Stone Brewing Announces Major Company Layoffs

RIP Stone Levitation Amber

The 10th largest craft brewery in the United States, Stone Brewing Co. has shocked the industry today announcing a layoff of 5% of its staff. According to some insiders like former Brewmaster Mitch Steele himself, that accounts for 75+ jobs and comes at a time when Stone has been announcing expansion after expansion, from the upcoming Stone Hotel and Stone Napa to Stone Berlin.

Stone co-owner and former CEO Greg Koch may have a lot to answer for after taking a backseat at the company to start his own investment firm for craft breweries and bragging about growth. This seems like a classic corporate infrastructure change to increase profitability, the type of thing that is not supposed to happen in the small independent craft brewing world. It’s a perfect example of overambition that leads to a desire to keep the profits up at the cost of the little guy. Layoffs are almost expected at a publicly traded company that is beholden to its shareholders to make money, but an independent company is supposed to be able to avoid them because it values the culture and integrity of the brewery over the money.

Former and recent Brewmaster Mitch Steele posted on his facebook page, “Feeling shocked and incredibly sad for many of my friends at Stone Brewing Co. How did it come to this?”

I have always been a bit skeptical of Stone’s top level management. Greg Koch always talked a lot of trash on macro breweries and lager beers, only to release his own “Wussie Pils” and often sound like a corporate overlord himself. The official statement from Stone Brewing partially blames a slowdown on “pressures from Big Beer,” ironic considering the move seems like one that big beer would make, not a small independent craft brewer.

UPDATE: Just heard from a credible source that Oregon’s Portland-based Stone sales rep was one of those laid off. Expect a big slowdown of Stone in Oregon!

Stone’s official word on the layoffs is below:


(Escondido, CA) – Due to an unforeseen slowdown in our consistent growth and changes in the craft beer landscape, we have had to make the difficult decision to restructure our staff. Unfortunately, this comes despite a year that includes the incredible accomplishments of opening two new breweries, which are ultimately expanding the availability of Stone beers and boosting the reputation of American craft beer in Europe.

Stone Brewing 2015 Logo

More recently however, the larger independent craft segment has developed tremendous pressures. Specifically, the onset of greater pressures from Big Beer as a result of their acquisition strategies, and the further proliferation of small, hyper-local breweries has slowed growth. With business and the market now less predictable, we must restructure to preserve a healthy future for our company. Even given this unfortunate circumstance, we will continue to be fiercely independent and, importantly, Stone remains one of the largest – if not the largest – employers in the craft brewing segment.

It is crucial to recognize that this decision was made after much careful consideration. Approximately 5% of all team members were affected, and they were offered a substantial notice period and career transition services. The team members no longer with our company are talented, committed individuals who have held important roles in our organization, and we expect that their talents will be in high demand. This reduction was not a reflection of the work they did, but a careful decision made to ensure that our company will remain competitive and profitable. No additional layoffs are expected within Stone’s foreseeable future.

In summary, we want to emphasize the following points:

  • This year, we completed several significant investments that have been in the works for a number of years.
  • A recent decline in domestic growth for the category and for Stone has forced us to restructure in order to preserve our independence in an increasingly competitive category.
  • Stone remains one of the largest – if not the largest – employer in the craft beer segment and remains dedicated to providing our fans with fresh beer
Samurai Artist
Samurai Artist

Founder of The New School and most frequent contributor Ezra Johnson-Greenough has worked in the craft beer industry for almost 10 years, doing everything from illustrating beer labels to bartending at renowned beer bars and breweries like Belmont Station, Apex, Laurelwood and Upright Brewing. He has also had a hand in creating events like the Portland Fruit Beer Festival, Portland Beer Week, and the Brewing up Cocktails series. He is available for freelance consultation in marketing, events, graphic design and branding. Contact: SamuraiArtist@NewSchoolBeer.com

Discussion

  • Mark Reber
    Mark Reber
    Fri Oct 14, 2016 12:15 AM

    I’m no apologist for Stone. I don’t drink their beer, but I wouldn’t turn one down, either. But, whatever the motivations for the layoffs, which are sad, the market conditions he describes are real. Recall that Craft Brewers Alliance just announced layoffs in Seattle, albeit for different reasons. The market is bound to become more competitive as more and more breweries expand and open. It will continue to put pressure on brands. There will be a ceiling at some point even if we haven’t reached it yet.

    • George B
      George B
      Fri Oct 14, 2016 2:16 AM

      If we read between the lines, we will quickly realize that the restructuring isn’t about Big Beer, or “ultra-local” beer, whatever that means (it’s also a pretty cowardly move on Stones part to try and deflect the blame onto their fellow craft beer comrades, many of whom they distribute for, I might add). No. This restructuring is about years and years of Stone’s careless hiring, an unfocused and seemingly random game plan, and a blatant disregard for employee’s satisfaction and well-being. I speak for the vast majority of Stone expats when I say that the employees at Stone were never a top priority for the company. Ask anyone who worked there, or still works there for that matter, and they will tell you that they are underpaid and overworked. Morale within the walls of Stone is often shockingly low, I’m sure lower after today. The real sadness about this though, is that the people in charge of making these careless decisions won’t at all be affected by their actions.

      Over the last many years, I’ve watched as Stone has quietly transitioned from a company who’s bottom line is focused strictly on the quality of their products, to a company who’s bottom line is focused strictly on the amount of money coming through the door at the end of the day. This transition is a sad, and all too common reality in the current craft beer world. It’s sadder to see companies as monumental as Stone fall for the same hook. The beauty of being a part of a craft industry is that we don’t have to focus our bottom line on money. We can instead focus on innovation and passion, and let the money come second as a result of those things. When a craft company becomes about the money, they may as well not even bother to call themselves craft anymore. Stone is a perfect example of this, especially as they flail to keep the illusion that they will continue to remain “fiercely independent” despite recently reaching a sizable deal with a private equity firm.

      I hope that the news today sheds a little bit of light on the ugly underside of Stone’s giant and intimidating façade. It’s a disappointing reality who’s exposure was a long time coming