent, and per capita consumption of beer had dropped from about 76 litres to 74 litres, craft beer sales were up by 5 per cent. In 2017 alone, consumers in the country purchased over $26 billion worth of craft beer, and growth of the market had been consistently at or over 15 per cent per year for the last five years. This continued growth in overall market share in the beer market meant that more and more people were choosing craft beer over other options. Out of the Top 50 selling beer companies, 40 were craft brewers.17

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Page 4 * A notable feature of alcohol distribution in the United States was that each state had an independent regulations board, meaning each state required its own distribution approval process. This made exporting to multiple states an administrative challenge, though Simpkin expected his distribution agents would address the import challenges while Beau’s would have to manage things like Canadian export declaration, labelling, packaging, and shipping. The ideal targets for Beau’s would be the northeastern United States, as these states would have the lowest transportation costs and likely an affinity for Canadian products. Beau’s already had a presence in the state of New York, although it was just a few stores in a very small area. Indicative of the opportunities in the United States, New York was a relatively large market, Massachusetts was a medium-sized market, and Rhode Island was a small market. With a population of nearly 20,000,000 people, New York State was one of the biggest markets for beer in the United States. It was fourth in the country in terms of number of brewers, with 386 established craft breweries operating in the state, and sixth in terms of production at about 1,270,000 barrels.18 Simpkin noted, however, that the state ranked 26th in the country for brewers per capita, with 2.6 breweries per capita. One drawback to exporting to New York, according to Simpkin, was the distance between cities and towns. Buffalo, Rochester, Syracuse, Albany, and New York City were spread out around the state, meaning a more concentrated penetration effort would not be an easy feat. Also under consideration was the medium-sized market in Massachusetts. Massachusetts had a growing population of 6.8 million people, 155 craft breweries, and only 2.9 breweries per 100,000 drinking-age adults, for a ranking of 29th in the country in terms of brewers per capita. The major metropolitan area of Boston was a large population in a small area, allowing for easier setup of distribution. Massachusetts produced about 630,000 barrels of craft beer in 2018, ranking 13th in the United States.19 Rhode Island was another option under consideration by Beau’s. With a population of just over a million, Rhode Island had only 26 craft breweries by the end of 2018 but 3.2 breweries per 100,000 drinking-age adults. With the majority of the population centered around the state capital of Providence, distribution would be easier there than in New York or Massachusetts.20 In any of the states, craft beer was well established and beer consumers had a fairly high level of awareness. Beau’s felt that besides regulatory challenges, the biggest drawback to working in the United States was the high level of competition. An alternative to exporting to the United States was exporting to the European and Asian markets. Europe and Asia Europeans had a well-established love for beer. Germany, the United Kingdom, and Spain were the biggest markets for beer in Europe. Per capita consumption of beer in Germany (93.6 litres) far exceeded that of consumption in Canada and the United States, while countries like Spain (84 litres) and the United Kingdom (70 litres) had less per capita consumption. European countries had long traditions involving beer dating back centuries, and many of these traditions had influenced the founding of North American breweries and inspired the more recent craft beer revolution. Still, North American craft beer had garnered interest among Europeans and had led to export opportunities. In part, these opportunities had emerged from the strong growth rate of craft beer in Europe, and some projections estimated an 11 per cent compound annual growth rate (CAGR) through to 2021.21 Furthermore, while the beer industry was well established, rapid consumer changes and interest in American-style craft beer suggested opportunities. And, while large brewers had well consolidated positions, the craft sector was relatively fragmented. Capitalizing on this, the Brewers Association of the United States commenced export programs to support American brewery exporters.

