Layoffs At New Belgium Brewing

Belgium, Layoffs At New Belgium Brewing

New Belgium Brewery – Ft Collins

On Friday, New Belgium Brewing announced that they’d let go of 28 employees. And although it’s always painful to hear about job cuts we weren’t surprised by their announcement…And unfortunately we expect to see other craft beer majors taking similar defensive actions in 2018.

And let’s be clear, New Belgium’s cut-backs weren’t major. They let go of less than 4% of their staff between their Fort Collins, CO, and Asheville, NC operations…

But still, they did what they did because they felt that had to…And that speaks volumes as to how the craft beer biz is evolving  in the face of slowing demand.

So far layoffs of any scale have been a rarity in the craft beer biz…but that could be changing.

New Belgium, the nation’s fourth largest craft brewery clearly decided that they needed to get leaner, especially in light of the industry’s slowing momentum.

Beginning in 2013 they staffed up considerably to address a growing market that according to New Belgium’s press release that was expected to be 40% larger than it is today.

40%…It’s a credit that New Belgium, a 100% employee-owned brewery, was able to limit the carnage to 28 bodies.

And faced with the task servicing a 50 state distribution model…now under assault by a growing number of smaller and more nimble local players who are increasingly being seen as more vital than many breweries with a larger national profiles (fair or not)…it’s a wonder that New Belgium kept the number of people they let go to under 4%.

Belgium, Layoffs At New Belgium BrewingAccording to The Coloradoan, New Belgium, which currently maintains more than 700 employees across the country…brewed more than 900,000 barrels of beer in each of the past four years,” a number they expect to duplicate in 2018.

And in spite of what their press release referred to as “industry headwinds,” (read: more than 6000 breweries currently online and craft beer’s slowing sales numbers) New Belgium’s product sell-through at retail grew in 2017 which is good…

Just not good enough to avoid Friday’s layoffs.

 

A press release with additional restructuring details is included below….

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 New Belgium Realigns Fort Collins and Asheville Workforces to Match Growth Expectations

(Fort Collins, CO)

New Belgium made the difficult decision to let go 28 employees between our Fort Collins, CO, and Asheville, NC operations which represents less than 4% of our workforce. These changes were not driven by a decline in our business; in fact, our depletions grew in 2017 vs. 2016 which is admirable given industry headwinds. However, beginning in 2013, we expanded our staff to support a brewery about 40% larger than New Belgium is today, and we haven’t yet achieved our goals in the face of changing dynamics in craft brewing.

Despite these employee reductions, we will grow our business to create value for our employee-owners. New Belgium remains firmly committed to being a national brewery and will continue full operations at our two breweries and distribution to all 50 states and many international markets. It should also be noted that today’s actions have not reduced our sales force nor our marketing spend. We will continue to invest in building our business – a 100% employee-owned B-Corp focused on making world-class beers – as we believe this is highly relevant to today’s beer consumers. If we want to further our vision of what craft brewing can be, and still remain an innovative brewer, we have to ensure we have the right cost structure in place.

“Today has been a tough day at New Belgium,” said CEO Steve Fechheimer. “We feel deeply for the employees impacted and wish them nothing but the best in the future. Going forward, we will have more resolve than ever to grow our business and create value for this 100%-employee-owned company.”

Co-founder Kim Jordan added, “As leaders, we balance the needs of the organization with our care and respect for all of the people within. Always a difficult task. Steve, the Board, our management team and I have crafted what we believe to be the best outcome for New Belgium and its employee-owner coworkers. We have great leadership in place, iconic brands, powerful innovation hitting the market, and strong sales, marketing, and brewing teams. All of this makes me more confident than ever in the future of New Belgium.”

 

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