Stone Brewing Announces Restructuring & Layoffs

I disagree...in their current situation I think it was very smart leadership.
Brewing is a business, and this move was smart business as well. Whether or not they should have undertaken their recent expansions is another matter entirely (but as a rather well known beer writer and wise philosopher once noted, "...you never know until you check it out..")

But all that aside, it's important to recognize that breweries both bigger and smaller are in the business to make money (and if a brewery or any business is not well focused on that, they are simply fools and deserve to fail). As far as their current strategy is concerned, Stone's move (along with their obvious attention to quality) should help them weather the storm of increasing competition, which will most certainly only increase in the coming years.

As far as the talented laid off employees, even though people wanting to work in breweries are probably a dime, -a-dozen, these folks will probably find work elsewhere and get to the head of the line by virtue of having Stone on their resume.

It's a jungle out there. The business of brewing has always been just that...but with the explosion of new brewers starting up, the marketplace has only gotten crazier (and make no mistake about it...not necessarily for the better). Many serious industry observers seem to agree that a large percentage of the newbies that started up over the past 5 or 10 years will surely be gone within the next 5 or 10 years (and most of them very likely will not be missed). The ones that "sell out" or (more likely, just fail outright) will do so because they can't cope with increasing competition in a marketplace that is rapidly becoming very saturated, and partially because they aren't turning out a truly good product to begin with (or if they do manage to come up with something good, there seems to be rampant inability to do so with consistency). There is far too much product these days calling itself "craft", and ironically, real craft seems to be something sorely lacking in many of those products.

It's hard to predict what the "tide" will ultimately bring in (as what it could wash out), but I'm reasonably sure that Stone is safe, and the move they made seems to be a very smart one indeed, and one that should keep them in the game (and in control of their business destiny) for a good while. I really think that they will be one of the survivors...and I certainly wish them luck down the road.

Sorry to ramble ; I do tend to do that , but it really seems to me like the brew-ha-ha over Stone's decision is really "much ado about nothing". Actually I probably should have just posted that last statement and skipped the lecture that preceded it.

cheers!

 

@LuskusDelph, thank you for taking the time to craft your above post. FWIW I agree with what you are stating and I also think that Stone will still be around 5-10 years from now while other startup breweries that are making sub par product will not be able to say that.

Cheers!

 

A problem I see in the market. It has been flooded with new breweries and beers. There is more beer available where it wasn't 5 years ago. Every week there are multiple new products available. People want to try as much new beer as they can and get off their normal beer (like Stone IPA). So instead of buying 3 or 4 six-packs a week they might only buy 1 now due to trying the new product available. I do not think it has anything to do with "big beer companies". I think it is just too many small brewers getting into areas where people haven't heard of them or tried their product and trying them instead............ I could be wrong, but that's what I see happening at my shop.

 

Do you also see Goose Island or Ballast Point beers on those shelves? They are owned by "big beer," so some would include them in that category.

 

Also some percentage of craft purchases isn't occurring in your or anybody else's shop, as sales of craft beer in the actual brewery where it was brewed--"same site sales" or "on-site sales" or something like that--is at around 9% of craft beer sales and 2 million barrels a year. (Of course a non-negligible percentage of that 9% probably gets transacted at Stone, on-site!)

 

I don't think @mwa423 is criticizing beer distributors and store owners for stocking local beer (although he is welcome to correct me). If customers buy the beer, that's the store owner's bottom line. The store owner is not in a position pass judgment on a beer that sells, and no one else should judge the store owner for stocking what sells. What beer is stocked/sold is ultimately the responsibility of consumers who buy it. I think many would agree that there are lots of consumers now who overlook quality problems in their locals and sometime don't know enough about beer to even detect quality flaws when it's in their face. Heck, you can tell from this thread and other threads that many consumers don't even know what "quality" means in a brewing sense, and members on this website are probably more beer-educated than most consumers! It's those consumers who are "the problem" (depending on your viewpoint of course) and allow sub-par brewers thrive, while established high quality craft brewers like Stone, Victory, Bells, Sierra Nevada, etc. feel the pinch. @mwa423 is a little abrasive, but it's very hard to tell people these truths without ruffling some feathers.

