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Responding to slowing sales and a “challenging and “rapidly evolving” beer market, Lagunitas Brewing laid off at least 100 US employees on Tuesday.
And although many no longer consider the Heineken-owned Lagunitas a true ‘craft’ entity anymore, these layoffs speak to tougher times for beer in general.
In a statement from Lagunitas’ CEO Maria Stipp posted on the company’s website, Lagunitas said it would cut 12% of its staff “across all departments,” a decision that comes 17 months after Dutch brewing giant Heineken International acquired full ownership of Tony Magee’s homegrown brewery company.
“We do not take this lightly and are making every effort to do it in the right way, as these actions impact our valued co-workers, friends and community who have contributed to our tribe story.”
But tribal allegiances can fall to the wayside when you’re now wholly-owned by an international brewery confronted with faltering beer sales.
The announcement follows a series of new and experimental non-beer product launches in the US, including an IPA-flavored water and non-alcoholic, cannabis drink infused with the psychoactive compound THC.
According to Stipp the company is taking steps to drive Lagunitas’ flagship IPA….but admits to difficulties…
“Despite over 7,000 breweries in the U.S., all of which make 3-4 IPA’s, maintaining this spot isn’t easy.”
Heineken completed its purchase of Lagunitas in May last year. It had acquired a 50% stake in the brewer in 2015 and since then has worked to expand Lagunitas’ global presence, expanding existing markets in the UK, Canada, the Netherlands and Japan and opening up new markets in France, Mexico, Italy and Spain.
There are several inescapable takeaways from this week’s layoffs at Lagunitas, the most obvious being that with more breweries than ever before and its overall sales slowing, the craft beer industry is, as Bart Watson, Chief Economist for the Brewers Association politely put it “maturing.”
And if you think the craft beer business feels as vital as it did a decade ago, you either weren’t around or you’re kidding yourself…
Big brewers like Heineken and AB InBev are feeling beer’s more challenging environment and acting defensively, which in essence is what the Lagunitas layoffs earlier this week were about.
And unfortunately we expect that to see a number of craft beer majors making similar moves in the coming year.
