"Team Stone" representing Stone Brewing at October's Great American Beer Festival.
  • "Team Stone" representing Stone Brewing at October's Great American Beer Festival.
  • Photo from Stone Brewing Co. Facebook page
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On Thursday October 13, Escondido-based Stone Brewing laid off approximately 5 percent of its work force. San Diego's largest brewery by sales volume, the company counted roughly 1200 employees on payroll prior to the layoffs, and though it declined to give an actual number of people let go, it appears to be at least 60 people, with some outlets suggesting the number is higher and includes longtime employees.

Stone celebrated its 20th anniversary in business this year, opening new brewing facilities in both Berlin, Germany and Richmond, Virginia, and announcing a new brewpub to open in Napa, California. It also announced the creation of the True Craft fund, designed to invest in the expansion of smaller breweries. At the end of August the company hired a new CEO to replace outgoing CEO and cofounder Greg Koch.

Dominic Engels had been president of juice company POM Wonderful prior to taking the new role at Stone. In a press statement regarding the layoffs, Engels said, "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."

He went on to attribute the slowdown to market forces impacting the craft beer market from both above and below. "The larger independent craft segment has developed tremendous pressures," he said, "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."

Responding to a question as to whether the layoffs reflect an end to Stone's increasing production, Greg Koch — now speaking for Stone under the title executive chairman — said, “Stone is projecting increases in production next year, albeit more modest increases than we’ve experienced in the past."

Stone Brewing Co.

1999 Citracado Parkway, Escondido

In other words, the layoffs reflect a decline in domestic growth rather than a decline in actual sales or production. And the decline in growth is being attributed to increased competition from craft companies that sell to large corporations — such as Ballast Point being purchased by Constellation Brands last year — and to the increase of small craft breweries in the U.S. absorbing market share. The number of craft breweries within the U.S. has more than doubled in the past five years, exceeding 4000 at the end of 2015. In San Diego alone, nearly 90 new breweries have opened since 2011.

Engels added that, "This reduction was not a reflection of the work [these employees] did, but a careful decision made to ensure that our company will remain competitive and profitable." He stressed that, despite the workforce reduction, "Stone remains one of the largest — if not the largest — employers in the craft brewing segment," and that, "no additional layoffs are expected within Stone’s foreseeable future."

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Comments

Visduh Oct. 14, 2016 @ 8:03 p.m.

All the doublespeak coming out of Stone says nothing about these layoffs. The real reason is that there's a new guy at the helm, and he may have some strong likes and dislikes that manifest themselves in wanting to shed employees. If the company is really growing--and that's the real puzzle--why cut employees?

If things are no worse than described by Engels, there was no need to cut expenses that way. No, Ian, there's more to the story, and Stone will keep it under wraps now and in the future.

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Ponzi Oct. 14, 2016 @ 10:03 p.m.

The expansion is so ambitious. Building in Germany is so "in your face." The "beer oriented hotel." Greg Koch and his arrogant attitude and self-promotion... "I'll never sell out!"

This company is either having a major capital problem because of its manic expansion or it is packaging itself for sale. Growing companies do not start cutting staff in a "realignment."

I've been around to know that this is just a simple case of "bad news" and the news will probably not get better for a long time before it gets good. Unless they are bowing at the alter of a big beer money buyout. If that happens, you know who can go to hell.

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Visduh Oct. 15, 2016 @ 7:35 a.m.

Agreed. Actually, I didn't care for their beers, and I'm always looking for a new brew. And I wasn't impressed by the restaurant in Escondido either. My take on Stone was less of an operation with a passion for its product, and more of a promoter building an empire. The notion that it is being packaged for sale to Big Beer sounds about right. After that buyout of Ballast Point for a huge price, I think we can look "forward" to others of this genre selling out for $ billions. That's sad, because they really did reform brewing, and made beer something interesting.

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dwbat Oct. 15, 2016 @ 12:07 p.m.

Hey, there are still great opportunities at Stone Brewing. They are hiring a dishwasher in Escondido (via their website)!

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SportsFan0000 Oct. 18, 2016 @ 10:29 a.m.

New guy is brought in to cut costs and tidy up the balance sheet for a potential sale to one of the bigger, deeper pockets breweries...Same old Story only different company/different industry..

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FlbrkMike Oct. 18, 2016 @ 1:13 p.m.

So they're bringing this guy in from POM Wonderful. Does that mean they're going to start using recycled fracking water? Do end runs around California's drought management? Clear cut a few oak forests? Market Arrogant Bastard as a health food?

http://www.motherjones.com/environment/2016/04/lynda-stewart-resnick-california-water

http://www.latimes.com/business/hiltzik/la-fi-hiltzik-justin-bulldozes-20160622-snap-story.html

http://articles.latimes.com/2010/aug/18/business/la-fi-hiltzik-20100818-1

I guess we can hope that one reason he left Wonderful is because of some of the crap the the Resincks have pulled. I've had a lot of respect for Stone and their values over the years. Now I'm not so sure.

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