Lagunitas Brewing to lay off 12 percent of its workforce, affecting more than 100 employees

Discussion in 'Beer News & Releases' started by ESHBG, Oct 4, 2018.

  1. ESHBG

    ESHBG Aspirant (223) Jul 30, 2011 Pennsylvania

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  2. THANAT0PSIS

    THANAT0PSIS Crusader (764) Aug 3, 2010 Wisconsin
    Trader

    The squeeze on national breweries continues.
     
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  3. bound4er

    bound4er Champion (814) Jul 4, 2007 Wisconsin

    It's weird if I think about the national or large regional breweries that I used to buy from regularly five years ago. Today all have disappeared from my shopping cart except for an occasional seasonal release and in their place are smaller, more local breweries.
     
  4. dennis3951

    dennis3951 Champion (835) Mar 6, 2008 New Jersey

    This will not be the last time we read this story.
     
  5. THANAT0PSIS

    THANAT0PSIS Crusader (764) Aug 3, 2010 Wisconsin
    Trader

    I still buy Sierra Nevada and Boulevard fairly often, but I couldn't tell you the last time I bought a standard or even a seasonal release from Bells, Lagunitas, Founders, New Belgium, Stone, Anchor, and so on. It's not that I'm focusing on locals for the sake of it, either. Around half of my money goes to imports with Sierra Nevada, Boulevard, regional breweries, and locals splitting the remaining half.

    Lagunitas is a great price point, but as I said in a different thread about Stone, their lineup is absolutely stagnant. Sure, Super Cluster is a good beer, but is it really that different than Sucks, IPA, Sumpin', Hop Stoopid, Born Again Yesterday, etc.? Lagunitas has some of the most prominent house character, for better or worse, and that just bores my palate as well as exhausts it because of all the IPAs.
     
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  6. raynmoon

    raynmoon Crusader (780) Aug 13, 2011 Colorado

    With the talent they have, it's been a surprisingly dull year from them in terms of their Seasonal and One Hitter releases. Super Cluster was a great move though!
     
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  7. jrnyc

    jrnyc Meyvn (1,319) Mar 21, 2010 New York
    Premium Trader

    I used to drink Lagunitas a lot, but the lack of readable bottle dating and the explosion of awesome local breweries means I never buy their beer, except once a year when Born Yesterday comes out.
     
  8. flaskman

    flaskman Devotee (458) Aug 3, 2015 New York
    Premium

    I feel bad for those employees. I have close friends that work for breweries and they absolutely love their jobs and the culture surrounding them. I hope Lagunitas can stop the slide. They have always been on my go to list but I have to admit not as much now as in the past. Too many other great choices.
     
  9. Giantspace

    Giantspace Defender (673) Dec 22, 2011 Pennsylvania

    I do not buy small locals due to price being way too high.

    Besides Hamms I do not buy any beer regularly.

    I buy what ever is on sale. Many times it is larger breweries, Victory, Ballast Point, Cigar City, Goose Island etc. Sometimes smaller like Neshaminy Creek, Ale Smith or imports. Never is it local local small guys.

    I cant see paying $38-40+ on just average beer from these breweries. When on sale for $24-28 a case Im in.

    Last time I bought beer Lagunitas was one of the sale beers. I did not check case dates(most times sales are very fresh) as I did not want to spend $32-34 on Pils, Dogtown or IPA.

    Not sure if these cases are being dumped or sold as pallet quantity discounts to turn over more beer or why. This was the first time I have noticed Lagunitas in some time. I used to buy Dogtown and Maximus all the time 6-7 years ago as well as the sucks releases. Cant tell you the last time I had a Lagunitas or even saw one at a friends house.

    As the local small guys keep gaining more local dollars these mid to large guys will get hurt even more. Wont be a shock if Victory or a brewery their size goes out of business. These guys just cant keep up with the trends as they come and go. I know for me before I would buy an ok new beer from Victory at $15-16 I would buy a 4x16 for the same price from a good local small guy.

    Enjoy
     
  10. MJS08

    MJS08 Aspirant (280) Jul 29, 2014 Florida
    Premium

    Born yesterday, dead tomorrow.
     
