Overseas Demand is Brewing for US Craft Beers

Overseas Demand is Brewing for US Craft Beers

US craft beers have become increasingly popular abroad. Unfortunately, exports have not been able to match the growing demand.

High transportation costs and the risks of transporting a perishable product over long distances have deterred some brewers from exporting. Although some brewers have partnered with overseas beer makers and bottlers to expand rapidly, others have preferred to take a slower, careful approach to market share growth.

This post is based on the PRI.org article, Europeans are embracing American craft beer. So, why are exports trailing off?, by J. Margolis, February 15, 2018. Image source: nuamoid / 123RF.

Discussion Questions

1. Price, delivery reliability, delivery speed, quality, and flexibility can be order winners or qualifiers. For New Belgium, which characteristics are order winners and qualifiers? Why?

Guidance: Superior quality is definitely an order winner because overseas beer drinkers like the hoppy taste of US craft brews. Price is a qualifier; the high cost of shipping the beer overseas makes it difficult to beat the local competition on the basis of price. Delivery reliability is a qualifier; customers will cease to do business with suppliers who cannot deliver on time. Flexibility is a qualifier; brewers must provide the variety Continue reading

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Shipt and Instacart Deliver The Goods

Shipt and Instacart Deliver The Goods

January 1, 2018

Article Title: The Amazon-Whole Foods Deal Is Turning Out to Be Good for Delivery Startups

Author of Article: Craig Giammona

Date of article: December 12, 2017

Source URL: https://www.bloomberg.com/news/articles/2017-12-12/whole-foods-deal-provides-improbable-boost-to-delivery-startups

This Bloomberg  article looks at two food delivery startup companies: Shipt, Inc. and Instacart, Inc.  With Amazon’s purchase of Whole Foods, the outlooks for these companies and traditional grocery stores looked bleak.  However, to compete against Amazon in the food delivery market, these two startups are partnering with traditional supermarkets to offer same-day delivery.

Shipt is planning to exceed revenues of $1 billion in 2018. Their focus is the Southeast and Midwest, and partners include Kroger, Publix Super Markets and H-E-B Grocery Co.

Instacart has also partnered with Kroger, and with Albertsons.

Both delivery startups have a similar approach.  Their retail partners make specific items available online.  They then send in a personal shopper to select and deliver the items.  Instacart offers a per-delivery fee, or unlimited delivery membership.   Shipt has a $99 annual membership plan with unlimited deliveries.

Discussion Questions
1. Why are retailers partnering with firms like Shipt and Instacart versus developing their own systems?

Guidance Continue reading

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The 26 Second T-Shirt

The 26 Second T-Shirt

September 28, 2017

Title of Article: China Snaps Up America’s Cheap Robot Labor

Author of Article: K. Hamlin

Date of Article: August 30, 2017

Source URL: https://www.bloomberg.com/news/articles/2017-08-30/china-snaps-up-america-s-cheap-robot-labor

This BusinessWeek article describes the production of a 33¢ T-shirt by a Chinese company in the United States (US). In early 2018, Tianyuan Garments Co. will open a $20 million factory in Little Rock, Arkansas, using American-made robots which can produce a T-shirt every 26 seconds.

Tianyuan is one of the largest apparel makers supplying major brands worldwide. Rising labor costs in China have made production with robots attractive, and rapid advances in technology have made feasible the complex process of sewing. Further advances in the garment industry are around the corner.

Discussion Questions

1. Discuss the advantages and disadvantages for Tianyuan in having a factory overseas.

Could discuss tax cuts, labor costs in the US, fewer workers due to automation, consistency in output, capacity utilization, depreciable assets, capital investment, and currency fluctuation.

2. Develop a plausible worker-machine chart for the Tianyuan factory in Little Rock, Arkansas.

Groups of machines will likely be managed by 1 or 2 workers to ensure the 26 second takt time.  See Softwear Automation’s simulation of a Continue reading

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