 

So, the "truth" is that people are drinking inferior beer and it's up to those that truly know quality beer to enlighten us/all to that fact? Consumers are "the problem" because they buy inferior beer? I suppose all beer quality should be utterly pristine, fitting a template of acceptable made by those that know. This is not possible and beer is like all consumer goods- highly variable in quality and price. Being educated about beer helps individuals make individual and discriminating choices. I think this is true about everything in life. Other people's buying habits are interesting, but they have no bearing on my buying habits.

 

Why are you drinking old beer? A long shelf life is in not a sign of quality, just one that is pasteurized. Beer is food, meant to be consumed fresh, with the exception of some bottle conditioned, big beers. Something to be said for batch consistency, but there are variables in malt and hops too.

 

I wouldn't put it so cynically and I certainly won't go walking around my local beer store telling people what is good or not. But on a website dedicated to craft beer with users who have a generally higher understanding of beer, I think it is reasonable to point out potential quality issues among smaller breweries, which even the Brewers Association members acknowledge, and help people use the correct terminology when talking about quality. What they do with that information is on them.

 

The better craft breweries pay attention to O2 throughout the process and have low packaged O2. With some bottle conditioning, those beers can last longer. The local small brewery, not so much, so drink as fresh as you can.

 

That's fair for sure. Still, I find it interesting that some think that inferior beer is taking up space, limiting better beer choices. I find this to be more true in less "hands on" large retail, and not a problem with better independent and knowledgeable retailers. Our quality choices truly have never been better. Also, I am very curious about why so many seem to have seemingly anti-local thinking. Not you, but many.

 

This is an age old topic that tends to root itself out in these threads. I think @Ranbot summary is probably spot on. Regardless of how much "we" think a beer is flawed or of poor quality, if it is selling it will take up shelf space. But I also think this will work its way out in the long term. 2 years ago we had a local brewery shutter its doors, general consensus was the beer was not that good, they didn't have much of a taproom presence and when better local beer started showing up on the shelves, they just couldn't remain competitive. This year a brewery in the northern part of the state ended up pulling their cans from distribution and are now just selling them on premise, they have a nice taproom and can generate income on that plus selling their beer on site. I think we are going to start seeing more of this.

 

You are talking about 3 different concepts here, but calling them all the same thing (quality), which they are not. The first (batch to batch consistency) is quality control, not quality. You can make a low quality product but have good quality control (batch to batch consistency).

Consider, for example, Company A and Company B. They both produce that rubber ball and paddle game. Every one of Company A's products breaks on exactly the 100th hit. Company B's, meanwhile, breaks somewhere between the 1000th and the 1500th hit. Company A has great Quality Control. They manufacture the exact same product in the exact same way every single time. Company B doesn't have the consistency that Company A has, but they have better quality. You can't predict when Company B's game will break, but you know that it will last at least 10 times longer than Company A's. That is quality.

Your second point (lasting 3-6 months) also doesn't define quality. The length of time that a perishable product lasts has nothing to do with quality and often times contributes to a lower quality product. I could go out today and catch a load of fish. Half of the fish I freeze, the other half I keep fresh. Putting fish in the freeze kills the texture and makes for a lower quality product, but hey I can eat it in 6 months. The fresh fish is a higher quality product, but has to be eaten in a couple days or else it goes bad. Just because a company does something to make their perishable product last longer on the shelves does not mean they have created a higher quality product.

Your last point is the closest you get to actual quality: being able to put out a product that compares well to other similar products. Anybody can be given water, malt, hops, and yeast, but what individuals do with those components is widely variable. Putting out a quality product in the beer world typically mean creating a tasty beer that people go back for because of the flavor.

 

I know. The good news is that good beer keeps coming down the pike, local and otherwise.

