WELLINGTON BREWERY: GROWTH DECISION IN A CROWDED BEER MARKET

In late June 2019, Brent Davies was considering various strategic options for the future of his company. Davies was the president of Wellington Brewery, a well-established craft brewery located in Guelph, Ontario, Canada.Wellington Brewery had recently completed a successful expansion of its operations. The expansion had taken place during a period of explosive growth in Canadas craft brewery industry. As part of the expansion project, the company had increased the size of its premises by1,700 square metres (18,300square feet).It had alsoupgradedits facilities with new state-of-the-art equipment for brewing, canning, and water treatment. The expansion process had successfully transitioned Wellington Brewery from a small company to a medium-sized operation. Within only a few years, the craft brewerys operations had expandedsignificantly. Among its greatest assets, Wellington Brewery acknowledged its employees,cutting-edge equipment, and productquality and consistency. In fact, the brewery sought to create consistently handcrafted beer productswith everybatch, and never took shortcuts in the brewing process. The recentlyupgraded equipment significantly increased the companys efficiency in the beer-canning processand improved quality controlof the product. These enhancements clearlysupported Wellington Brewerys overallgoal ofexpansionacross the entireOntario market. The brewery already performed exceptionally well locally. The next step wasto continue expanding beyond itsown communityand throughoutthe province.Wellington Brewery faced strong competition from other craft breweries in the province, but also from giant multinational macrobreweries. However, the companyboasteda competitive advantage over macrobreweriessimply due toits smaller scale, whichallowed the craft breweryto offermore expensive and exquisite ingredientsin its beer, such as interesting fruitsand carefullychosen additives, to brew a selection of unique-tasting,small-batch craftbeers. After completing its recentexpansion project, Wellington Breweryfaced the challenges of an unpredictable and oversaturated market. Ontarios craft brewery industrywas characterized by unexpected growth, shifting consumer preferences, and intense competition for shelf spaceat limited retail outlets.Davies urgently needed to planhis companyscontinuing expansion andensure thatWellington Breweryremainedrelevant and financially strongduring challenging times

INDUSTRY BACKGROUNDThe Beer Industry in Canada In 2018, the global beer market was worth CA$895 billion1and was expected to continue growing.2Of theestimated 25,00030,000 breweries around the world, mostproducedless than 1,000 hectolitres (hl) per year.3Beer wasCanadas most popular alcoholic beverage. In 2018, Canadian beer sales reached $20.2 billion, and were forecasted to reach $22.1 billion by2023.4The Canadian beer market was dominated bytwo multinational companiesMolson Coors Beverage Companyand Labatt BrewingCompany Limited(owned by Anheuser-Busch InBev). These two industry giants controlled50 per cent of the Canadian market, while themyriad of much smaller craft breweries together accounted for only approximatelya 9per cent share. Between 2016and 2018, Canada saw a 30per centincrease in the launchof new breweries, reachinga total of 901companies in the industry. Despite this increase, however, beer consumption in Canada remainedrelatively flat over the previous decade and dropped by 0.7 percentduring 2019.5This trend was attributed to various factors, including an increasingly health-conscious consumer base;lower drinking rates among younger customers;and growing cider, wine, and spirits industries.6Non-alcoholic beer also saw tremendous growth in 2018, with a 31per centgrowth in total volume.7The beer industry was unpredictablefor various reasons:consumption seasonality, explosive growth, changing consumer preferences (e.g., products being made sustainably), aggressive innovation from smaller breweries, and uncertain Canadian and provincial regulations. Until 2015, onlythegovernment-ownedLiquor Control Board of Ontario (LCBO)8and The Beer Store (TBS) were authorized to sell alcoholic beverages.In 2019, TBS accounted for 63percent of total beer sales in the province, which wasadecrease from 66 percent in 2018. TBS traditionally sold mainstream beerbrands,in packages of 24 bottles, whereas the LCBO offered over 28,000 alcoholic beverage products, including beer,in individual cans or small packs. The LCBO also acted as wholesaler to approximately450 grocery stores in the province. In 2019, the LCBOs sales ofbeer, wine, and cider to grocery stores grew by 60.8 percentfor atotalof$246.7 million. That same year, grocerystore salesrepresented 80 percent of its market share gain by