Stone Brewing Announces Restructuring & Layoffs

I concur with all of that, but would just add the wrinkle that each of these companies will face their own hurdles, and come up with their own solutions in this changing market. All of our buying habits are in flux- heck, I still buy Stone, SN, SA, Brooklyn, etc, but not really in the volume that I used to. But it's the same for the "bigs" (like Spaten), on the other hand...

Now, if we were to look at what are probably the most volatile demographics within the craft beer sector- switch hitters and IPA drinkers- each of those companies has a different vulnerability attracting and keeping them. But since Stone is so IPA-heavy overall, they would seem to be poised to take the biggest hit due to the increase in availability of uber-fresh versions. And that's an era they helped usher in on a national level, ironically.

SA and SN seem to have much better footing, due to a broader spectrum of products overall, but also a slate of solidly entrenched successful seasonals, which still sell quite well among the switch hitters.

 

Fascinating. Stone does seem to have gotten awfully caught up in the expansion for expanding game. I think the rapidity of that is finally catching up.

 

Michael that may be the case but I personally have insufficient insight here. @mwa423 has better insight from an IRI perspective.

Regardless of each breweries sales perspective there is increasing competition of the bigger craft breweries for selling their beers at retailers such as supermarkets.

Some posts have intimated that that the business exposure of Stone Brewing was their debt to open two new locations (Virginia and Berlin). Maybe this aspect has motivated Stone to cut some costs (employees)?

If the fundamental issue is that there is more brewing capacity of the larger US craft breweries than there is demand from the US craft beer consumers then it is likely that we will be reading more about 'adjustments' of the US craft breweries in the near future.

Cheers!

@Sixpoint @RobH

 

Sad but not surprising, the cool small local/craft breweries people know and love sometimes end up getting pretty big and then act just like the other big companies many people despise...gotta love the corporate world.

 

Go ahead and bitch about big beer being in it for the money..........



Enjoy

 

That sucks, although I don't drink a lot of Stone beer, big fan of the brewery. With all of these local breweries making great beer that can be obtained fresh, there is really no reason to buy off the shelf IPAs any more. This has to be having a negative impact on them. Why would I buy Stone IPA that is two months old and inferior to the awesome local breweries here in New York?

 

Posted this on Twitter too, but it's pretty simple. Walk into a store and Sierra Nevada's 12ers are $8-10 cheaper than Stone for equal quality. Easy decision. Ballast Point will face the same issues soon enough. Saw the Sculpin mix 12er for $28.99 today. Who would pay that when canned this week local IPAs are $12-15 per 4-pack? In this market, you have use scale to your benefit and accept that you're the new macro (Sierra Nevada, New Belgium, Lagunitas) or be prepared to face off with local breweries that are involved in the market and have buzz on their side. And lose

 

Yep yep yep. Wouldn't ever buy a Stone/Ballast Point 12er because of the 25-30$ price tag. It's not even a difficult decision, I just walk right by it.

 

I love Stone, but this is a business.

I haven't loved all their recent offerings however...there is plenty of demand, but I think they've consciously tried to go unique in an effort to differentiate, and instead just missed the market

 

This. If I'm out and about, I'll happily buy a pint of enjoy-by... but at the shop there is no way in hell I'd drop $18 for a six of 12oz bottles unless the date was super special... On the other hand, AB 16oz. cans for $13 is a steal. eh, whatever. I still hate the guy who invented the 4 pack and I hope he(or she) dies thirsty.

 

Agreed, Stone IPA and Sculpin have become value-ish drafts around Boston, which means $6.5-7 a pint. I'll pay that. But their packaged prices don't align with that and I haven't bought either in years. But buy SN all the time. When Celebration comes out, it's basically all I drink for 2-3 months due to combo of quality and value.

 

Was going to post this earlier today but waited till I heard from people I actually knew to confirm, definitely a sad day interested to see.how stone spins this one

 

I think SN is better positioned due to diversity and price. I love Enjoy By but it's not available regularly and priced too high so haven't bought it for long time. And too many IPAs on shelf in general.

They should bottle the RIS in 12oz

 

Not sure why Stone would put a statement like this out. It's almost admitting they are in trouble, which even if that is the case, there is no reason at this time to talk about it.
This is 99% "Small Local Brewery" related though and 1% "Big Beer" related.
I am a big fan of all of Stone IPA's but the small local breweries in my area are producing high quality hoppy beers and as fresh as Stone's IPA's are, they are not nearly as fresh as the local stuff I can get and I find myself buying less Stone beers because of that.

 

It's a new corporate CEO cutting costs.. competition had something to do with it, but
not nearly as much as they claim it does. They're rapidly expanding (with current projects actively in progress). Would the company really continue active, costly projects if the decrease in sales was as damaging to the business as the official statement makes it sound? Most likely they took on a lot more debt than expected with their expansions. Even if they're growth is 0%, lowering cost of goods sold is going to increase profit.

 

Your full reaction is strange considering that the announcement from Stone blames the competition from "big beer" AND the "local guys."

 

I happen to feel there is more of an impact from Big beer than local per say. Yes, tech all beer that is not Stone is a direct threat to them but you will always have someone local doing the same. I think a lot of issue falls with an entity that has so much power it can outlast you no matter the market, comp, or bad times. Little guys nip at your bottom line but their bottom line is also hit, its the major player with deep pockets that scares me.
I do think Stone is just re-organizing, it had a lot of cash out over the past few years and with some economic hits and comp hits they had to cut cost, that is part of the game. The true test will be if this happens again and more cuts, then we have a bleed and the wound may not heal.

 

I am no insider, but to me this looks/sounds like "dressing the bride" by increasing profits short term (1Q/2Q 2017) to increase valuation prior to sale or at least partial offering. A bit cynical, but everybody's doing it, right? Now that the AB/Coors/InBev/Megabrew deal is done, can you imagine the interest from them?

 

Stuff like this always makes me wonder how an entire economy can be based on the need for annual increases in profits. Is there no point in which a company can exist successfully on similar profits annually?

I get that the dollar's value decreases over time, which would force a company to make more money annually just to reach an equal value of previous profits. But the dollar's value doesn't increase 10% a year.

None of what I'm mentioning applies to Stone in theory. Once a business tries to grow at the level Stone has, it obviously requires a major increase in profits. As others have pointed out, that's what this looks like on the surface -- Stone overshot its bounds and is now trying to get its books back in line. From what little I know, I'd credit Stone for trying to do something with its profits rather than building a Smaug-sized mound of coin to sit on.

 

Of course news like this is hard to bear. I've been faced with layoffs in the corporate world a few times. In this case though the category is very healthy and I am sure anyone with Stone on their resume will get lots of good interviews.
I do want to say that I've drank way more than my share of Stone beers this year. Still going through the Anniversary 4 packs.