MBAX 6990 Week 3 Capstone Situation Analysis Example

Quarry Hill Brewing's Situation, Outside In: Water That Costs Twice, Deposit Laws That Differ by State, a Slowing Craft Market and the Keg Loop the Brewery Already Runs

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Walden University

MBAX 6990: Capstone: Sustainable Business Practice and Strategies

Instructor Name

Month Day, Year

Quarry Hill Brewing's Situation, Outside In: Water That Costs Twice, Deposit Laws That Differ by State, a Slowing Craft Market and the Keg Loop the Brewery Already Runs

Purpose

Later sections of this capstone will take the brewery's circumstances for granted, so this analysis states them once. Quarry Hill Brewing, the composite brewer at the center of this capstone, makes roughly 28,000 barrels annually for three New England states and ships most of it, three barrels in five, in glass. The analysis runs from outside in: external pressures first, because they define which capabilities matter, then the brewery's own strengths and gaps. All company figures are illustrative, drawn from published industry ranges.

Water That Costs Twice

Brewing uses far more water than ends up in the beer, for brewing, cleaning tanks, washing kegs and cooling. Published benchmarks for craft breweries range roughly from three to seven barrels of water per barrel of beer; Quarry Hill uses about 5.5, or roughly 4.8 million gallons a year. The brewery pays twice for that water: once to draw it from the municipal system and again to discharge it to the sewer, with a surcharge because brewery wastewater carries high levels of organic material. Combined, those charges come to about $30 per thousand gallons, or roughly $143,000 a year. That double charge is why rinse-water recovery has a financial argument before it has an environmental one: every gallon reused avoids both the purchase and the discharge. Tank and keg cleaning account for roughly a third of the brewery's water, and much of the final rinse water is clean enough to reuse for first rinses, which is the opportunity the recovery project targets.

Deposit Systems, Described

Whether a state runs a container deposit system changes how readily empty bottles come back. Massachusetts and Vermont both have beverage container deposit laws that cover beer bottles, with a refundable deposit, five cents in both states, collected at sale and returned when the container is redeemed. New Hampshire has no deposit law. In the two deposit states, retailers and redemption centers already handle empty beer bottles, which gives a returnable program an existing channel; in New Hampshire, empties would have to be collected through the brewery's own distributors or not at all. How a refillable bottle would be treated under each state's law, for example whether a brewery may run its own redemption for refillables, is a legal question this analysis does not answer and would route to counsel.

A Slowing Craft Market

The craft beer market grew quickly for two decades and has since slowed, with many regional breweries facing flat or falling volumes and rising competition for shelf space. For Quarry Hill, that means capital is scarce and any project must earn its keep. It also means that distinguishing the brand matters, and a credible sustainability story could help with the retailers and drinkers who value it, though the analysis does not assume a price premium. Elkington (1997) warned that such stories must rest on performance across economic, environmental and social lines, not on one visible gesture.

Glass Prices and Supply

Glass bottles are Quarry Hill's largest packaging cost. Their price rises with energy costs, since glassmaking is energy-intensive, and supply has been tight in recent years. A returnable bottle that makes many trips reduces exposure to those price swings, while a single-use bottle carries the full cost every time. Life cycle studies also find that the environmental burden of glass falls sharply as the number of trips rises (Amienyo et al., 2013).

The Loop That Already Works

Turning inward, Quarry Hill's most relevant capability is its keg loop. Its distributors already collect empty kegs from bars and restaurants and return them to the brewery, where a keg washing line cleans them for refilling. The brewery therefore already manages reverse logistics, the flow of empty containers back from customers, and its distributors are used to carrying empties on return trips. A bottle return program would extend that loop rather than invent one. Hart (1995) argued that firms build advantage when environmental strategies draw on capabilities they already have, and the keg loop is such a capability.

Strengths and Gaps

The brewery's strengths include experienced brewers and a small maintenance team that installed and runs the keg line, a loyal home-state retailer base and owners who have expressed interest in sustainability. Its gaps include no in-house engineer for a water recovery system, a bottling line designed for new glass only and limited capital after a recent brewhouse expansion. A returnable program would also require bottles heavier than single-use glass, able to survive repeated washing, and a label that comes off in the washer.

Implications

Three conclusions carry forward. Rinse-water recovery has a direct financial case because water costs twice. A returnable bottle program is most plausible in the two deposit states, where an infrastructure for empties already exists, and in the brewery's own taproom. And the brewery's keg loop is the capability on which any return program would be built.

References

Amienyo, D., Gujba, H., Stichnothe, H., & Azapagic, A. (2013). Life cycle environmental impacts of carbonated soft drinks. International Journal of Life Cycle Assessment, 18(1), 77-92. https://doi.org/10.1007/s11367-012-0459-y

Elkington, J. (1997). Cannibals with forks: The triple bottom line of 21st century business. Capstone.

Hart, S. L. (1995). A natural-resource-based view of the firm. Academy of Management Review, 20(4), 986-1014. https://doi.org/10.2307/258963