volume. The LCBOs e-commerce channel was also steadily growing by 72per centyear-over-year, reaching $19.5 million in 2019.9The price of alcohol was regulated and consistentthroughout the province, regardless of the specific retailer.10The LCBO reported directly to Canadas Minister of Finance and provided$6.39 billionin revenue. In 2019, the LCBOtransferred $2.37 billion in dividends to the Ontario Government.11For convenience, beer distribution channels in Canada were classified into two categories: on-premisesand off-premises. On-premiseslocations, whichallowed consumers todrinkbeerdirectly,includedbarsandrestaurants. Off-premiseslocations, whichallowedconsumers topurchasebeerbut not to directly consumeit,includedthe LCBO,TBS, grocery stores, ande-commerceoutlets. In 2018, the LCBOand TBS were the mostpopular off-premisesbeer distribution channels, generating$5.0 billionin sales.On-premiseslocations such as barsandrestaurants generated$9.0 billionin beer sales.12Craft Beer The craft brewing industry,a sub-sector of the overall beer industry,offeredpremium beverage products. From 2014 to 2018, the Canadian craft beer industry experienced significant growth, almost doubling in revenue from $1.0 billion to $1.9 billion.13Although acomprehensive definition for the terms craft brewery or microbrewery was not officially established,microbreweries were understood to represent companies thatproducedless than 50,000 hl annually.14The federal government typically licensed craft breweries that produced 400,000 hl or less per year and were independently owned and operated.15For example, Brick BrewingCo. Limited (renamed Waterloo Brewing Ltd. in 2019)in Kitchener, Ontario, was a certified craft

brewery.16Mostcraft breweries in Canada produced 5,000 hl or lessper year.17Companiesthatproducedover 400,000 hl, such as the two multinational beer companies that dominated Canadas beer industry,were categorized as macrobreweries.In contrast, the Canadian craft brewing industry was highly fragmented, with hundreds of small breweries typically focusedon serving local communities, although someof the larger craft breweriescatered tothe entire province. Ontario was home to315 breweries, but onlytwo-thirds of them sold their beer in retail outlets such as theLCBO, TBS,or grocery stores.18Craft beer consumers, whosetastes changedrapidly,were mainlyinterested in the experience, locality, and the variety of products that craft breweriesoffered. In contrast to macrobrewery customers, theseconsumersalso tended to haveless brand loyalty andto prefer ale tolager.19Sales of ale,the most consumed craft beer,grew from $905.2 million in 2014 to $1.7 billion in 2018.20Emerging and alternative trends in the industryincluded canned nitrogenatedbeer21and non-alcoholic beer.Despite environmental uncertainty and regulatory constraints affecting the entireindustry, the Canadian craft beer industry continued to grow. Reasons for growth includedchanging demographics, consumer preferences for unique products and newexperiences, and overall support from vital retail partners.22Specifically in Canada, the growth of the craft beer industry was influenced by the countrys generally favourable demographic, social, political, economic, and environmental characteristics (see Exhibit 1).BRENT DAVIES, WELLINGTON BREWERYS PRESIDENTWellington Brewery earned$10 million in revenues in 2019.23It was one of Canadas oldest and largest independently owned craft breweries.24The brewery was initially known for its darker craft beers, which wereoffered throughout Canadas most populated province, Ontario. Davies started working at Wellington Brewery in 1995 but left the company in 2000to pursue a careerin the chemical industry. However, in 2010, Daviesreturned to Wellington Breweryas partner and vice-president, with responsibilities in the companyssales and marketingdivisions. In 2016, Davies was appointed president. At the time, heowned 60per centof the brewery and held 90per centvoting rights. The remaining controlof the company was spread amongsmall investors with limited voting rights.In addition tohiscloseaffinity withthe business, Davies had a passion for beer and a deep understanding of consumer choices. During his interactions with customers at the LCBO stores, he would often ask people why they chose a specific product. He was proud of Wellington Brewerys award-winning beers and sought to expand peoples palette with high-quality tasting products. As the brewery expanded, Davies knew that upcoming decisions were critical. He believed that any decisions about the business strategy and long-term vision would need to respect,yet help evolve,the companys culture. COMPANY BACKGROUND Wellington Brewerys expansion in 201516 increased the organizations annual brewing capacity from 24,000 hl to 80,000 hl. In