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Stone Brewing reportedly lays off dozens of employees

Many of those let go were with the company for years.
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On Wednesday night, as DRAFT’s editors were settling into our usual post-work beers, we received a somewhat cryptic email:

“Wanted to give you guys the heads up stone began the process of laying off roughly 50 of their longest tenured employees today. Many have been with the company over 10 years.” tweet

We were befuddled. Stone is currently the ninth-largest craft brewery in the U.S., having produced more than 325,000 barrels of beer last year, according to the Brewers Association, and it’s expanding at a rapid rate—the brewery opened production facilities in Berlin in mid-September and in Richmond, Virginia in March. Another location in Napa, California is slated to open next year. The timing for a mass layoff seemed … off.

But Thursday afternoon, reports of the dismissals—many of them from the former employees themselves—began to roll in. “Feeling shocked and incredibly sad for many of my friends at Stone Brewing Co. How did it come to this?” former Stone brewmaster Mitch Steele said in a Facebook post. “75+ layoffs. Some of the people that were such an integral part of Stone’s culture—a few of them pre-dated me. I can’t believe it.”

Denise Ratfield, Stone’s longtime receptionist, released her own Facebook post after learning she was being downsized:

“It’s a bellwether day, and one that I did not see coming. Today, along with dozens of others, I was laid off from Stone Brewing. Although it will be a challenging transition after 7 years with a legendary brewery, I know that new opportunities lay ahead. I’m excited to start a new chapter in my career and so very lucky that I am in the best beer community on planet earth. Thanks to all the friends and family I made along the way at Stone that I hold in high regard. You made it wonderful. Let the new adventure begin!” tweet

Stone did not answer calls for comment, but the brewery did release the following statement (emphasis theirs):

“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. tweet

“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. tweet

“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. tweet

“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. tweet

 

Author
Zach Fowle is DRAFT's beer editor. Reach him at zach@draftmag.com.

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21 Comments

  • Tim says:

    I don’t understand how they’re not getting their growth. I see more Stone in the PNW more than I ever have. Not just special releases or AB but 6 packs and so on. While before today I thought of Stone as one of the morally strongest brewers in the country, this seems questionable. A 5% reduction in staff is pretty significant. From the outside it seems like they managed their structure poorly and needed to make a large correction because of that, rather than transitioning roles as needed.

  • WinstonV says:

    This in all likelihood is in preparation for a sellout to some big beer company. They cut staff to show reduced operating costs to be more attractive to buyers. Somebody wants to cash out.

  • Bill Clinton Rapes says:

    This could be a cost cutting measure to help fund the planned hotel complex in Escondido or other expansion.

  • Decay says:

    If I were to wager a guess, a consultant said “hey, if you fire people who’ve been here a lot g time and are presumably making substantially more than people who have been there a shorter amount of time yet doing the same things, you can save a lot of money to open other locations!” Whole Foods Market did something very similar just over a year ago. The corporate culture on a store level never recovered. Stone really live up to the title of “Arrogant Bastard (s)”, I think it’s the massive expansions that’ve hurt them the most. But that’s just me.

  • Kevin Gibbs says:

    This better not be in all likelihood be in preperations to sell out to big beer….Stone is my Favorite Brewer…they are the reason i drink craft brew.

    • Jeff T. says:

      Typical pre acquisition strategy. If wrong in 6-9 months, I will drink Budweiser. Everything they stated, correct corporate, HR, must haves. In the end people will cash out for millions. I’m sure they have pours their blood and sweat for that. It’s bitter sweet…

  • George B says:

    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

    • Stewfnrocker says:

      What people do not realize is, that yes craft beer is the counter culture to big beer conglomerates, BUT at the end of the day, it is a business where owners rely on that business to support their families and themselves. It is hard for some of these craft beer companies who are seen as the stepping stone/forefather’s to many’s craft beer hobby/passion to be fresh or inventive when nano and craft breweries are popping up at an alarming rate. These new breweries eat away at company’s shelf space in stores as well as draw interest from craft beer fans to try new things. Think of it this way, in 1996 (20 years ago ) there were 360 microbreweries and in 2016 there are over 2,400(that’s just microbreweries, not included are the brewpubs/nanobreweries). All that additional competition, and that is what it is, competition, eats away at revenue.
      Yes the increase in competition is partially to blame, but I also blame Stone for the bad decisions to grow beyond their means. They opened up a facility in Virginia, great decision to get East coast presence and to ship product quicker and cheaper to their east coast markets. However terrible decision, opening up a brewery/facility in Berlin Germany. This is what you call, not understanding the market. The majority of beer drinkers in Germany do not have the palette for hoppy beers. Maybe they are banking on younger germans to carry their brand, but from what I understand, since the facility has opened, it is typically empty. I do not know their beer distribution sales, but if their performance at the brewery/restaurant is an indicator, it isn’t doing well.
      So, to totally trash Stone for blaming market saturation for the reason for cutting staff, is not a farce, the proof is in the numbers. Stone caused part of the bleeding for themselves, however at the end of the day, craft beer is a business. Owners lives and money are at stake for the products they produce. People wouldn’t open up a brewery to sell beer to the public if they didn’t think they couldn’t make money. At that point it isn’t a hobby where you make beer for your friends in your garage/kitchen.