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Page 5 * The final option under consideration for Beau’s was the Asian market. With the largest population concentration in the world, the Asian market was huge. The largest country of interest was China, with over 1.3 billion people. The Chinese beer market had remained stagnant for the past few years, with its per capita consumption around 30 litres. However, combined with the large population, China generated the largest beer market in the world at over 40 billion litres, which was more than the United States. The industry was dominated by five large Chinese brewers, with about 75 per cent of the market. Competition with other craft breweries was small in the Chinese market, as the number of microbreweries and brewpubs in all of China totalled about 80 in 2017. Craft beer, especially lagers, was attractive to young, urban consumers in Tier 1 cities such as Beijing and Shanghai. However, consumers had little experience with craft beer and required extensive education about exotic flavours and organic production.22 Thus, while it was a large and relatively untapped market, China would require a lot of marketing about the nature of craft beer itself. Also, the administrative challenges around distributing beer in China could be quite prohibitive.23 Choosing which market to enter was one of the decisions Simpkin was contemplating, but he knew that a good agent should be able to provide market evaluation support (see Exhibit 2). Thus, he was more focused on the strategic fit of Beau’s offering with the target market. THE INTERNATIONAL DILEMMA One question that naturally arose about the internationalization of craft beers had to do with strategy. The Brewers Association of the United States certified brewers as “craft” if they were small, independent brewers of beer that tended to use traditional or innovative recipes. Although all beers had the same four base ingredients of grain, hops, yeast, and water, a craft beer was artisanally created in smaller quantities to capture complex aromas, flavours, and colours. In comparison to large-scale brewers, then, craft brewers were differentiated in terms of the products they produced and how they produced them. They also differed from large-scale brewers in terms of their beer names and the stories associated with them, which were often derived from and important to local communities.24 However, with the growth in the number of brewers in Canada, there may have been some erosion in the craft differentiation. For Beau’s, though, differentiation was also derived from its certified organic process and products, its sustainable practices, and its B-Corp status. Another aspect of craft beer strategy was local distribution. Typically, craft brewers distributed beer within local geographic markets, often within 160 kilometres.25 Thus, it was generally agreed that craft beer was a product that benefited from a niche strategy of focused differentiation.26 Given the geographic focus of many craft brewers, Simpkin had to address the following question: Why internationalize beyond its local market? Did Beau’s organic offering provide points of differentiation that offset the local geographic focus? If it pursued international markets, which ones fit best with Beau’s? Simpkin would also have to determine the best method for internationalizing. In general, if trade barriers were low and the value-to-weight ratio was high, exporting products had advantages.27 In theory, exporting could be a fast and easy way to grow sales. It provided diversification from the home market and it was relatively low risk in terms of resource commitment. However, there were aspects of the craft beer industry that made exporting a challenge. In terms of trade barriers, there were generally few policies that impeded the shipment of beer across borders. However, Simpkin knew Beau’s would still be required to declare exports, modify labels and packaging, and deal with some shipping issues. As he pointed out,

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Page 6 *

There are some challenges to exporting to a different country in general, specifically with the labeling. Being that the United States has different units of measurement, our Canadian labels do not cover the requirements. This leads to a big cost in bottle labels, but an even larger cost in canning (wrapped or printed) because the lid also has specifications. This means that we have to choose what we want to send down [to the United States] and try to focus on sales growth in that/those specific brand(s). It also doesn’t make sense to make these products a-la-carte, so we order a large quantity of these labels/cans and store them, which in turn adds warehouse costs.