addition to state-of-the-art brewing equipment upgrades, the company purchased a second building to make room for offices and inventory, a new canning line to increase efficiency, and an enterprise resource planning (ERP) system. The company also installed a complete water treatment system to improve the longevity of the equipment and to reduce water usage and waste. As of 2019, the brewery employed 45 staff, including full-time and part-time positions, depending on the seasonality of the business. Wellington Brewerys respect andpride in itsemployees was reflected by the companysimpressive retention rate. For example, the brewerys vice-presidents offinance, sales, and brewing had been with the company for an average of 16 years. Its experienced staff helpedWellington Brewery master the challenging product submission process through the LCBO, asDavies explained: Because weve been around so long, we know the process to plan timing-wise. We got it so our last couple brandsour product launcheswe were early to market and we had things well in advance to LCBO. We got approvals through, and we got it out there.Long-tenured employees contributed to corporate memory, provided stability within the business, facilitated creativity, and readily provided their expertise. However, Davies was aware that long-time employees could alsobe more resistant to changeand more heavilyrelied upon, rather thanestablishing more automated processes.Wellington Brewerystop management team described the company culture as very family and community-oriented. This type of culture worked well as long as the company remainedrelatively small. However, withthe expansion of the brewery and additional staffadded to the team, Davies acknowledged the need for a more balanced approach between focusing onmaintaining a familyfeel and integrating more structured roles into the business. Davies noted that when youre small, everybodys doing everything. But now, the thing is, you cant. You cant do everything. You cant have those pressures all the time.Some members of the top management team were responsible for multiple managerial roles, which reducedtheir ability to take on additional tasks or projects. The brewery had to start implementing its new inventory management system, but it was difficulttofind the right time and the right persontomanage the project, which incurred delays. That person would likely to be selected from among the busiest people in the company. Stress and confusion arose inreporting lines due tomultiple roles held by some employees. Davies felt that a revised organizational structure was needed to support growth plans,formalize processes,clarify rolesandresponsibilities, and reduce employee workload. COMMUNITY The community was a crucial element ofthe craft brewingindustry. Craft beers were locally handcrafted,authentic products. Wellington Brewery maintained its connection to the community through engagements inlocal events, charitable work, and donations to local causes. Daviesfelt thatthose decisionskind of become stand-in for a lot of things I think are really important, and in broader relationship building. Some initiatives included collaborations with local organizations, such as donationsto Pride support groupsbased on the sale of a specific beer brand orhiring local artists to design beer coasters. Despite its goal toexpand across the entire province, Wellington Brewery was eager to retainthe local brand feel and connections it had established within itscommunity. A craft brewerys community was dependent on location, size, and strategy. Some regions and communities were more receptive than others to craft beer. In fact, the number of Canadian beer drinkers that consumed craft products ranged widely from26per cent to 50per centof the population, depending on the geographical location.25Therefore, craft breweriesneededto decidewhether tofocus their efforts on competing in apopular craftbeermarket or instead tap into a smallermarketand build up the brand byeducatingnewcraft beer consumers. In Ontarios highly competitive Toronto market, for example, a craft brewerys community could vary fromthe entire city, to a geographical portion such aseastToronto or the downtown core, or even a specific neighbourhood such as The Danforth or Etobicoke. Abrewerycouldfocus onspecificstores within a smallarea to sell itsproducts to a targeted consumer group. Alternatively, it could instead cater to a much broader range of consumers. For example, Waterloo BrewingLtd. chose toexpanditsmarketshareby acquiring province-widedistribution rights forseveral majorbeer brandsincludingLaker, Seagram Coolers, and LandShark.26Smaller breweries looking for growth needed to be more creative due to their limited access to capital. An alternative to acquisition was to develop long-term