Stone Brewing Announces Restructuring & Layoffs

Sad to hear this about Stone. Say what you will Stone is a major player in craft and any hit is just one more nail in the coffin from big beer. When they can saturate the market, buy up everything it just makes running a successful company harder and harder. The end result is stuff like this. Sad, companies only can take so many hits before they grow tired of it and move on. This is
why I choose to support the local guys and others, big beer is a vampire sucking the life out of everything in their way.

 

Very sad day for a lot of people. They all helped make Stone great and helped push the beer industry in SD forward. With a new CEO on board and all their expansion I was expecting some changes but not a huge layoff.

 

I'm sure the market had an influence over this, however with several costly investments (with more planned for the future) and a new CEO in position... cost cutting is likely

 

New CEO sounds like a weasel. They are private and can survive with less profits. Can't believe the founders would go along with this plan. Seems to go against everything they have always said they stood for. I bet a sale is coming soon.

 

You signed up for BA today and have only posted twice - both on this thread. Is this possibly personal for you?

 

More details and comments from former employees here: http://www.brewbound.com/news/stone-brewing-restructuring-lays-off-employees

 

If they pre-dated Mitch Steele, were they simply making too much money? That really sucks. I wonder if they were vested in any sort of 401ks or retirement funds.

The problem I see with Stone and many others is that I simply do not see them on tap at many places. I can think of one in all of my city. Their non seasonal IPAs tend to sit and the hyper local breweries are definitely quality. So people are definitely thinking about what they are getting with Stone, and they really need to step it up.

@mwa423 There is a thin line right now that I am seeing. Many local breweries have crap quality and those taps seem to be popping up everywhere and taking away taps from the likes of New Belgium, Stone, and Sierra Nevada. For that, I agree with you, there are quite a few idiots out there. But there is also some really high quality local beer that is taking beer drinkers to new levels. So it also makes sense that Stone needs to rethink many many things.

 

Just saw it on twitter and went to the linked story on Draft's website. Sad news indeed, I hope all those people will be able to land good jobs quickly. Sad to see beer companies run like big box retailers, the corporate response from the CEO reeks of it. I used to work in retail management and have unfortunately seen this type of letter several times(new direction, must focus on continued growth and long term stability, sad to see these "valued" employees depart). Anyways, I sure hope that this is not a sign of the times but am a realist enough to understand that it may be the new norm.

 

From the link: "One former employee who spoke to Brewbound believes those [Berlin and Richmond] projects had an impact on the decision to restructure. The employee said that the new locations had not created the expected sales expansion.

Another former employee pointed to first quarter budget cuts and deferred bonus payments that, at the time, Stone brass said were needed to put toward the opening of the Berlin brewery."

Germany is a very weird market. I lived there for nearly a decade and was continually surprised at German consumers' behaviors. For example, when Walmart entered the market, they brought with them a push for better customer service (a well-known weakness in German retail establishments). What came of it? The Germans complained about being "rudely" singled out and greeted at the door and about baggers touching their food (German supermarkets are bag-your-own). Would have never seen such things coming, but there they are. Add to it the very high costs of doing business there and the bureaucratic hoops that can lead to delays and expenses, and I am not surprised this may have caused some major pain for Stone.

 

The beer market for breweries like Stone, Sierra Nevada, Boston Beer (Sam Adams), etc. is extremely competitive right now. The handwriting has been on the wall for the past few years and the rapid amount of consolidation and business partnership changes are clear indications of this competitive landscape.

I wish the folks who lost their jobs at Stone the best of luck.

I will personally continue to follow the various machinations of the craft beer industry. I am sure that more changes will be occurring in the near future.

Cheers!