Shipping internationally also presented some challenges for craft beer. In general, beer did not have an attractive value-to-weight ratio. Transportation costs resulted from many factors, including the mode of shipment, storage, handling, and administration; however, the weight of the product was a key factor. Beer had a low value-to-weight ratio, which meant it would generally be shipped internationally by low-cost sea freight, as air freight could be up to six times more expensive than ocean freight.28 Simpkin also had to investigate how to keep the beer fresh over the long trip across the ocean and whether the premium pricing of craft beer could support faster air freight. He knew of several British Columbia craft brewers that were exporting to Asia. Mission Springs, for example, shipped 2,000–4,000 litres a month to Korea using recyclable plastic kegs that were cheaper and lighter than traditional metal kegs.29 Even so, as an organic, sustainable brewer, Beau’s had to consider whether shipping long distances fit with the brewery’s sustainable positioning. As an alternative to exporting, Simpkin could investigate licensing Beau’s beer recipes to foreign partner brewers. Licensing would overcome the value-to-weight limitations of exporting; however, it was dependent on finding low-risk partners. Several craft breweries, including Mikkeller from Copenhagen, Denmark, and Collective Arts Brewing from Hamilton, Ontario, used forms of co-operation to internationalize. However, there were questions and concerns about the risks of sharing Beau’s intellectual property. While exporting and licensing offered relatively fast internationalization options, Simpkin also knew that direct investment was an option. In fact, several Canadian breweries served foreign markets by producing in them. This presented significant resource demands, the challenge of foreign operations, and, arguably, much greater risk. It also represented a scale of entry that was far beyond what Beau’s had thus far contemplated. CONCLUSION Craft brewers had only recently begun undertaking export, and it was not clear to Simpkin whether it was motivated by profitable opportunities or necessitated by competitive congestion in their local markets. With the increased number of craft brewers in Canada, there were growing concerns that the industry had reached “peak beer.” Coupled with the declining per capita consumption rates, beer markets in Canada might have been approaching saturation. Moves by the Government of Ontario to open up grocery and convenience stores could offer growth channels, but the impact of the changes was yet to be seen.30 Each international market presented different potential advantages: the geographically close US market, with its similar beer preferences; the beer lovers of Europe, with their strong beer culture and history; and the potential for market growth in Asia. As Simpkin reflected on the opportunities, he wondered whether the distinctive branding of Beau’s as an employee-owned organic craft brewer would carry over into export markets. While most craft brewers were focused differentiators, part of Beau’s advantage was its organic sustainability. Simpkin also wondered whether his existing market would react poorly to a “local” company selling abroad. Some craft beer consumers “punished” brewers who appeared to “sell out.”31 Not many craft brewers exported beer, and Simpkin had to consider the trade-off between growth and upholding the tradition and positioning of craft beer. As he walked through rural Vankleek Hill, he knew he had to further mull over where Beau’s should head next.

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Page 7 * EXHIBIT 1: BEAU’S ALL NATURAL BREWING COMPANY PRODUCT OVERVIEW, SUMMER 2019

Source: Company files.