sustainable relationships with retailers outside the community. To achieve this, craft breweries could leverage their existing connections with local LCBO stores and licensees to help them expand. Other options included sponsoring events and sports teams outside their city and developing innovative methods for bringing people from outside the community to the brewery. The craft brewery industry was generally collaborative. Companiesoften relied on each other during times of need and shared their knowledge at professional events. These practices helped produce resourceful teams and promoted rapid pivoting when information was needed. For example, when Wellington Brewerys equipment was experiencing rapid degradation due to the citys hard water, the companys vice-president ofbrewing and another employee leveraged their expertise to build a network of contacts who workedin wastewater management and water treatmentservices. Using this knowledge, the company was able to assess the problem and procurea new water system. One employee outlined his experience: It all ties back into [the fact that] we always try to get people out in the community to try and learn to make better beers. The[brewery]would put me out in trade shows to connect with people and network.So,if any of these things come up, I know who to contact.PRODUCT FOCUS Wellington Brewery was customarily known as an English-style craft brewery, with ale as itsfeaturedbeer type. In the past several years, its product line focused onthree core brandsand an assortment of experimental small-batch and seasonal beers. The companys high-volume productionbrandsatraditionalale, an India pale ale, and a lagerwere aimed at a wide consumer base and required different brewing strategiesthan its low-volume production brands, whichwere usually experimental beers aimed atconsumersseeking a novel beer-drinking experience. Therefore, the two different product linesrequired the company to attract twodifferent customer segments, which also dividedWellington Brewery staff members. A senior executive felt that staff memberswere conflicted between putting out products that sell versus products that are innovative. Davies agreed thatproducingaward-winning experimental beers wouldbuild street cred (short for street credibility or acceptability among fashionable beer consumers)and thus draw more customersto the brewery. However, he also recognized that although lagerwas not Wellington Brewerys choice of beer type, itrepresented the largestbeer market segment and could bean importantsource of revenuefor the company. Because traditional ale products had always been associatedwithWellington Brewerys identity, addinga lagerto the product mix wouldrequire a significant shift in business culture.COMPETITORS Wellington Brewery viewed the two international macrobreweries,Molson Coors BeverageCompany and Anheuser-Busch InBev,as major competitors inCanadasoverall brewing industry. Wellington Brewerysmainstream beerswere intended toincreasesalesand faceddirect competition for shelf space fromthetwobrewery giants. However, over the previousthree years, the overall craft brewerysegmenthad helpedflattenCanadian sales volumesof the twomultinational breweries, which reflecteda consumertrend away from traditionalbeer consumption.27Wellington Brewery saw all other craft breweries as collaborators, but it nonethelesscompetedagainst local and nearby craft breweries. For example,Guelphsinnovative small-batch craft brewerywas home to Royal CityBreweryand Fixed Gear Brewing, whilein nearby Waterloo, the mid-sized multi-branded breweryWaterloo BrewingLtd. had earned annualrevenue of $53.7 millionin 2019.28Guelph was also home to Sleeman Breweries(owned by Sapporo Breweries),alarge traditional brewery that sold bothdomestic and imported beer products. THE PRODUCTION OF BEER Beer had been produced in Canada since 1646. Key ingredients in the production of beer included malts (i.e., converted grains, often barley), hops (i.e., flowers of the hop plant), and yeast. Specifictemperatures and times dependedon the beers recipe. Yeasts were re-added throughout the process to produce sugars, some of which transformed into alcohol.29The companys brewmaster would create recipes fortraditional beer (e.g., lager or ale) or experimental beer (e.g., sour fruit beer)by usinga variety of additives and customizations. Compared withboth smallercraft breweries and largertraditional breweries, Wellington Brewerys advantagewas itsability to produce large amountsof experimental beer, although some ingredients and additives proved challenging toscalefor high volumes.The addition of new canning and brewing equipmentenabledWellington Brewery to significantly increase its efficiency. The company went from producing 20 hl per large batch in six hours to 40 hl per large