Macedonian Thrace Brewery S.A.

A Business analysis

Dimitris Tsagkos || KFD555 Business Analysis & Law || Thomas Polesie

Master of Business & Design || University of Gothenburg || January 2015

INTRODUCTION

The following Business Analysis is about a greek brewing company called Macedonian Thrace Brewery S.A. Its structure is based on the Triangle model. The triangle
has 3 sides that represent three key areas of interest one should examine when
trying to have a clear overview of a corporation:

1.Finances

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from the companys annual reports published on their website.

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This part is about the human factor and the management style applied within the
company.

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This part of the analysis deals with qualitative characteristics of the brand and refers
to issues such as the design management of the company or the image that the
consumers have imprinted on their minds about it.

SUBJECT

OBJECT

Dimitris Tsagkos

FINANCES

Macedonian Thrace Brewery S.A. : A Business analysis



COMPANY PROFILE

Macedonian Thrace Brewery S.A. was established in 1998. Their factory lies in an
industrial park in Komotini, a midsize town a few hours drive from the Turkish border
and few minutes from the Bulgarian border. They produce 200.000 hectolitres of
beer per year, and thats only for tax reasons because any production volume above
that limit is taxed higher according to the greek law.

The factory in Komotini

The location of the factory

Highlight from the production line

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Macedonian Thrace Brewery S.A. : A Business analysis

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COMPANY PROFILE

THE PRODUCT

The company handles four different sub-brands:

Vergina Beer (Premium, Red and Weiss), Edelsteiner Premium Pils, Stadelbrau
Helles and Tuvunu.

EXPORTS

The company exports its beers to 9 countries around the world: USA, Japan, Australia, Italy, Germany, Poland, Albania, Cyprus and Spain. This is a vital income
source for them, since the beer market in Greece is in recession. Furthermore, up
until recently it had the characteristics of a monopoly, with Athenian Brewery S.A.
controlling up to 90% of the market.

BUSINESS STRATEGY

Macedonian Thrace Brewery is working for the expansion of the international presence of Vergina beer, aiming to secure its distribution in the East and West Coast of
the USA. Furthermore, they want to strengthen their presence in the regional markets of Athens and the islands, where they can reach out more tourists and get a
slice of the pie from their competitors.
In July 2012, the company released to the market a new product called Tuvunu. Its
a biological, offmountain traditional tea from Thrace with honey and lemon. The
100% Greek mountain tea with its antioxidant properties had never been exploited
commercially until then. CEO Mr. Politopoulos notes that Ice Tea Tuvunu is only the
beginning of a plan to release to the market a range of healthy refreshments utilising
the thousands of herbs of the Greek land. In other words, the company managed to
access a blue ocean of non-alcoholic, herb-based beverages.
In terms of productivity their goal is to exceed the cultivation of 10,000 acres of
crops and cover 100% of their needs in barley solely by domestic sources with no
need to import any of it.
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Macedonian Thrace Brewery S.A. : A Business analysis

04

FINANCES

THE RECTANGLE OF 2011

Scale : 1 cm = 2 million , All figures in millions

Revenues : 16,060

Equity : 8,950

Non-Current Assets : 8,215

Current Assets : 7,870

Liabilities : 6,780

Expenses : 15,350

Profit : 0,710

2011 was the year when the company completed investments of 4.5 million euros
and introduced new designs for the production of different types of beer. Further on,
they invested in the cultivation of 2,500 more acres of barley and in the establishNFOUPGUIFmSTUHSFFLNBMUQMBOUUIBUDPTUFENJMMJPOFVSPTBOEXBTTPMFMZ
funded by their equity without any subsidies or loans.

CEO Mr. Politopoulos in front of the malt plant

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Macedonian Thrace Brewery S.A. : A Business analysis

05

FINANCES

THE RECTANGLE OF 2012

Scale : 1 cm = 1 million , All figures in millions

Revenues : 16,480

Equity : 9,600

Non-Current Assets : 7,880

Current Assets : 7,860

Liabilities : 6,140

Expenses : 15,857

Profit : 0,622

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previous year, and the rectangle looks quite unchanged. However, despite the
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Macedonian Thrace Brewery S.A. : A Business analysis



FINANCES

THE RECTANGLE OF 2013

Scale : 1 cm = 1 million , All figures in millions

Revenues : 19,010

Equity : 11,050

Non-Current Assets : 11,975

Current Assets : 6,990

Liabilities : 7,915

Expenses : 17,105

Profit : 1,905

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Dimitris Tsagkos

Macedonian Thrace Brewery S.A. : A Business analysis

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FINANCES OVERVIEW

2011

2012

2013

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Macedonian Thrace Brewery S.A. : A Business analysis

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SUBJECT

THE LEADER
The company rather follows a one-man show management style. Its existence is
the result of persistent efforts by its owner, Dimitris Politopoulos, who has suffered
countless indignities in his 16-year battle to build a microbrewery and wrest a sliver
of the Greek beer market from the Dutch colossus, Heineken. His tires have been
slashed and his products vandalized by unknown parties, and his brewery has
received threatening phone calls. The problems were serious enough that the HelMFOJD$PNQFUJUJPO$PNNJTTJPOIBEUPJOUFSWFOFBOEmOF)FJOFLFOGPSVOIFBMUIZ
competition.