 

Agreed on choices and quality has improved for many brewers. And on the topic of Stone, I think they deserve a ton of credit for their Enjoy By IPAs for raising awareness of beer quality/freshness that has improved beer for us everywhere.

Regarding the anti-local sentiment, in the last ~4 years the beers I've had with noticeable quality issues (e.g. oxidation, infection, diacetyl, etc.) are predominantly small breweries within 50 miles of my house. So, if others have similar experiences in their areas it leads to widespread anti-local vibe.

Improving the quality of beer is an expensive investment for brewers, more so the smaller they are, but I still want more brewers to make those investments, particularly for packaged beer. So my frustration with consumers buying poor quality beers (regardless of locality), is brewers have less incentive to invest in their quality control; and the brewers who do invest in their quality (like Stone) are harder to find on the shelf.

Or as the Brewers Association Paul Gatza has stated to his peers at the 2014 Craft Brewer's Conference, "While top end of quality continues to improve, there are some cracks with new brewers....Many of you [brewers] have devoted your lives to building this industry. So don't fuck it up!"

 

That's an interesting point to me, because I feel like I see the exact opposite (large craft v small craft) locally to me in the Sacramento area. We'll see a big promotional presence of, say, Founders coming to Northern California. Tap takeovers, bottle releases, etc. But after the events, I'll see the same stock of Breakfast Stout or All Day IPA (which came in at the time of that initial push) sitting in the coolers of local retailers week after week. Conversely, it seems like the local brewers who are rolling out slowly seem to be rotating stock much more rapidly through our retailers. While it seems a number of large brewers are pushing to increase distribution of their entire line, the consumers outside their "home region" are primarily interested in special releases, and will stick regional (large or small craft) for everyday purchases.

I may be wrong statistically, but just my empirical observation.

 

The conversation has veered off into deeper and more interesting angles than this, but my thinking keeps coming back to simply price and variety. Even with all the great local beer I'm lucky enough to have in my area, I still buy a lot of Sierra Nevada because it's cheap and they put out interesting mixed 12 packs (and obviously it's great beer). Stone costs nearly twice what SN does and doesn't have near the variety.

I know SN has had their own declines, and obviously Ballast Point did well for themselves with high priced beer, but I can't help but think SN's model is going to be the stronger one for nationally oriented breweries going forward. The economy of scale is the one thing a local brewery is never going to be able to compete with.

 

Pennsylvania has been at brewing good beer for a good bit longer than most states, so it may have been inevitable for some brewers to attempt to capitalize on the growth of craft beer awareness while brewing so so beers. We're lucky here so far. I can think of a few N.C. breweries that I think are mediocre, so we'll see how it shakes out in the longer run.

 

Well, the good news is that even some of the newer, smaller breweries can still learn to produce better quality beer. A small brewery local to me opened up about 2-3 years ago and I visited the tasting room about 5 months after they opened. I drank several of the beers in 8 ounces glasses and every one of those beers suffered from astringency (a brewing flaw). At the time I ‘wrote off’ that brewery. Now a couple of years have passed and they opened a second location a few months ago. I revisited this brewery via their second location and all of the those were cleanly brewed (i.e., no astringency or any other brewing flaws). They even won a medal at the 2016 WBC for their ESB beer.

Another small brewery local to me had the reputation of producing so-so beers. About a year ago they made a decision to hire a brewer that had professional brewing experience (Sly Fox Brewing). I tasted one of their beers for the first time a couple of weeks ago at a beer festival. That beer was very, very good.

To think that newly opened small breweries cannot learn to improve the quality of their beers is short sighted in my opinion.

Cheers!

 

It's not so much that people have anti-local thinking, at least speaking for myself, but it comes off vitriolic because it's reactionary to the fervent nature of the buy-local (at any cost) movement. Just because something is local doesn't inherently make it better, and many people don't see that. To me, a local thing must be as good or better on its own merits before I purchase it over a regional or national brand. I think people make concessions to purchase subpar local items over better national ones, and this frustrates me and possibly makes me come off as anti-local, which I am not as long as the quality is there.