batch in only two and a half hours. The new equipment also helpedincrease malt-processing efficiency and reduce water waste.Brewedbeer sat in tanks for approximately two to four weeks until it was ready for packaging. In recent years, cans had become the predominant packaging choice over glass bottles. Theshift to cans provided amore environmentaloption and resultedina better-tasting product. Cans could block ultraviolet light more effectivelythan bottles, whichhelped limit product spoilage.30Wellington Brewery employeda pilot system to experiment with different combinations of ingredients. Its low-volume capability allowed the companyto produce single products, or one-offs, and laterscale up to large volumes. Wellington Brewery was thus able to quickly react to consumer trends and release new products each week in the companys brewhouse. These frequent releases provided anopportunity to experiment, gauge customer reactions,and collect customer preference data at a relatively low cost. IMPACT OF REGULATORY CHANGES Both provincial and federal governments regulated the sale of alcohol in Ontario. Anannual excise tax wasbased on the beersalcohol percentage and production volume.31In2018 and 2019, Canadasalcoholic beverage industry faced various challenges, and some opportunities, due to legislation changes. Legalization of cannabis in Canada went into effect in October 2018, and cannabis-infused beverages were allowed to be sold starting inDecember 2019.32These legislative initiatives provided opportunities forcraft breweriesto enter thenewcannabis-infused beverage market. In addition, the sale of beer in grocery stores, which had started inDecember 2015,33had reached anOntario government goal ofenabling450 grocery storesin the province to sell beer. This new market segmentprovided access to a new retail option for many breweries across Ontario.34In 2016, the sale of alcohol was made available bymail directly toconsumers,35which opened a new opportunity formany breweries to set up an e-commerce platform. Discussionshad also begun on the topic ofmaking the sale of alcohol available in Ontarios numerousconvenience stores, although no decisions had yet been made on this potential new distribution outlet.Wellington Brewerys management team hadnot yet expressed an interest in the cannabis-infused beveragemarket. However, grocery store sales providedhigh margins, and e-commerce was an especially promising sales vehicle for the upcoming Christmasholidayseason, so the company decided to enter both of these markets. Discussions by Ontarios regulators on the prospect of allowing beer sales intheprovincesconvenience stores were still in early stages andremained unpredictable. Wellington Brewery was also licensed for the sale ofcider, but had yet to decide whetheror not to diversify into this segment, which could be an important considerationif a dropin beer salesoccurred. However, the company was comfortable remaining focused on beerproduction at this stage. As Davies noted,thecompany had historically done beer very well and still [saw] lots of room to grow. WELLINGTON BREWERYS SALES MIX AND DISTRIBUTION Wellington Brewery generated revenues from bothon-premisessales channels, such as the companysonsite brewhouseor licensees (e.g., bars and restaurants), andoff-premises sales channels, such asretailers. The brewhouse was the companys most profitable revenue source but represented only a small portionof totalrevenues, whereas off-premisesretailersales channelssuch as the LCBOand e-commerce, generated greater revenue amounts thatwere fundamental to the companysgrowth. Another important revenue channelwas contract brewing, which referred to Wellington Brewery offering its brewing premises and expertise to other breweries that did not have their own facilities. The breakdown of Wellington Brewerys sales mix consisted ofapproximately 25per centLCBO, 30per centlicensees, 25per centcontractbrewing, 10per centTBS, and10per centbrewhouserevenue. Althoughmacrobreweries typically sold their product in standard cases of 24 beers through TBS,craft brewerysales consisted mainly of low-number packsor single-unit sales. Therefore, the craft brewerysegmentsrelationship with TBSwas increasingly becoming insignificant. In contrast, the craft brewery segments relationship with the LCBO, licensees, contract brewing, and e-commercewascritical(see Exhibit 2). THE LCBO The LCBO dominated retail distribution in Ontario. Getting a product onto the retailers shelves was challenging for craft breweries. The LCBO used a web-based product submission process called the New Item Submission System (NISS).36This process required a new product to pass through a series of stages,ranging from setting price parameters to product tasting, which lastedat least six weeks. Several factors