It’s just the latest headline in a 2018 that has been full of them: Lagunitas has laid off 12 percent of its workforce, accounting for more than 100 positions in total, as the overall beer market continues to convulse and contract. The downsizing comes 17 months after Dutch brewing conglomerate Heineken International acquired the second 50 percent stake of the brewery, after first buying half of it three years ago. The layoffs affect every department of the company, which operates its original Petaluma, CA location alongside a huge production brewery in Chicago and a taproom in Seattle. According to CEO Maria Stipp’s prepared statement, Lagunitas just wasn’t keeping up with the challenges of the modern beer market.
“The craft beer market is rapidly evolving and, in many ways, more challenging,” Stipp said. “More breweries, more choices … very much like the late ‘90s when the craft beer segment had similar pressure.”
Not exactly a rosy outlook, but probably a realistic one. As the overall beer market has continued to shrink, growth in the craft sector has slowed to the low single digits—a number that might look okay, but is incongruous with the flood of continued new brewery openings. And as customers have patronized younger, smaller craft breweries, it’s the bigger, older regionals who have been hit hard—from the tribulations of Green Flash this spring to the contractions of breweries such as Smuttynose and Tallgrass.
“I certainly wouldn’t be surprised of actions along these same lines for other companies going forward,” said Tom McCormick, executive director of the California Craft Brewers Association.
The case of Lagunitas in particular is wrapped up in their acquisition by Heineken, which turned heads when first announced because of founder Tony Magee’s strong past condemnation of “sell-out” breweries. At the time, though, many craft beer fans were willing to give Lagunitas the benefit of the doubt—not in the least because Heineken as a company wasn’t detested with nearly the vitriol of the likes of AB InBev. There was also a lot of goodwill for Magee, who founded the company in 1993 and had long been a colorful character within it, before becoming Heineken’s “director of global craft.” Still, Twitter statements like the following certainly haven’t aged well now.
Lagunitas has now irrefutably done exactly that, as these more than 100 positions are eliminated. According to the Press Democrat, Magee said the following of the cuts: “Today was a rough day, as were the last week of considerations.”
We don’t doubt the guy, but we also don’t doubt that “today was rough” is little solace to the hundred-some people who just lost their jobs.
It seems unlikely that this is the last story of this kind we’ll hear in 2018. Here’s hoping that your favorite brewery isn’t next.