[Big Monk]

When your business model details rapid expansion and you court a large company to aid in said business model, it can’t then be thrown back at the “corporate overlord” when the business model doesn’t then pan out as expected.

As sad as it is to have to layoff people (even my business is not immune to it), sometimes it’s a necessary move to reestablish stability for the rest of the workforce and company.

[RC]

When your business model details rapid expansion and you court a large company to aid in said business model, it can’t then be thrown back at the “corporate overlord” when the business model doesn’t then pan out as expected.

You're basically arguing that Heineken is an innocent bystander here. Come on. Were they "duped" into believing Magee's model? Did they have no idea what they were getting into? No doubt Heineken vetted the model thoroughly and completely, down to the last tenth of a penny over next 200 years. I also suspect Heineken was involved in crafting Magee's business model long before the sale was formally announced, and long before Stipp was installed. No Overlord would buy a company and then not have a huge say in its leadership or direction.

It absolutely can be thrown back at Magee, Stipp, and Overlord. How is it that they are NOT the ones responsible for the model's failure or success? They're the ones that made it and/or bought into it! Of course, Stipp's job isn't on the chopping block...

[ynotbrusum]

The larger distribution system of Heineken was thought to cover the excess production capacity of Lagunitas’ expansion, (rather than growing a bit more slowly, which might have occurred without the infusion of capital).  The greater capacity meant pushing out more beer at a lower price with a smaller margin.  Labor is the biggest cost after marketing, so Lagunitas just followed the typical pattern and when the price point was dropped (which rarely recovers), people weren’t buying more or drinking more, so the profits shrank - something had to give.

I sympathize with the employees and wish economics were not such a cruel mistress.

[hopfenundmalz]

You can’t lay the blame on Heineken for this one.

Lagunitas was all about aggressive expansion before Heineken ever entered the picture. You’d be hard pressed to say that this wouldn’t have happened in Heineken’s absence.

The truth of the matter is that if a business grows rapidly and expansion outstrips demand, the difference has to be made up somewhere. Would they be so quick to lay people of if they weren’t owned by a large company? Would pre-Heineken Lagunitas have taken a hit rather than layoff? Who knows. Surely not guys and gals on a homebrew forum.

One article said Petaluma has a .68 million bbl capacity. Chicago has 1.2 mbbl. The halted Azuza brewery was to be 1.8 mbbl. Over expansion?

[Big Monk]

When your business model details rapid expansion and you court a large company to aid in said business model, it can’t then be thrown back at the “corporate overlord” when the business model doesn’t then pan out as expected.

You're basically arguing that Heineken is an innocent bystander here. Come on. Were they "duped" into believing Magee's model? Did they have no idea what they were getting into? No doubt Heineken vetted the model thoroughly and completely, down to the last tenth of a penny over next 200 years. I also suspect Heineken was involved in crafting Magee's business model long before the sale was formally announced, and long before Stipp was installed. No Overlord would buy a company and then not have a huge say in its leadership or direction.

It absolutely can be thrown back at Magee, Stipp, and Overlord. How is it that they are NOT the ones responsible for the model's failure or success? They're the ones that made it and/or bought into it! Of course, Stipp's job isn't on the chopping block...

I’m not arguing for people losing their jobs. That is the unfortunate side of economics. However, it stands to reason that in a situation like this, major expansion extends to the workforce and it’s often “last in, first out”. That’s a tough pill to swallow and regrettably it happens in many industries.

[hopfenundmalz]

When your business model details rapid expansion and you court a large company to aid in said business model, it can’t then be thrown back at the “corporate overlord” when the business model doesn’t then pan out as expected.

You're basically arguing that Heineken is an innocent bystander here. Come on. Were they "duped" into believing Magee's model? Did they have no idea what they were getting into? No doubt Heineken vetted the model thoroughly and completely, down to the last tenth of a penny over next 200 years. I also suspect Heineken was involved in crafting Magee's business model long before the sale was formally announced, and long before Stipp was installed. No Overlord would buy a company and then not have a huge say in its leadership or direction.

It absolutely can be thrown back at Magee, Stipp, and Overlord. How is it that they are NOT the ones responsible for the model's failure or success? They're the ones that made it and/or bought into it! Of course, Stipp's job isn't on the chopping block...