affecteda craft brewerys ability to be accepted and remain active in the LCBOstores. After a product wasaccepted, itsshelfspace was reviewedweekly. The LCBO preferred stockingbeer products in cans of 473millilitresandrequireda minimum of 20 litres of the product to be sold in eachstore within a specificperiod. Eachyear,a random sample from every product listed on the LCBO was sent to its quality assurance department for analysis of alcohol content and packaging.37If aproducts alcohol contentwas found to be over its advertised level by as little as 0.5 per cent, the entire listing could be removedfrom the shelves. Therefore,Wellington Brewerymadeconsistency a critical aspect of itsbusiness.Before completingthe NISSprocess, a craft brewery neededto establish a relationship with LCBOshead office and individual store managers. Dedicated brewery sales teams participated in ongoing relationship-building efforts and presented their new products. This process was labour-intensive and competitive. Shelfspace at the LCBO stores was limited,and macrobreweries occupied a considerableamount of the available space. Davies was aware thatnew-product applications to the LCBO were required forboth core and seasonal brands. The LCBO maintained an updated product-need item list through the NISS toguide new-product submissions.38As Davies explained,the better a products performance ratio, the better chance it had at getting a subsequent product in, or in scoring a seasonal listing. Wellington Brewery modified itstactics over time to maintain a positive relationship with the LCBO. For example, thecompany decided to adopt the LCBOs preferredformat of 473-millilitre cans for its beer. As well, the company used itsown distribution service, rather thana thirdparty,to better leverage opportunities to build rapport and connections with buyers. Among other strategies, Wellington Breweryofferedtasting notes and comparable products to the LCBO store managers and ensuredquality and consistency through lab testing before submissionof its products.The LCBO also offered companies monthly in-store marketing opportunities,such asproduct samplingservices and end-of-aisle placement. However, the cost of these promotions was usually too highfor craft breweries suchasWellington Brewery, and was thereforeused mainly bymacrobreweries. LicenseesAccording to Davies,retail sales channels tended to providehigher margins for the brewery than licenseesales channels,such asbars and restaurants. However, licenseesalso served a critical purpose ofpromotinga local presence and collectingvaluable information about consumer trends, product sales, and competitors. Therefore, Wellington Breweryopted for a relatively high portion of its product distribution through licensees, compared with most of its competitors. Its sales mix was set atapproximately60per cent retail and 40per cent licensees, compared with the sales mix of most competitorsat 80 per cent retailand 20 per cent licensees. However,securingpermanent beer brand placementon-tap at a licensee,such as a bar or restaurant, was becoming increasingly difficult. As Davies explained,macrobreweries tended to offer financial incentives tolicensees to gainon-tapbrand placement, whichcraft breweries were unable to afford. As well, with licensees frequently rotatingtheir beer tapsandadding new product lines, the required amount of beer from each brewery could drop significantly. Therefore, although Davies deliveredbeer kegs to licensees in personto build connections and gather information, he was also workingdiligentlyto grow Wellington Brewerys retail presence, especially through the LCBO. The aim was togradually reduce the companys dependence onlicensees and contract brewing. To achievethis goal, the business neededto findways to make its core brands self-sustainablebygeneratingconsistent and long-term revenue through higher-margin retailchannels,while reducingrelianceon lower-margin revenue streams. Contract Brewing Contract brewing provided a crucial revenue source for many breweries, despite itslowmargins. Wellington Breweryprovided itsproduction facility and expertise,at a cost,to breweries that did not have their own brewing premises, which helpedcounter lower-than-expected sales of its own product. However, contract brewingdid introduce various challenges. The process was labour-intensive and tended to require extensivementoring, especiallyfor lessestablished contract breweries. There was also apotential impact on Wellington Brewerys financial situation if a contract brewery was unable to payfor the services rendered. From a list of up to eight contract brewery prospects, Wellington Brewery narrowed itsfocus on only a couple of well-paying partners, which provided bothsignificant benefitsand potentialrisks. For example, despite a favourable working relationship withone major contract partner, Wellington Brewery suffered a revenue shortfall when the contract brewerysproductionwas unexpectedly reduced to 60per centof its2019 forecast, as aWellington Brewerysenior executiveexplained: We were actually able to negotiate a really good rate. Because they are so big, their beer is cheaper to make per litrethan some of our other contracts in the past, and we actually didnt have to eat too much on the margin to get this huge sum of volume. The problem is, it leaves us very much exposed.