THE GIST
Amidst a number of major transitions for Stone Brewing, starting with Greg Koch’s abdication of the CEO position last year and the loss of brewmaster Mitch Steele in recent months, as well as the opening of their Berlin brewpub and Virginia production brewery, the launch of TrueCraft, taking on a private equity boost, spinning off the Arrogant Bastard brand, and announcing hotel and other hospitality concepts, Stone Brewing Co. has now laid off dozens of employees, which left former brewmaster Mitch Steele “shocked and incredibly sad,” and, only weeks after the announcement of his new brewpub, wondering on Facebook, “How did it come to this?”
WHY IT MATTERS
Many of today’s largest and most popular breweries never imagined a future where they’d be as successful as Stone has been, let alone having to deal with the ramifications of that success. Just last week, Redhook laid off half its production staff amidst declining sales. Sierra Nevada’s sales are down this year as well as Blue Moon and Shocktop. These are all clearly market-driven challenges for legacy brands. But for Stone’s part, that’s created a great deal of cognitive dissonance between its rhetoric, which remains in the revolutionary tradition of the 1990s, and its business actions, which become more and more conventional by the day as the brewery increasingly competes with larger brewing corporations. The battle is shaping these breweries, not the other way around.
This latest move, the laying off of dozens of employees, isn’t necessarily a sign of longterm trouble. It could rather be a large, organically grown organization trying to take a step back and position itself for a bizarre future it never imagined. According to Brewbound, new CEO Dominic Engels refers to it as a "restructuring." If a company is going to pivot and try its best to embrace the opportunity ahead of it, it doesn’t help new leadership to have legacy employees holding it back, and forcing its past commitments to hold true. That’s some cynical shit, I know. But dress for the job you want, as they say.
According to Brewbound, one employee speaking on condition of anonymity said: "You have a well-known brewery with a great reputation that opens two full production breweries — the same size or larger than the original — and right after that goal is attained, they have to lay off a bunch of people in conjunction with bringing on a new CEO? I don’t think that is coincidence.”
More importantly, layoffs like this so soon after Koch touted his $100MM True Craft investment vehicle for smaller craft brewers sends a bizarre message to anyone looking for alternative ways to grow. Koch has repeatedly railed against sellouts, acquisitions, and private equity moves by brewers who wanted to exit or fortify their futures. It’s a game of healthy compromises, not clear wins and losses, at that level. And Stone as an organization seems to be wrestling with those realities more and more, going back on so much of its rhetoric, and now cutting loose many of the actual people who lived through it all. Even now, Stone is blaming "Big Beer" for the slowdown, but also cites the "proliferation of hyper-local breweries."
So Stone continues to fight the battle with the big guys as it always has, but now they're up against a generation of breweries that rushed into the fray to answer their battle cry. Historically speaking, regardless of which industry we're talking about, there's little dignity in being an aging revolutionary when the next generation sees you as the establishment.
— Michael Kiser
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Stone Brewing Restructuring, Lays Off Employees [Brewbound]