 

I agree there are a lot of little guys popping up, some do have crap beer. But we all know that they will close as fast as they open because bad beer is bad beer and not too many people will continue to spend with them if that is the case. I am really for more and more breweries, none of us know who may be the next Stone to pop up and take the scene by storm. I really hate to blame saturation on the issue because that is sort of attacking the belief that competition is bad, I think its a good thing because it pushes others to stay vital and creative. Like anything I think a major problem is cycles, costs, etc. People jump with trends, go with what popular, etc. I think you may see an up and down due to this. I also think some issue is with cost, I look at Stone for instance, most 6 packs are like $16. I can get a 6 pack of local guys which is very good beer and its $7.99-8.99. So this is another player at hand, a lot of people will buy the 12 beers for same as 6 especially if it is great beer. I know a lot of my local guys have killer beer and fresh as can be, so tough when dollars come into play.
In the end I think we will see this continue and the pressure will mount for small guys to sell to big beer if they want to see their products survive. Not a lot have pockets like Stone, and even Stone is not immune to costs vs sales and bottom lines. It will be interesting to look back in two years and see what happens, I really hope we don't lose our favorites that is for sure.
Cheers

 

I do wonder if this isn't the direction we are headed. With the demand for fresh and local beer and IPAs more than a day old are stale, more of this may be coming. If there is a bubble, I think the nationals like Stone, Sierra Nevada, Lagunitas, Ballast Point, Sam Adams, etc are the ones that are going to be hit.

I just checked my basement. I have 225 beers. The vast majority are VT IPAs and stouts from the local brewery down the street. I have 3 BA Arrogant Bastard and those are my only west coast beers. Out of 225. I just don't go looking for beer from the nationals because they aren't as good as the stuff i can get here.

 

This is about 5% of their workforce ( which I believe had been growing ) They have opened two new breweries. They are very widely distributed. Not to minimize the impact on the laid off employees and their families, but it's not like beers from Stone are going to be unavailable.

And sure anyone who drinks a low quality beer could have been supportin high quality instead. But it's not like there are not low quality beers with regional and national distribution. Even speaking of flavorful beers only. And of course the folk who drink the less than flavorful beers far outnumber the locavores, but it'd not right to call those folks idiots. They just drink what they like.

 

The problem is that all brewers and consumers want everything to keep growing; For new breweries to pop up everywhere, for entire stores to keep opening up dedicated to beer.

The issue with that, is there just aren't enough people buying that much beer all the time. We expect constant growth based off of previous year's numbers, but business doesn't always work like that.

Some companies grow like crazy and take over. Some small breweries try to go big and fail. Some have to cut back on expansion plans. This is just business. Happens everywhere, we just don't like to see it with beer, and it scares us.

But don't be. There will always be demand for quality beer. We may just not see the same names on the shelves year in and year out.

 

I don't know about the "they're planning to sell" part, but I agree that axing long-time employees because of slower-than-expected GROWTH seems like a pretty shitty move. Yes, maybe they racked up a lot of debt with all the expansion they're bragging about and are trying to prevent bigger cuts later -- but I can't help but wonder how much of a compensation cut the CEO or investors took.

Not a fan of all the corpo-speak in their press release either.

Best of luck to the laid off folks, and to those still working there.

 

Obviously their growth has slowed, but a bigger point here is that craft beer is a business. Stone, like any other company, is in it to make money.

 

Stone's brewers tend to make some really incredible beers after they no longer work there. I look forward to seeing what these talented individuals do going forward.

 

"....that includes the incredible accomplishments of opening two new breweries, which are ultimately expanding the availability of Stone beers......"

I'd guess that^ is the main thing. A LOT of expense, plus people now making beer here means some of the people there (CA) have a smaller "audience", than when it was all in CA. Some become expendable, unfortunately.

Not sure if it is indicative of the overall situation, but most/all of Stone beer I see in grocery stores is old/oldish. Bought Arrogant Bastard on 4/12, with a BB date of 4/14. I got 1 more, & the rest sat there 'til September, not to be replaced. Other stuff either has no date, or was out of date. When I've noticed, and this goes with other stuff too, it's arriving old. In one place, I see OB Dale's Pale Ale from April still, not refrigerated. Arrived there in June! Etc,etc,etc.

I have gotten Stone products , & most of my beer,from the bottle shop ~1mi from work. Few people go there though,despite the lower prices, & fresher beer, relative to how many buy from grocery stores and convenience stores.

In many cases, people just don't know how good it is, & pass it by(I listen. ; ) ) . I see the '15 ST Warlock bottles, in one store, with a hang tag, with the RB rating on it. Maybe this sort of thing, and more effort in working with retailers, is needed?