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Price Elasticity Analysis Paper

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Price Elasticity of Demand When the brewery must make a change in the pricing of their product they must keep in mind the behavior of consumers. Will an increase in the cost have the elasticity needed to keep the consumers buying the product? A small price increase will usually not affect the buying power of the consumer. All consumers want a great product at an even better price. As with any premium product the consumer expects to pay a little more for the product they are buying. As mentioned before, environmental factors may cause an entire crop to be destroyed. In this type of event the price of the grain may go up significantly. For the company to continue making profits they would have to increase the price of their product. Consumers expect periodic increases due to cost of living increases, cost of utilities, and cost of packaging materials. So, prices …show more content…

The growth of craft breweries continues, and they are pushing towards a goal by 2020 to reach 20 percent of the marketplace. Additional data shows there were 3,418 craft brewers out of 3,464, accounting for over 115,450 jobs. (Craft Brewer Volume Share of U.S. Beer Market Reaches Double Digits in 2014, n.d.) Market Share Boston Beer Company, aka, Sam Adams is the largest US craft brewer. With annual sales estimated to be 4.2 million barrels, and an annual revenue of $906.446 million dollars. The top competitors are Heineken, and macrobrewers, Anheuser-Busch, and Millercoors. (The Boston Beer Company Inc Competition, n.d.) Barriers to Entry Stemming back to just after prohibition was lifted, brewing laws were in the fore-front, and have continued to this day. If a craft brewer is set on setting up a brewery the first thing they must learn is patience. They will face many challenges, and may at times wonder if they are jumping through hoops to

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