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  11. Oktoberfiesta

    Oktoberfiesta Aspirant (249) Nov 16, 2013 New Mexico

    Shocking since I see them sell well here and they are among the most affordable six pack IPA options around. I saw them on sale for $7.99, while others are $8.99-$15.99.

    That just sets an almost Armageddon situation for other breweries who aren't priced low. If the priced right breweries can't survive, where are we really headed?

    Drinking local crap that may not be up to par and priced higher? I hope not.

    I haven't bought their products in many months. Local core ipas are priced a touch higher but are better. And I hope we trens toward that.

    I think every metro area has a local core IPA that tastes similar to lagunitas IPA. I'm surprised they want to double down on that beer. They hit it out of the park with affordable ba stouts.
     
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  12. HorseheadsHophead

    HorseheadsHophead Meyvn (1,469) Sep 15, 2014 New York

    That's sad. I still buy Lagunitas pretty often. But I can't say as I'm surprised. There's just too much competition out there.
     
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  13. Steve_Studnuts

    Steve_Studnuts Aspirant (258) Apr 21, 2015 Pennsylvania

    I guess this is a case of affordable price points not paying dividends. Truly a shame.
     
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  14. TrojanRB

    TrojanRB Meyvn (1,203) Jul 27, 2013 California
    Premium Trader

  15. beertunes

    beertunes Poo-Bah (5,587) Sep 24, 2007 Washington
    Trader

    Nor is it the first time.
     
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  16. beertunes

    beertunes Poo-Bah (5,587) Sep 24, 2007 Washington
    Trader

    The corporate bean counters make these decisions. The boss man sells the company, talks up a lovey-dovey future, and then, the inevitable happens. Tony still got his though.....
     
  17. Oktoberfiesta

    Oktoberfiesta Aspirant (249) Nov 16, 2013 New Mexico

    This quite scares me
    That's from the Santa Rosa link from the sfgate piece.

    They don't mention specifics but they say some lifelong workers were affected. And why not? Get college aged Sebastian to do the same job for $5 less per hour and he'll be happy with a case of free beer/week. I see it too often

    Craft beer feels and seems like a brotherhood to last a lifetime. But you do what's best for you and your family. Loyalty does.not exist unless you have some ownership stake.

    Another article mentions that lagunitas IPA is actually up 8% in restaurant sales.
    I do see that they mention it for last year so this year may be flat. They're preparing for the worst by cutting their best.
     
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  18. jesskidden

    jesskidden Meyvn (1,344) Aug 10, 2005 New Jersey

    The BREWBOUND article on the layoffs does:
    Or as their former head of field marketing, Jeremy Grenert (left in September), tweeted in a subtle but obvious dig at the sale to Heineken:
     
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  19. jesskidden

    jesskidden Meyvn (1,344) Aug 10, 2005 New Jersey

    Oh, yeah, forgot to mention that the article also notes that the opening of the new Lagunitas brewery in Azuza CA, scheduled originally for 2017 has again been postponed. According to a Lagunitas webpage for the facility:
     
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  20. Prince_Casual

    Prince_Casual Aspirant (296) Nov 3, 2012 District of Columbia
    Trader

    The market is the market, but this they can and SHOULD fix.

    They make a TON of beer. Sucks for example- is a great beer. I bought something at a Wegmans from a 50c+ display (this was probably 2 years ago mind you), tasted off, it was more than a year old. It was not good at all.

    All of these big regional/national breweries who bought tons of capacity with borrowed money, are in a real conundrum because they need to run at as high a rate as possible to make the beer to pay back the interest, but if the beer is not selling through they are going to be getting backed up at the wholesaler level and have either old product on the shelves (bad representation of their brand) or are going to burn money swapping out and buying back (whatever they can or want to do to take care of their wholesalers and retailers who are carrying the product that isn't selling through).
     
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  21. hopfenunmaltz

    hopfenunmaltz Meyvn (1,386) Jun 8, 2005 Michigan

    Was that the article that listed the capacity for each brewery? IIRC Petaluma 0.68 million bbl, Chicago 1.2 million bbl, Azuza 1.8 million bbl. That would put them into a huge over capacity situation in a flattening market.
     
