Russian River Brewing Company In 2016: Positioning Pliny the Younger Craft Beer for Growth

Author: Sergio Canavati, Ph.D., Armand Gilinsky, Ph.D.; Jeffrey Young

Publication: Case Research Journal

Publication Date: June 1, 2018

Abstract:
Russian River Brewing Company's [RRBC] owners and founders, Vinnie and Natalie Cilurzo, grew their business into one of the largest craft breweries in Sonoma County, California, from 2003 to 2016. RRBC's success surpassed the Cilurzos' initial expectations, as they were able to increase production fourfold and RRBC became one of the top five craft beer producers in the region. RRBC won multiple awards for the quality of its beers, in particular for the seasonally produced and allocated cult brand, Pliny the Younger. By 2015, the Cilurzos had paid off all outstanding debt and purchased 100 percent of the firm's equity using internally generated cash flows. However, RRBC's production and consumer retail infrastructure were insufficient to meet spikes in consumer demand. For over a decade, the Cilurzos largely dismissed the idea of expanding, but in spring 2016, discussions between the couple about investing in a second brewpub to expand production got more serious. As the Cilurzos analyzed RRBC's internal and external environment, they searched for ways to find consensus regarding expansion.