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Green Flash cuts staff, stops shipping to 32 states

"The market is nothing like it was when we started."

Green Flash was the country's 37th largest craft brewery in 2016.
Green Flash was the country's 37th largest craft brewery in 2016.

Amid a new round of layoffs, the first San Diego craft brewery to sell beer in all 50 states has announced it will no longer distribute to 32 of them.

Place

Green Flash Brewing Co.

6550 Mira Mesa Boulevard, San Diego

Green Flash Brewing gives the number let go at 15 percent, including employees at both its San Diego brewery and the one it opened in Virginia in 2016. Reporting by West Coaster magazine and the Brewbound website indicate 33 employees were let go from sales, administrative, and operational positions.

The news comes almost a year to the day since 25 Green Flash employees were laid off in January of 2017 — estimated at the time to be a 10 percent workforce reduction.

Green Flash stated in a press release that its plan will be to limit distribution to regional markets within easy reach of its breweries — which will also include Nebraska, once a previously announced Green Flash brewpub opens in the town of Lincoln later this year.

At the time of the press release, Green Flash said its San Diego brewery would distribute to Arizona, California, Colorado, Hawaii, Nevada, Texas, Utah, and Nebraska. The Virginia Beach brewery would ship to Delaware, Maryland, New Jersey, New York, North Carolina, Ohio, Pennsylvania, Tennessee, and Virginia.

The press release cites these East Coast states as comprising the company's fastest growing sales region. Reached by phone, Green Flash founder and CEO Mike Hinkley stated, "We had the biggest chunk of our market — about 82 percent — in the states we kept." He then added that, as of Tuesday (January 16th), the decision had been made to continue distributing to Connecticut after all. "It's probably 83 percent now."

He said the remaining 17 percent of sales were untenably split among the 32 states no longer in the brewery's plans. "They were in pretty steady decline," Hinkley said. "We were spending far too much in sales and marketing activities." He attributed the "hard decisions" to cut staff to that 17 percent loss in revenue.

Hinkley acknowledged that this is "definitely a step back" from the company's previous aspiration to be a national brand, but he no longer believes marketing to 50 states is attainable for a brewery with Green Flash's resources. "A brewery with greater resources, possibly one bought out by a big corporation, could make that leap," he speculated. "For an independently owned brewery, that ship may have sailed."

Asked to address rumors that arose last year suggesting Hinkley was looking to sell Green Flash to corporate interests, he said, "It's not a plan, to sell the company. That's for sure." He stopped short of saying it would never happen, citing the unpredictability of a rapidly changing craft-beer business. "The market is nothing like it was 2 years ago, 5 years ago, 15 years ago, when we started," he said. "Green Flash is still a good, strong business…but it remains to be seen whether we can survive as an independent brewery."

As of 2016, the Brewers Association counted Green Flash the 37th largest craft brewery in the nation and the second largest in San Diego; 2017 marked its 15th year in business. It purchased the East County brewery, taproom, and restaurant Alpine Beer Company in 2014, and notes no employees of those Alpine properties will be impacted by the layoffs. Nor will retail employees at Green Flash tasting rooms.

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Green Flash was the country's 37th largest craft brewery in 2016.
Green Flash was the country's 37th largest craft brewery in 2016.

Amid a new round of layoffs, the first San Diego craft brewery to sell beer in all 50 states has announced it will no longer distribute to 32 of them.

Place

Green Flash Brewing Co.

6550 Mira Mesa Boulevard, San Diego

Green Flash Brewing gives the number let go at 15 percent, including employees at both its San Diego brewery and the one it opened in Virginia in 2016. Reporting by West Coaster magazine and the Brewbound website indicate 33 employees were let go from sales, administrative, and operational positions.

The news comes almost a year to the day since 25 Green Flash employees were laid off in January of 2017 — estimated at the time to be a 10 percent workforce reduction.

Green Flash stated in a press release that its plan will be to limit distribution to regional markets within easy reach of its breweries — which will also include Nebraska, once a previously announced Green Flash brewpub opens in the town of Lincoln later this year.

At the time of the press release, Green Flash said its San Diego brewery would distribute to Arizona, California, Colorado, Hawaii, Nevada, Texas, Utah, and Nebraska. The Virginia Beach brewery would ship to Delaware, Maryland, New Jersey, New York, North Carolina, Ohio, Pennsylvania, Tennessee, and Virginia.

The press release cites these East Coast states as comprising the company's fastest growing sales region. Reached by phone, Green Flash founder and CEO Mike Hinkley stated, "We had the biggest chunk of our market — about 82 percent — in the states we kept." He then added that, as of Tuesday (January 16th), the decision had been made to continue distributing to Connecticut after all. "It's probably 83 percent now."

He said the remaining 17 percent of sales were untenably split among the 32 states no longer in the brewery's plans. "They were in pretty steady decline," Hinkley said. "We were spending far too much in sales and marketing activities." He attributed the "hard decisions" to cut staff to that 17 percent loss in revenue.

Hinkley acknowledged that this is "definitely a step back" from the company's previous aspiration to be a national brand, but he no longer believes marketing to 50 states is attainable for a brewery with Green Flash's resources. "A brewery with greater resources, possibly one bought out by a big corporation, could make that leap," he speculated. "For an independently owned brewery, that ship may have sailed."

Asked to address rumors that arose last year suggesting Hinkley was looking to sell Green Flash to corporate interests, he said, "It's not a plan, to sell the company. That's for sure." He stopped short of saying it would never happen, citing the unpredictability of a rapidly changing craft-beer business. "The market is nothing like it was 2 years ago, 5 years ago, 15 years ago, when we started," he said. "Green Flash is still a good, strong business…but it remains to be seen whether we can survive as an independent brewery."

As of 2016, the Brewers Association counted Green Flash the 37th largest craft brewery in the nation and the second largest in San Diego; 2017 marked its 15th year in business. It purchased the East County brewery, taproom, and restaurant Alpine Beer Company in 2014, and notes no employees of those Alpine properties will be impacted by the layoffs. Nor will retail employees at Green Flash tasting rooms.

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