  22. RobNewton

    RobNewton Zealot (572) Dec 30, 2014 New York
    Premium Trader

    Can't come soon enough.
     
  23. Vason

    Vason Initiate (117) Feb 19, 2008 Ohio

    As much as I love Lagu beer, I'm with many others in this thread in saying that it's been a while since I bought their beer. Probably since Shugga earlier this year. It's hard for me to justify buying any beer that's over $10.99/6 pack, and the only seasonals that I have seen from them this year at my store have been either styles I'm not interested in (Citrusinensis, Sumpin Extra) or too expensive to have more than once (Dark Swan, Cherry Jane).

    More innovation in their lower end seasonal lineup would reinvigorate my interest in them. Solid IPAs are great, sure, but I would love to see, say, a porter come out from them.
     
  24. Immortale25

    Immortale25 Poo-Bah (3,011) May 13, 2011 North Carolina
    Trader

    It's funny you say that because I noticed the tab on my Super Cluster can has an etching of the Sucks icon. I wonder if that's supposed to be a hint towards something. I know they're not the same beer since Sucks is 7.5% and Super Cluster is 8% but I wonder if they're similar recipes. And yes, most Lagunitas IPAs taste very similar anyways, but most of them are super tasty so I never complain.
     
  25. EvenMoreJesus

    EvenMoreJesus Champion (868) Jun 8, 2017 Pennsylvania
    Premium Trader


    So . . . Lagunitas is selling more beer, but laying off employees. Interesting.
     
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  26. ryan1788a5

    ryan1788a5 Poo-Bah (1,909) Nov 27, 2009 Massachusetts

    https://www.americancraftbeer.com/lagunitas-to-brew-newcastle-brown-ale/

    Excuse the overly anti-Big Beer tone of the article. It appears that they are finding ways to put some of that excess capacity to good use. Constellation has done the same thing, brewing a lot of Funky Buddha and the new Svedka seltzer out of their new Ballast Point Daleville, VA brewery.

    As a side note, I do find it very interesting that they are touting the Lagunitas connection on the Newcastle label. Looks like they may be trying to re-brand it a bit and place it more as a craft offering? Interesting move.
     
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  27. grampaernie61

    grampaernie61 Initiate (55) Jan 21, 2015 California

    Lagunitas uses Julian Calendar dating, which means they print the calendar day that the beer was bottled on their packaging. Enough class time. Born Yesterday releases next week.
     
  28. jrnyc

    jrnyc Meyvn (1,319) Mar 21, 2010 New York
    Premium Trader

    This I realize but it is virtually impossible to see as it is written in invisible ink.
     
  29. Alefflicted

    Alefflicted Initiate (78) Dec 2, 2017 Minnesota

    That's really to bad. I feel for those who lost their jobs, hopefully they all land on their feet.

    The truly sad thing is, I think we are going to start seeing more and more of this happening...
     
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  30. TrojanRB

    TrojanRB Meyvn (1,203) Jul 27, 2013 California
    Premium Trader

    Heineken paid an undisclosed sum....but likely around $1B.

    When you make an acquisition as a public company, sequential growth doesn’t matter as much....it’s all about performance relative to the business case (which is generally overly optimistic to support sky high valuations). And unfortunately, when there’s a negative variance, the first item in the playbook is cut heads.

    Big business is cut throat.
     
  31. threeviews

    threeviews Zealot (556) Apr 18, 2011 Florida

    With the sheer number of craft breweries (of all sizes) in operation, it is no surprise that the first to feel the squeeze from the smaller-scale and hyper-local competition will be the well-established, large-scale players...the OG's of the modern craft beer boon (if you will) that you commonly see in Grocery Stores, Target and Wal-Mart.