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EXHIBIT 2: MARKET DATA

Canada 2015 2016 2017 2018 2019 Proj 2023 Proj. Beer consumption (volume, L) 2,729,200,000 2,724,200,000 2,714,200,000 2,712,100,000 2,711,200,000 2,717,500,000 Beer consumption (value, USD) 11,755,000,000 12,040,000,000 12,307,000,000 12,526,000,000 12,777,000,000 13,819,000,000 Consumption per capita (L) 75.80 74.90 73.90 73.20 72.50 70.20 Average revenue per person $326.30 $330.93 $335.05 $337.85 $341.52 $357.04 Number of brewers 564 N/A N/A 995 N/A N/A Number of craft brewers (estimate) 525 N/A N/A 925 N/A N/A United States Beer consumption (volume, L) 24,432,230,000 24,415,900,000 24,302,420,000 24,224,500,000 24,148,090,000 24,199,700,000 Beer consumption (value, USD) 105,716,000,000 108,318,000,000 111,330,000,000 113,371,000,000 115,678,000,000 126,823,000,000 Consumption per capita (L) 75.30 75.60 74.80 74.00 73.40 71.90 Average revenue per person $329.46 $335.33 $342.46 $346.60 $351.54 $376.69 Craft beer consumption (value, USD) 22,300,000,000 N/A N/A 27,600,000,000 N/A N/A Number of brewers 4,672 5,606 6,596 7,450 N/A N/A Number of craft brewers 4,628 5,539 6,490 7,346 N/A N/A China Beer consumption (volume, L) 44,957,560,000 44,053,200,000 43,224,670,000 42,662,000,000 42,607,220,000 44,135,900,000 Beer consumption (value, USD) 71,211,000,000 70,689,000,000 70,840,000,000 71,365,000,000 72,621,000,000 80,316,000,000 Consumption per capita (L) 31.80 30.99 30.26 29.73 29.60 30.24 Average revenue per person $50.36 $49.74 $49.60 $49.73 $50.39 $55.02 Number of craft brewers ~60 N/A N/A ~80 N/A N/A Europe Beer consumption (volume, L) 49,581,250,000 49,241,900,000 49,011,840,000 48,937,600,000 48,989,610,000 49,003,000,000 Beer consumption (Value, USD) 144,181,000,000 147,124,000,000 150,971,000,000 154,795,000,000 159,667,000,000 177,067,000,000 Consumption per capita (L) 59.10 58.52 58.03 57.80 57.80 57.60 Average revenue per person $171.89 $174.85 $178.88 $182.90 $188.22 $208.06 Total imports (volume, L)*** 504,330,000 N/A 531,440,000 N/A N/A N/A Number of brewers 8,146 N/A 10,469 N/A N/A N/A Number of craft brewers N/A N/A N/A N/A N/A N/A ***Note: The overwhelming majority of imports to EU countries are from other EU countries. Germany Beer consumption (volume, L) 7,915,100,000 7,861,600,000 7,809,300,000 7,778,800,000 7,796,300,000 7,822,300,000 Beer consumption (value, USD) 21,589,000,000 21,867,000,000 21,761,000,000 22,005,000,000 22,490,000,000 24,231,000,000 Consumption per capita (L) 96.80 95.70 94.50 93.60 93.30 93.37 Average revenue per person $263.96 $263.85 $263.26 $264.73 $269.29 $289.24 Total imports (volume, L) 669,700,000 N/A 674,600,000 N/A N/A N/A Number of brewers 1,388 N/A 1,492 N/A N/A N/A Number of craft brewers 723 N/A 824 N/A N/A N/A

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EXHIBIT 2 (CONTINUED) United Kingdom Beer consumption (volume, L) 4,368,100,000 4,447,900,000 4,459,600,000 4,671,800,000 4,799,100,000 5,052,300,000 Beer consumption (value, USD) 23,452,000,000 23,798,000,000 24,702,000,000 25,471,000,000 26,892,000,000 31,295,000,000 Consumption per capita (L) 66.30 67.09 68.33 69.58 71.06 73.47 Average revenue per person $356.08 $358.96 $370.19 $379.36 $398.22 $455.09 Total imports (volume, L) 903,500,000 N/A 1,006,700,000 N/A N/A N/A Number of brewers 1,880 N/A 2,430 N/A N/A N/A Number of craft brewers 1,828 N/A 2,378 N/A N/A N/A Spain Beer consumption (volume, L) 3,670,900,000 3,767,000,000 3,851,800,000 3,915,100,000 3,950,000,000 4,012,600,000 Beer consumption (value, USD) 14,436,000,000 14,926,000,000 15,522,000,000 16,104,000,000 16,576,400,000 18,241,000,000 Consumption per capita (L) 78.70 80.80 82.60 83.80 84.50 86.00 Average revenue per person $309.30 $320.08 $332.74 $344.89 $354.68 $390.78 Total imports (volume, L) 482,500,000 N/A 484,600,000 N/A N/A N/A Number of brewers 427 N/A 521 N/A N/A N/A Number of craft brewers 409 N/A 502 N/A N/A N/A