THE EMPLOYEES
Today, the company has a committed team of approximately 80 employees. They
have managed to retain a close-knit family atmosphere, while at the same time
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in Greece. They have generally managed to communicate a healthy image of
themselves, one of a company that cares about its employees and enhances the
local society.

THE PRODUCERS
Planning for the future, the company is implementing an important farming program,
budgeted at 400,000 euros. According to their plan, 200 new producers in the
region of Xanthi will supply them with an extra 80 tons of organic tea, which is indispensable for the production of Tuvunu. With all these producers being directly linked
with the Brewery, one can understand the impact that the production of the refreshments has in the local economy. The producers know that there is a stable company
out there to buy the bulk of their production annually, and new job opportunities are
created in the area so that young people dont have to immigrate abroad to acquire
a better life.

The producers in action

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Macedonian Thrace Brewery S.A. : A Business analysis

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OBJECT

QUALITATIVE CHARACTERISTICS OF THE BRAND

The herb industry has been growing rapidly worldwide, as the customers turn to
more healthy products. The companys decision to penetrate the herb-based healthy
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When it comes to beer, although Vergina now has a 5.5 percent share of the beer
market ranking behind only Heineken and Carlsberg, and ahead of about 12
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hotel. As a result, it remains unknown to a big part of potential consumers. Moreover,
its low price has contributed in the product being perceived by the consumers as a
poor mans beer, growing its popularity among the lower income layers of society.
The perception of Vergina Lager as a cheap beer provides the company with some
loyal customers (e.g. students), but repels some other consumer groups from
buying the product. In order to deal with it, the company has released through the
years two more types of beer (Red and Weiss) which are of higher quality and are
appealing to more demanding consumers that are willing to pay higher prices to
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in the biennial International Brewing Awards of London in 2013, under the category
Speciality Wheat Beer. Surprisingly, on behalf of the company there was no organized effort to take advantage of this success and capitalize it through an advertising
campaign.
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environmentally friendly as possible. Their factory uses modern technology, such as
the cooling water recycling plant which annually saves 20,000 cubic meters of
drinking water. This amount of water corresponds to the average annual consumption of a town of 300 residents. However, they didnt seem to make any effort to
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remains an unused weapon in their hands.
On a funny level, Vergina has gained some publicity on the internet among youngsters in Anglo-saxon countries, as the brand names pronounciation corresponds to
the one of females genitals. It remains unknown how the company could deal with a
complex sensitive issue like that, in terms of communication.

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OBJECT

FUTURE PROSPECTS
Things go well for the Brewery abroad, but its vital for it to strengthen its position in
Greece, since its there where they still acquire the biggest part of their revenue.
Having that in mind, they should take under consideration that the greek beer
market is heavily bound to the following three major factors:
1.The tourist arrivals.
Greek tourism hit a record high of 21.2 million visitors in 2014, raising tourism
revenues to 13.5 billion euros. Tourists form a demographic group that can boost the
sales of beer and the challenge for Macedonian Thrace Brewery will be to reach out
to them with an appealing marketing campaign.
2.The economic crisis.
According to Euromonitor International, if the economic crisis does not subside, it is
highly unlikely that beer will display a positive performance in the years to come,
since consumers incomes are shrinking drastically on a monthly basis. Macedonian
Thrace Brewery could actually take advantage of this trend, attracting some customers of rival companies that cant support buying expensive beers anymore.
3.The annual beer consumption per capita in Greece.
Greeks were only drinking 31 litres of beer compared with the European average
consumption per capita which was noticed to be 80 litres in 2011. However, the
situation seems to change on a national level. Greeks used to think of beer as only a
refreshment and would mainly seek for it during summer season. The lower prices of
beer compared to the ones of other spirits have made it more and more favourable
to the consumers during the last few years. Furthermore, Greek Country of Origin
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trend can enhance brand equity of Greek beer brands and provide Vergina with an
important strategic advantage compared to the imported labels of beer.

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CONCLUSION
Macedonian Thrace brewery seems to make small but stable steps towards the
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THE END

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SOURCES

Macedonian Thrace Brewery S.A. corporate website

http://www.verginabeer.com/
http://www.euromonitor.com/beer-in-greece/report
Imerisia newspaper, Article about the Greek beer market, Retrieved 1st January,
2015
http://www.imerisia.gr/article.asp?catid=26519&subid=2&pubid=112879832
Goodnews.gr, Article about Tuvunu, Retrieved 1st January, 2015
http://en.goodnews.gr/Articles/Traditional-tea-Tuvunu-is-thelatest-new-export-from-Greece_1570.html
NYTimes, Interview with Mr. Politopoulos, Retrieved 1st January, 2015
http://www.nytimes.com/2011/01/30/business/30greek.html?pagewanted=all&_r=0
To Vima newspaper, Article about greek beer consumers habits, Retrieved 2nd
January, 2015
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Imerisia newspaper, Article about the supermarket beer trends, Retrieved 2nd January, 2015
http://www.imerisia.gr/article.asp?catid=26519&subid=2&pubid=112992850
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http://sete.gr/EN/Home/
Pbs.gr, Arcticle about Tuvunu lancement in the market, Retrieved 5th January, 2015
http://www.pbs.gr/cms/?q=node/3255

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