    Lagunitas IPA was revelatory back in 1993 and it carried them well into the new millennium. However, with substantial changes in the evolution of the IPA style, the palates of hoppy craft beer enthusiasts are shifting and Lagunitas IPA is considered pretty pedestrian and, dare I say, somewhat passe. But that is not to say it is a poor brand because it is still good for what it is. However, it is my opinion that they need to revamp their flagship similar to how Stone has revamped their profile:
    Ruination 2.0
    IPA "2.0" (updated hops)
    Retired: Stone Pale Ale (which was their flagship for years), Levitation Ale (the OG session IPA!), IRS, Old Guardian, Oaked Arrogant Bastard

    I use Stone just as an example to make the point of a larger, well-established craft brewery making significant changes to their portfolio in order to stay relevant...but I think Stone took a revamp way, way too far which has ostensibly lost me as a consumer. A delicate balance needs to be reached but Lagunitas has to polish their portfolio if they want to remain relevant in the current craft beer marketplace.
     
  32. EvenMoreJesus

    EvenMoreJesus Champion (868) Jun 8, 2017 Pennsylvania
    Premium Trader

    Or, perhaps, those positions were superfluous or redundant and were not needed for the business to continue to grow?
     
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  33. TrojanRB

    TrojanRB Meyvn (1,203) Jul 27, 2013 California
    Premium Trader

    Yup. Or they were hired in anticipation of growth that isn’t materializing.

    I’ve done a number of acquisitions myself, and generally find you can trim 10% without losing operational effectiveness.
     
  34. THANAT0PSIS

    THANAT0PSIS Crusader (764) Aug 3, 2010 Wisconsin
    Trader

    The way Stone did it sucks. Ruination 2.0 is just another IPA. Ruination was an experience. They also retired many of their best beers, as you note, though you didn't mention Sublimely Self-Righteous, which, along with Wookey Jack, was one of the absolute best black IPAs. As I seem to keep finding opportunities to say, Stone is very one-note now, and it's really, really boring.
     
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  35. threeviews

    threeviews Zealot (556) Apr 18, 2011 Florida

    @THANAT0PSIS
    I couldn't agree with you any more...I am crestfallen that both Stone and F/W both chose to retire their Black IPAs. Although Dubhe from Uinta is another personal favorite year-round Black IPA and I live in their distribution network, I haven't seen it in years...I sigh heavily.
     
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  36. rgordon

    rgordon Champion (859) Apr 26, 2012 North Carolina

    I can buy almost all Sierra Nevada 12 packs, including Oktoberfest, today, for $12.99. I love the the beers and why shouldn't we buy them? As far as Lagunitas, I vied for their beers here in North Carolina in the early 00s. They started out with one distributor in Raleigh and had commitments from the local Miller house which has operations in Greensboro and Charlotte. The Miller folks dragged their feet and Ron L. called me to contritely ask if our company would sell Lagunitas for a large swath of North Carolina, from the Virginia border to the South Carolina border-containing Greensboro, Winston-Salem, and Charlotte. I calmly said that I would. I love the beer and the people and wish them well as the market keeps changing, just like it always has....
     
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  37. Ahonky

    Ahonky Initiate (131) Feb 13, 2018 New York

    Lagunitas is the same brewery it has always been. If anything they are pumping out more releases. I simply don't give a fuck about the Heineken connection, and frankly, why would Heineken upset anyone? Heineken is responsible for millions of Americans putting down AALs. It's an important beer in the overall story of US beer consumption
     
  38. rgordon

    rgordon Champion (859) Apr 26, 2012 North Carolina

    In fact, my best brewery experience ever was at the Heineken brewery in Amsterdam. It was the early 70s, I was 20, and the place was packed with vagabonds like me from far and wide. We were treated to lots of really good free beer, food, and a place to commune nicely with an international group. Heineken was awesome to kids from everywhere, feeding us, and supplying plenty of beer. It is a great memory and they really had their shit together. The entire neighborhood smelled like fresh baking bread. It was beautiful.
     
  39. RaulMondesi

    RaulMondesi Poo-Bah (1,621) Dec 11, 2006 California
    Trader

    If they don’t bottle date, I don’t buy. (Hieroglyphs don’t count.)
     
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  40. WSchmidt

    WSchmidt Initiate (75) Jul 3, 2011 Virginia

    This over and over again. I never buy their hoppy stuff anymore. It just isn't worth the hassle of checking their pain in the ass bottle dates. If they moved to real bottled on dates, I'd reconsider.
     
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