New Belgium Says Layoffs Due To Missed Forecast, Not Declining Sales

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A sad day but plenty to look forward to.

Today New Belgium Brewing laid off 28 employees between its headquarters in Fort Collins, CO and its expansion brewery in Asheville, NC.  A press release sent to Brew Studs expresses that the layoff impacted less than four percent of the employee-owned company’s total workforce.

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According to a 2017 Brewers Association report, New Belgium, who is most famous for its Fat Tire Belgian Style Ale, is the fourth largest craft brewery in the U.S. Rather than a decline in sales, the company stated that beginning in 2013 it had expanded its staff to support a brewery about 40 percent larger than it is today. Citing the changing dynamics of the current craft brewing industry, the company decided to make the reduction.

“Today has been a tough day at New Belgium” said CEO Steve Fechheimer.  “We feel deeply for the employees impacted and wish them nothing but the best in the future. Going forward, we will have more resolve than ever to grow our business and create value for this 100%-employee owned company.”

This news comes on the heels of other activity in the U.S. craft brewing industry which some speculate amounts to a craft beer slowdown. In January, both San Diego’s Green Flash Brewing announced it was laying off 15 percent of its workforce and pulling back sales from 32 states, and New Hampshire’s Smuttynose Brewing announced that it was putting its brewery up for auction. New Belgium currently sells its craft beers in all 50 states and says it plans to continue its distribution with no reductions in national sales force or marketing spend.

The last time New Belgium made news at the level of organizational change was in August of 2017 when it entered into a partnership to purchase the assets of iconic San Francisco craft brewery Magnolia Brewing as part of a bankruptcy proceeding. That move made a splash in the industry also due to the fact that it brought legendary brewer Dick Cantwell back into public light — Cantwell being a noteworthy subject of industry shakeup himself after being party to the AB InBev buyout of Elysian Brewing in 2015. Many have said that New Belgium was immune to a similar fate as Elysian due to giving its employees full ownership in 2012.

“Steve, the Board, our management team and I have crafted what we believe to be the best outcome for New Belgium and its employee-owner coworkers,” said Co-founder Kim Jordan. “We have great leadership in place, iconic brands, powerful innovation hitting the market, and strong sales, marketing and brewing teams. All of this makes me more confident than ever in the future of New Belgium.”

The three craft breweries who were reported in 2017 to have larger sales volumes than New Belgium were Sierra Nevada (3), Yeungling (1) and maker of Samuel Adams Boston Beer (2), who recently reported a second consecutive year of declining sales. Some may say that the country’s best selling craft breweries are victims of their own success, and it may be hard to argue that innovation is an easy thing to come by at the top.

The silver lining for the craft beer industry as a whole is that around 50 percent of the more than 6,000 U.S. breweries are still brewing 1,000 or less barrels per year, which means that your neighborhood brewpub could still have plenty of room in the market to grow up and put cans on shelves in your favorite bottle shop.

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