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10/02/2018

Lagunitas Layoffs, 12% Across Board; “We Know How to Weather the Storm,” Sez Maria

This latest layoff, even more so than all the others, is a symbol of craft’s current, more difficult moment.  Yes, even Lagunitas, the most hi-flying and fastest growing craft-brewer during 2010-2015 go-go yrs, is not immune to the intense competition and fragmentation in craft.  Lagunitas sales have basically flattened out in US. That’s still better than a lot of its large craft brethren. But unfortunately, it staffed up expecting continued rapid growth, which is not materializing in new environment.

Layoffs are 12% of workforce across all departments, CEO Maria Stipp told Craft Brew News, tho “primarily non-commercial,” she added. She declined to specify total number, but CBN understands it’s between 75-100 folks (~900 employees as of Sep 2017).  With craft “rapidly evolving” and becoming “even more challenging,” including “freight pressures,” Lagunitas made this “difficult but necessary decision,” according to Maria. It’s “not taken lightly” and Lagunitas made “every effort to do it in the right way.”  Maria (like founder Tony Magee) sees a lot of comparisons between what’s happening now and what happened in the late 1990s, when craft stalled for about 7 yrs, but Lagunitas “weathered the storm. We know how to weather the storm,” she said.

Lagunitas still looking to “drive” flagship IPA with “increased investment,” Maria said, as it seeks to maintain “#1 seed” in IPA, which is “not easy to do.”  Lagunitas will launch 19.2 oz cans of flagship IPA, CBN understands, and also roll its Daytime IPA in 6-pack cans nationally early next yr. It’s been reformulated as a light beer, 98 calories and 4% ABV.   Lagunitas still up 2.5% yr-to-date thru Sep 9 in IRI multi-outlet + convenience. But its flagship IPA, still about half its biz, down 2.3%. And Little Sumpin’ Sumpin’, nearly 20% of volume, down 3%. So growth coming from elsewhere, including newer brands like Little Sumpin’ Easy.

Lagunitas is of course owned by Heineken. Its layoffs follow major layoffs at Ballast Point, owned by Constellation, by just a couple of months.  And announced just yesterday, longtime AB prexy of High End Felipe Szpigel will be moving on (see below), after presiding over the acquisition of lotsa craft partners, ramping up and then dismantling its High End org.  So most of giant corporations that invested in craft have already had to scale back. Did they overplay their hand?

Or maybe this is just a sign of the times. Another big CA craft brewer, Stone, kicked off series of layoffs 2 yrs ago, shortly after Dominic Engels joined as CEO.  Since then, other significant cuts at New Belgium, Summit, Green Flash and more are only the most visible and sizable examples of a dramatically changed environment.

Publishing Info

  • Year: 2018
  • Volume: 9
  • Issue #: 89
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