Note: Proj = projected; L = litres; USD = United States dollars; EU = European Union; N/A = not applicable Source: IBIS World, “Beer: Canada,” accessed September 5, 2019, www-statista-com.libproxy.stfx.ca/outlook/10010000/108/beer/canada; Beer Canada, “National Overview,” accessed September 5, 2019, https://industry.beercanada.com/national-overview; IBIS World, “Beer: United States,” accessed September 5, 2019, www-statista- com.libproxy.stfx.ca/outlook/10010000/109/beer/united-states; Brewers Association, “National Beer Sales and Production Data,” accessed September 5, 2019, www.brewersassociation.org/statistics-and-data/national-beer-stats/; IBIS World, “Beer: China,” accessed September 5, 2019, www-statista- com.libproxy.stfx.ca/outlook/10010000/117/beer/china; Trade Market Intelligence, “Craft Beer and Cider in Mainland China and Hong Kong,” Nova Scotia Business Inc., December 2018, accessed February 1, 2019, www.nsbi.ca; IBIS World, “Beer: Europe,” accessed September 5, 2019, www-statista- com.libproxy.stfx.ca/outlook/10010000/102/beer/europe; The Brewers of Europe, “Beer Statistics 2017 Edition,” accessed September 5, 2019, https://brewersofeurope.org/uploads/mycms-files/documents/publications/2017/Statistics-201712-001.pdf; IBIS World, “Beer: Germany,” accessed Sept 5, 2019, statista- com.libproxy.stfx.ca/outlook/10010000/137/beer/germany; The Brewers of Europe, “Beer Statistics 2017 Edition,” accessed September 5, 2019, https://brewersofeurope.org/uploads/mycms-files/documents/publications/2017/Statistics-201712-001.pdf; IBIS World, “Beer: United Kingdom,” accessed September 5, 2019, www-statista-com.libproxy.stfx.ca/outlook/10010000/156/beer/united-kingdom; The Brewers of Europe, “Beer Statistics 2017 Edition,” accessed Sept 5, 2019, https://brewersofeurope.org/uploads/mycms-files/documents/publications/2017/Statistics-201712-001.pdf; IBIS World, “Beer: Spain,” accessed September 5, 2019, www- statista-com.libproxy.stfx.ca/outlook/10010000/153/beer/spain; The Brewers of Europe, “Beer Statistics 2017 Edition,” accessed Sept 5, 2019, https://brewersofeurope.org/uploads/mycms-files/documents/publications/2017/Statistics-201712-001.pdf.