[If]they dont get their forecast right, it has huge implications for your financial forecasting, and thats basically what happened.E-Commerce The introduction of e-commerce as a newoff-premisesretail optionwas both beneficial andchallengingforcraft breweries. Difficulties included regulated mandatory shipping through Canada Post, standard shipping feesadded to orders(as opposed to being built into the selling price), the cost of packaging, and the labour-intensiveprocessing of online orders, whichrequireddifferentpackaging and shipping processes than the companysusual format. Wellington Brewery initially chose to use ShopifyInc.(Shopify) as itse-commerce

platform and engaged in benchmark research to generate ideas for the packaging, processing, and shipping of beer. The brewery was still looking for ways to improve the end consumers online ordering experience when customers purchasedWellington Breweryproducts. For example, through Shopifys data analyticsservices, Wellington Brewery identified a recurring issue withdropped online shopping cartsduring the checkout phase. The company assessed the problem and addressed the issueby finding a mutually beneficialrevenue and costs solution involvingshipping and processing fees, which was passed onto the consumer. MANUAL PROCESSES AND INSIGHTS FROM DATA Wellington Brewery conducted variousmanual processes to supportroutinetasks and operations. The manual processes included tracking inventory on paper and then physically verifyingthe amounts,forecasting sales usingMicrosoft Excel,recording licensee payments usingExcel and telephone calls,recording productionamountson paper and in Excel,and extracting sales data from the brewhouse point-of-sales system (TouchBistro) andinputting itinto Excel. Wellington Brewery deemedthese manual processessuitable andefficient because new beer recipes were frequently created and modified, which was convenient for its currentlegacy systems to create in-depth reports. Additionally, manual processes enabled interaction and promoteddata analysis. However, with the organizations expansion and growth, automatedprocesses would inevitably become criticaltoimprove overall efficiency. Davies was hoping toimprovethe manual processes by leveraging digital technology to increase efficiency, save time, and produce additional data. In recentyears, Wellington Brewery had started using data for sales-based tracking and to identify comparable products for submissionto the LCBO. Forexample, the companywas using the DigThisData platform, a business software-as-a-serviceapplication for alcohol vendors,to regularly monitorLCBO and TBS data. The softwareprovidedperformance, competition, andproductdatawith a two-week delay. Wellington Brewery used the datato better position itsproducts and improve sales forecasting. Wellington Breweryalso used Ekos, an ERP system designed for the craftbrewery industry that involvedcompleximplementation andtime-consumingprojectmanagement. However, Davies was not sure the Ekos ERP system was the most suitable choiceforthe companys needs. Marketing Data Wellington Brewery collected marketing data through its ownmonthly newsletterto customers, analyticdata provided bythe Shopify platform, and Google Analytics. The companys marketing department also remained abreast of new trends by monitoringsecondary research datasuch asBeer Canada reports, US market reports, international trends, andrelevantsocial media activity.The objective was to continue expandingstrategically across the province and buildthebrandsreputation. Monthly campaign budgets were determined on an ad hoc basis, depending on currentneeds. Davies hopedtofindcreative ways to communicate Wellington Brewerys history and value proposition across the province, without sacrificing itsstrong local presence. CONCLUSION Wellington Brewerys business strategy was fluid. The company was proactive in assessing risk and in finding waysto improve cash flow. The major recent expansion had been successful, but it had required Wellington Brewery to incur considerable costs. The highest priorityat this pointwas to recuperate thoseinvestment expenses. Davies was prepared to useall availableinformationto deviseastrategic pathforwardforhiscompany.

questione 5:

-Stakeholder's analysis