Are Layoffs at New Belgium a Sign of Slowing Craft Beer Sales?

Are Layoffs at New Belgium a Sign of Slowing Craft Beer Sales?

by Mark E. Lasbury for Indiana On Tap

based on stories in Brewbound and Brew Studs on February 23, 2018

New Belgium Brewing in Fort Collins, CO is a craft beer success story. Founded in 1991 by Jeff Lebesch and Kim Jordan, New Belgium is now the fourth largest craft brewery in the USA. With increased sales came increased distribution, including their best selling beer, Fat Tire, a Belgian Style Ale. Other beers followed, including the Lips Of Faith series with more obscure yeast strains and flavor components. In 2013, New Belgium became a 100% employee-owned brewery.

Their national success afforded New Belgium the opportunity (and the need) to open an east coast brewing facility in just outside Asheville, NC, in 2016. Growth continued into the middle 2010s, but sales increases had begun to slow by 2016. Now comes news that New Belgium is laying off 4% of their work force, equivalent to about 28 full time employees.

Brewbound first reported this last week that the cuts occurred only three months after New Belgium consolidated sales territories, and include the termination of six salespeople. The severance packages include up to twenty weeks of pay and the repurchase of employee stock. The cuts will mainly affect the mothership facility in Fort Collins.

The Brewbound story highlighted the reduction in force issues and a slight reduction in production for New Belgium (955,000 barrels in 2017 as opposed to 958,000 barrels in 2016), and a general slowing in craft beer sales increases: however, on the same day Brew Studs countered with a story stressing the large increase in work force generated by New Belgium in 2013-2014 and the fact that projections were high and were not met for 2017.

The Brew Studs stressed the 40% increase in manpower for New Belgium since 2013 rather than declining sales as a contributing for the layoffs. If growth had maintained the same pace as in 2016 and projections had been met, the terminations would not have been necessary. Interestingly, the two stories with different slants were both based off the same New Belgium press release.

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