  • Dmax808 says:

    While Stone may not have managed the business in an optimal way, things change. I doubt any of the detractors or commentors here understand how difficult it is to run a business.

    • George B says:

      I speak for the group when I say that we understand that it’s hard to run a business. What isn’t hard is treating your employees with respect, and paying them a fair wage. Stone is a revolving door when it comes to employees for their general disregard for these things. Hell, I worked there for 2 years and went through 4 bosses.

      Sure, at the end of the day, this brewery is just a business, but it’s also a craft business, vastly out of touch with the world that it help create 20 years ago. It’s not hard to understand their failure if we take a hard look at their internal restructuring, which started years before yesterday’s layoffs, their careless spending, and their desperate attempts to stay current in a quickly changing market. See my comment above if this doesn’t make sense.

  • If Stone is over producing then why are they not releasing across all of Mississippi in November? My store won’t get any until February while Jackson area gets it in November. Mississippi is the easiest state to enter. 9 distributors, no license fee for out of state breweries.

  • Greg says:

    One of the great things that makes craft beer special is the fact that these breweries are families and are employee driven. Stone lost this many years ago by Greg Koch’s drive to become one of the largest craft breweries in the world and his bully pulpit to fight the corporate beer giants. The sad thing is, they’ve lost sight of what made them and their beer special in the first place, their people. It was their people that help make that incredible culture. Breweries like Russian River brewing, owned by Vinny Cilurzo, have refused to become that monolithic craft brewery at the expense of their employees and his lifestyle. He continues to brew some of the most highly sought after beer on the planet, while maintaining a brewery size where he can take care of his own. Stone has put growing and expanding over taking care of its dedicated employees who have sacrificed making better money elsewhere to help a once small craft brewery grow. Lose sight of the ones who helped you get where you’re at and they will quickly lose that good will atmosphere in the craft beer community, which I think they have. In my opinion, they are no different than Ballast Point or Lagunitas who sold to larger companies. At least BP and Lagunitas where up front about their intentions and they’re not pretending to be something they’re not. Stone say’s they strive for independence, but they make business decisions no different than the macro beer guys do now. If it looks like a duck, walks like a duck, and quacks like a duck, guess what? It’s a duck. RIP Stone Brewing as the local family oriented craft brewery that put its own employees first.

  • jimmyd2 says:

    No mention of trying to transition these employees to other vacant positions within their organization or to their nearby Liberty Station location or details on severance. There’s more to the story than was reported.

  • Dennis K says:

    I think this is just a sign that the craft beer bubble is starting to burst but not in the way the bigger guys expected. It was assumed that when the craft beer bubble burst that the larger craft brewers would survive and the smaller players would die out. However it appears that the small locally owned and operated mom and pop craft breweries are thriving while the bigger players are looking at smaller and smaller market share as people spend their money on local beers in their local market. Stone’s glory days are long gone, no one cares about them anymore. Their beer has turned into mass produced product.

  • David Ruybalid says:

    Typical corporate trickery. The management people have to maintain their current lifestyle. They still have to pay for the country club ,Mercedes and vacation homes.

  • Fabreezio G. says:

    Greg Koch is a fake piece of sh*t and anyone who works with/for him knows this to be true.

    Really can’t see them selling to big beer after everything G.K. has said and done.
    Personally I think this is purely a money saving move with all their massive projects slated to open soon.

    Either way, bad move on his part.

  • Scott says:

    Greg Koch is a pretentious phony, but I will never blame a company for trying to make as much money as possible, they owe that to themselves, their investors and their employees. With that said though it’s sad to see a “craft” brewery run their business so recklessly that they’re willing to fires dozens of employees. I worked for a private company worth over $10 billion that has been around since the 50’s and has slowly expanded their market share since. Guess what? They haven’t laid off a single employee during their entire existence. During that whole time they paid their employees at least 50% more than their competitors.

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