One day Richard King, a shareholder and director at Capital Brewery, asked Thomas O’Guinn, professor of marketing at the University of Wisconsin-Madison Wisconsin School of Business, if his MBA students would be interested in a project on beer.
O’Guinn said yes, but not for the obvious reasons.
“I’d been using Harvard-style case studies in my brand management class because my students want real-world experience, but they weren’t ideal,” O’Guinn said. “They’re usually fictionalized to a certain degree and I was never really happy with them as a teaching tool, so when Richard asked if we wanted to work on Capital Brewery, it seemed like a great opportunity.”
An established brand with new potential
Founded in 1984, Capital Brewery is one of the oldest craft breweries in Wisconsin. The Middleton-based business specializes in German-style lagers, and its beers have won both national and international competitions.
“Capital Brewery caught on and made money, but it never really got big because it was making craft beer,” said O’Guinn. “Craft beers were a small fraction of the national beer market until about 10 years ago. Now traditional big-brewer, big-brand beer sales are declining and craft beer sales are growing significantly, which means there’s a real opportunity to capture market share.”
“Microbrews were only 4 or 5 percent of the market share, and now in the North West, it’s 25 to 30 percent,” said Scott Wiener, president of Capital Brewery. “It’s a significant portion, and we need to be prepared.”
Now Capital Brewery is in a unique position — a known brand with an established local market share and name recognition that has the potential to capture a significant portion of the growth in the craft beer market. And that’s where the Wisconsin MBA students come in.
Tapping into the craft beer market
O’Guinn agreed to use Capital Brewery as a case study in his brand management class, but on the condition that the company open up its books completely — allowing students to see financial issues and manufacturing challenges and speak to distributors without fear of reprisal.
The leaders at Capital Brewery agreed, and O’Guinn’s MBA students began to research the company and the local and national markets to identify the best strategies for growth.
Early in the semester, the MBA students visited the brewery to tour the facilities, meet the staff and gain a first-hand understanding of the business and its challenges. After that, the students broke into eight groups and developed detailed recommendations based on conversations with King and president Scott Wiener about their business plan and model.
“They came up with really relevant stuff,” King said. “They have great professional experience, presentation skills and they’re part of the largest-growing demographic for craft beers, ages 25-34.”
The proposals identified several areas of opportunity for the brewery, based on both qualitative and quantitative data about the brand.
“One group identified the real problem with the target demographic,” O’Guinn said. “When they think of the Capital Brewery brand, they think older, not particularly hip. Another group identified heat maps on store shelves where shoppers look for beer. Another group talked to the distributors, segmented all of the different markets and figured out a plan for expanding.”
Classroom projects with real-world impact
At the end of the semester, Capital Brewery not only implemented many of the ideas that the students presented, but also offered jobs to some of the MBA students from the class.
Tim Annis (MBA ’16) says that knowing that his class work was going to be used to help a local business succeed in the real world motivated him to deliver his best work possible.
“Being able to apply the principles that we learned in our brand management class to a real brand was really interesting,” Annis said. “Sitting with O’Guinn’s class, we analyzed the cultural meaning of brands, and this project fit really well into discussions about community because there is a lot of local, regional pride around craft beer and Capital Brewery specifically.”
In fact, Annis was so inspired by the project that he joined the Capital Brewery team as a consultant, advising them on strategies to expand their distribution in nearby markets and targeting the millennial market.
“Last year, the brewery was flat, and we didn’t have a lot of growth,” King said. “Since then our sales have been up, both here and in the marketplace. The students had fun, I think they learned a lot, and we learned a lot.”
“The project went really well,” O’Guinn said. “In fact, there’s a billboard on University Avenue that came out of our MBAs working with a local ad agency. So you take a class, and by the end of the semester there’s a billboard on a major street that you drive by on your way to school. That’s about as real world as you can get.”