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1 Jacob Serebrin, “Beau’s Brewery to Remain Independent by Selling Ownership to Employees,” The Globe and Mail, May 17, 2016, accessed November 11, 2018, www.theglobeandmail.com/report-on-business/small-business/sb-growth/beaus- brewery-to-remain-independent-by-selling-ownership-to-employees/article30046219/. 2 Beer Canada, “National Overview,” Beer Canada, 2019, accessed November 26, 2018, https://industry.beercanada.com/national-overview. 3 Aaron Saltzman, “Peak Beer? Why Some Are Worried the Craft-brewing Craze Could Flood the Market,” CBC News, December 14, 2017, accessed February 13, 2019, www.cbc.ca/news/business/beer-craftbeer-toolshed-labatt-molson- draught-sleeman-sapporo-abinbev-1.4439295. 4 Beer Canada, A Report Identifying Interprovincial Trade Barriers in the Canadian Beer Industry, January 2017, accessed February 13, 2019, https://industry.beercanada.com/sites/default/files/151125_interprovincial_trade_barriers_report_final.pdf. 5 Beau’s All Natural Brewing Company, “About Us,” accessed February 13, 2019, https://beaus.ca/about-beaus/. 6 Ibid. 7 Serebrin, op. cit.  8 Beau’s All Natural Brewing Company, “Big News Brewing at Beau’s All Natural: Canadian Craft Brewery Announces Intent to Sell,” May 16, 2016, accessed February 13, 2019, https://beaus.ca/beaus-announces-intent-sell/. 9 “Beau’s All Natural Brewing Company Begins Distribution of Craft Beer across Canada,” Cision, July 8, 2016, accessed February 13, 2019, www.newswire.ca/news-releases/beaus-all-natural-brewing-begins-distribution-of-craft-beer-across- canada-585964911.html. 10 Evelyn Harford, “Beau's Brewery to Expand Across Canada,” Ottawa Citizen, July 7, 2016, accessed November 1, 2018, https://ottawacitizen.com/news/local-news/beaus-brewery-to-expand-across-canada. 11 Serebrin, op. cit. 12 “Beau’s All Natural Launches U.S. Distribution in March with New York’s Remarkable Liquids,” Beerpulse.com, January 13, 2014, accessed February 13, 2019, https://beerpulse.com/2014/01/beaus-all-natural-launches-u-s-distribution-in-march-with- new-yorks-remarkable-liquids-2218. 13 All dollar amounts in the case are U.S. dollars. 14 “Beer Worldwide,” IBISWorld, accessed September 5, 2019, www-statista- com.libproxy.stfx.ca/outlook/10010000/100/beer/worldwide. 15 IBISWorld, “Share of Beer Exported from Canada in 2018, by Destination Country,” accessed September 5, 2019, www- statista-com.libproxy.stfx.ca/statistics/875430/export-destinations-canadian-beer/. 16 Brewers Association, “National Beer Sales & Production Data,” 2018, accessed November 14, 2018, www.brewersassociation.org/statistics/national-beer-sales-production-data/. 17 Gary Stoller, “Craft Breweries Dominate The Top 50, But Guess Which Giants Rule The Beer Market,” Forbes, March 20, 2018, accessed November 15, 2018, www.forbes.com/sites/garystoller/2018/03/20/craft-breweries-dominate-the-top-50-but- guess-which-giants-rule-the-beer-market/#28407d6cdcad. 18 The Brewers Association, “State Craft Beer Sales and Production Statistics, 2018,” 2019, accessed July 14, 2019, www.brewersassociation.org/statistics-and-data/state-craft-beer-stats. 19 Ibid. 20 Ibid. 21 Technavio, “Craft Beer Market in Europe 2017-2021,” May 2017, accessed July 17, 2019, www.technavio.com/report/craft- beer-market-in-europe?utm_source=usa1&utm_medium=bw_wk36&utm_campaign=businesswire. 22 Trade Market Intelligence, “Craft Beer and Cider in Mainland China and Hong Kong,” December 2018, accessed February 1, 2019, www.novascotiabusiness.com/sites/default/files/tmi-special-report_craftbeer-cider-china-hongkong.pdf. 23 Fan Li, Yaojiang Shi, Matthew Boswell, and Scott Rozelle, “Craft Beer in China,” Economic Perspectives on Craft Beer, eds. Christian Garavaglia and Johan Swinnen (London: Palgrave Macmillan, 2018). 24 Wes Flack, “American Microbreweries and Neolocalism: ‘Ale-ing’ for a Sense of Place,” Journal of Cultural Geography 16, no. 2 (1997): 37–53. 25 Tom Wesson and Joao Neiva de Figuieredo, “The Importance of Focus to Market Entrants: A Study of Microbrewery Performance,” The Journal of Business Venturing 16 (2001): 377403. 26 Jack Kleban and Ingeborg Nickerson, “The U.S. Craft Brew Industry,” Proceedings of the International Academy for Case Studies 18, no. 1 (2012). 27 John Daniels, Lee Radebaugh, and Daniel Sullivan, International Business: Environments and Operations 16th Edition, (London: Pearson, 2017). 28 Bianka Dettmer, Andreas Freytag, Peter Draper, “Air Cargo Beyond Trade Barriers in Africa,” Journal of Economic Integration 28, no. 1 (2014): 95138. 29 Jesara Sinclair, “B.C. Craft Beer, Gangnam Style, as Local Brewer Exports to South Korea,” CBC, November 7, 2014, accessed July 17, 2019, www.cbc.ca/news/canada/british-columbia/b-c-craft-beer-gangnam-style-as-local-brewer-exports-to- south-korea-1.2827730. 30 Tara Deschamps, “Craft Brewers Worried They will get Shut Out of Ontario Convenience Stores,” The Globe and Mail, June 16, 2019, accessed June 30, 2019, www.theglobeandmail.com/business/small-business/managing/article-craft-brewers- worry-they-will-get-shut-out-of-ontario-convenience/. 31 Justin Frake, “Selling Out: The Inauthenticity Discount in the Craft Beer Industry,” Management Science 63, no. 11 (2016): 3531–3997.

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