Stone Brewing CEO After Laying Off 5% of Its Employees: “I Have Been Charged With Keeping Stone Independent”

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Brewers, journalists, and beer drinkers alike are abuzz over the news that Stone Brewing laid off about 5 percent of its workforce last week. At least 55 employees, some of whom had been with the company for over a decade, have been affected, though all were given a "substantial notice period, including 60 days paid salary (more for those with extensive tenure) and career-transition services."

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But the cutbacks come at a peculiar time for the independent craft brewery — one of the ten largest in the U.S. — as Stone is in the midst of international expansion on a massive level. The brand recently completed a $25 million brewery in Berlin, opened a $75 million brewery in Richmond, Virginia, plans to open a 10,000-square-foot brewpub in Napa, and has licensed its name to a $26 million beer-themed hotel in Escondido, California. All of which, when paired with the most recent news, begs the question: Did Stone get ahead of itself?

For Stone to sell to a corporation like AB-Inbev or Constellation would be like Bernie Sanders suddenly announcing his allegiance to the Republican party.

"That’s impossible to answer with a 'yes,' or 'no,'" replied Dominic Engels, Stone Brewing CEO, over email. "Our plans for expansion were laid out long before the recent pressures to craft beer were being felt. We’d been experiencing double-digit growth year over year for each of our first 20 years, which has now slowed to single digits. We’re confident that seeing these large projects to fruition was the right choice for Stone’s future, as they provide us with the ability to be competitive going forward."

Last week, in an official press release, Engels had specifically pointed to Big Beer's "acquisition strategies, and the further proliferation of small, hyper-local breweries" as Stone's unexpected roadblocks to further growth. "With business and the market now less predictable," he'd written, "we must restructure to preserve a healthy future for our company."

So, simply put, Stone just isn't selling as much beer as its leaders thought it would. But later in the same press release, Engels phrased the same notion slightly differently:

"A recent decline in domestic growth for the category and for Stone has forced us to restructure in order to preserve our independence in an increasingly competitive category."

And thus, message boards and social media lit up with charges that "selling out" to Big Beer might have been on the table if not for downsizing. We asked Engels to comment further on this, and he said, "[Co-founder] Greg [Koch] has made his stance on this subject abundantly clear numerous times. I'm the new guy, and all I know is that Greg has made it clear to me that there’s no change with that. I have been charged with keeping Stone independent." For Stone to sell to a corporation like AB-Inbev or Constellation would be like Bernie Sanders suddenly announcing his allegiance to the Republican party.

Indeed, Stone has always been fiercely independent, with Koch consistently going out of his way to publicly differentiate his company from Big Beer, and emphatically championing means for battling such conglomerate behemoths.

Despite its intimidating size and apparent misstep in economic planning, Stone's contributions to the craft movement must not be downplayed. With Stone's iconic west coast IPA, an entire line of aggressive "Arrogant Bastard" ales, and an undying commitment to consistency of quality, the company not only helped to revolutionize the way Americans think about and enjoy domestic beer — it also continues to employ over 1,000 individuals, which is more than 99% of breweries in the world can claim.

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