Although beer may be the beverage of choice for most 20 somethings, for 28-year-old Geoff Dillon, his drink of choice would likely be whisky. Dillon grew up watching his dad, an environmental chemist with a passion for fine spirits and an extensive whisky collection, experiment with ingredients in the kitchen, applying his scientific knowledge to the creation of new food and drink recipes including beer and wine making. After graduating from university with a double major degree in Biology and Economics, Dillon decided to pursue his own interest in spirits, travelling across the U.K. and the United States to learn more about the fine art of distilling. During his travels Dillon realized that the craft distilling was growing in popularity in North America, and in particular in the U.S., which gave him the confidence to consider pursuing his interest in this unique industry. Eventually Dillon returned to his roots in Canada and decided it was time to take his concept of a craft distillery and make it a reality. With the help of his fatherwho assumed the role of head of R&D, and his father-in-law, a Toronto entrepreneur who knew a thing or two about developing a business, Dillon took his dream of opening a craft distillery and made it a reality. Dillon's Small Batch Distillers was launched in 2012, producing rye whisky, gin, vodka, and bitters using local ingredients from the Niagara Region, one batch at a time. In addition to their unique un-aged White Rye whisky, in 2015 Dillon's plans to offer what hasnt been seen in Canada in a very long time, a whisky made of 100 percent rye grainnot a blend which is what most Canadian distillers tend to produce, and aged three years to meet the legal cask-aging requirement. For Dillon, the Niagara region is a great location due to its proximity to the well-established wine and fruit industries in Ontario. Dillon's vodka, gins, and bitters are made from a base of 100 percent Niagara grapes and infused with natural botanicals and local fruits, creating unique flavours and products. For Dillon it's all about the unexpected. We want people to come into the distillery and see something they have never seen before. We want to make interesting, unique, small batch products that you cant find anywhere else. We take fresh, local fruit and grain, and turn them into spirits. Not many distillers do that anymore in Canada. We feel with every product we make we are bringing something new to the table. In terms of distribution, Dillon's has managed to make some valuable contacts and establish relationships in what is a highly competitive market. Dillon's gin and rye are sold through the Liquor Control Board of Ontario (LCBO), as well as select licensed establishments throughout Ontario. Williams-Sonoma, the upscale specialty kitchen and housewares retailer carries Dillon's bitters in their North American stores as well as on their website. Dillon's also sells direct to customers using their Distillery itself as a draw, offering visitors a chance to sample their line in their Sipping Room, a rustic venue reminiscent of an old apothecary filled with natural light, wood, exposed copper pipes, and decorated with barrels, lemons, limes, and juniper branches. Building brand awareness and a strong brand image is an important focus for Dillon's, however, as a small business they are always looking for the most cost effective methods and tools to employ when it comes to marketing expenditures. Dillon's has adopted a low-budget grass roots approach to marketing, relying on social media to get the word out about their brand and products through Facebook, Twitter, and Instagram as well as blog posts on their website featuring recipes, news, and even announcements. In addition, the company focuses on special events at the Distillery like Brunch Truck Sundays, where local food trucks come to offer a new spin on the classic Sunday meal, and Oyster Fest Niagara, a partnership with The Tide & Wine Oyster Company that included live music, an oyster shucking competition, and the chance to sample Dillon's custom designed cocktails as well as local wines and brews. Although Dillon's has experienced some initial success and helped pave the way somewhat for other craft distillers, the company is still young and the industry is not an easy one to succeed in. Ontario has some of the strictest regulations in North America when it comes to the sale of alcohol and selling through a closed system like the LCBO can be a challenge for craft distillers, which typically have much lower margins than wine and beer sellers. Selling outside of the LCBO stores, however, does not solve the problem for distillers. Whereas wineries can sell direct to customers from their wine stores and retain all the profits, distillers who want to sell direct to customers must act as LCBO agents, including LCBO's markup in their retail selling price (which is dictated by the Alcohol and Gaming Commission of Ontario), plus federal excise taxes and freight costs. This squeezes profit margins substantially and makes it difficult for craft distillers to compete with other alcohol sellers. Dillon, along with two other Ontario distillers has even gone so far as to petition the government to ask that regulations be reformed and updated to reflect the changing business environment.

Do not answer the questions at the end of the case, your assignment will be the following: Complete a PESTEL Analysis of the Craft Distiller Industry in Ontario and identify the five most significant external factors pressuring the industry. Complete a Porters Forces of the above industry rating each force a Weak, Moderate, Strong or Very Strong Force. Identify the strongest forces in the Ontario Craft Distiller Industry. What are the key success factors in the Ontario Craft Distiller Industry (list 5). The case provides general information about Dillons Small Batch Distillers but will require you to do external research on this industry. You have been hired as a consultant to advise Dillons as they look to develop a business strategy. Complete the analysis in present day (2023). Grading: (50 points) PESTEL ANALYSIS and Dominant Economic Features 10 points Summary/Assessment of Macro Environment 5 points Porters Forces Analysis 10 points Summary of Dominant Forces and Industry Attractiveness 5 points Identify five Key Success Factors for the industry and explain why they are important 10 points APA and demonstrated Research 10 points