I’m not arguing for people losing their jobs. That is the unfortunate side of economics. However, it stands to reason that in a situation like this, major expansion extends to the workforce and it’s often “last in, first out”. That’s a tough pill to swallow and regrettably it happens in many industries.

In this case it was more FIFO for many. Peteluma had the most reduction. That was the headquarters, and those became redundant.

[Bob357]

How do you know the layoffs were caused by a boycott (IS there a boycott of Lagunitas?) and not the same overall market conditions that have caused other brewery layoffs and closures?

I suggested a scenario. Sorry if that was unclear. While I did use this thread as a vehicle, my intent was to point out a trend that has been going on for several years. Whether or not this is the reason for the Lagunitas layoffs is irrelevant to my point. It certainly is a point to ponder though. I'm sure you're aware of the promotion of boycotts, specifically against breweries and brewing suppliers that were bought out by AB InBev.

As Robert stated earlier in this thread, I too give my dollars to businesses that provide good product and service and really could care less who the owners are.

If a brewery either fails or downsizes its work force after a buyout, who is really to blame when an organized boycott is in place? Maybe that's a better way to pose the question.

You have every right to have differing opinions and practices, which I respect. Please give me the same respect.

[James K]

Alright everyone, chill and take some deep breaths. It’s just beer. I like the convo. Ok so.

I don’t think anyone is boycotting lagunitas because they are Heineken now. But. When people find out about these buy outs I would say it affects their customer base. Me personally. I probably won’t be buying any lagunitas unless it’s some special chit. It’s like if the locally owned brewery where I lived sold.. I’d be like, no thanks, because I knew the hard working owner, now... not so much.

It’s like, why give my money to a multinational when I can support craft, or, can support local. Or, semi local from a neighboring state. Regardless. I bought some German import beer the other day because October fest. I want that good good.

I like what Robert said. I look for good beer. Most beer that I think is good happens to be craft beer. Don’t get me wrong, I have some PBRs for cooking up brats still. I’m notmgonna turn down a Coors if I go to someone’s house for a bbq, or a lagunitas. At least they are trying, right?

We’re lucky to have tons of choice, we’re lucky that we can actually be like, well I’m gonna make this. There are breweries where I live, they make pretty damn good (exotic) beer, some also make some chit beer every so often, or they make the same beer, over and over, because the masses want some IPA I think is chit and I don’t go there or buy it.

Could I tell you about the layoffs, not really. I think it’s unfortunate if I were in that group of people that just got canned I’d say ban together and start something new. You don’t even need 100 people for that. The skills and knowledge are there.

I’ve been to lagunitas in Petaluma and it was a kick ass venue. Two stages for bands, food, good atmosphere. That’s where I gravitate. But, knowing my money is going to Heineken now and not people in Petaluma. I’d rather go find another rinky dink brewery and support them, if there beer is bad..  I’ll tell them. They can either see the writing or ignore it.

I did a fair amount of research on beer for a thesis before I was even brewing a lot and I know for fact, based on research, that as these firms like Heineken buy out things like lagunitas. More specialty firms are going to come out of the woodworks. Ive been writing my own plan.

I think it’s unfortunate that’s some of the bigs buy out and it’s still a “craft” because I see it as market share that’s no longer a craft. It’s just, how can we fill shelf space and keep the little guy out. But, I digress. Congratulations to the people who made something popular enough to sell out.

There is a brewery in Arizona, it was bought out by ABInbev. During the buyout they negotiated autonomy and now, all their finance problems are gone. Winner winner, chicken dinner, these guys can afford to dump a 100bbls because they don’t like the outcome and ABInbev is just like, oh well we will raked in billions and are on the shelf under the guise of Four Peaks Brewing Co. 

What changinna do, besides drink beer?

[Big Monk]

At the end of the day, for the average onlooker, you have a convergence of something we are passionate about and big business. Not necessarily just Big Beer either. Craft is big business. Like it or not, even the best of them have to make financial decisions, and big ones at that. Some, it would seem, navigate that better than others, and i'll concede that for those with bigger corporate backing, the pressure is probably much more significant.

You always have to step back and be objective when these things come up. We'd like to idealize the industry as serving a higher purpose WRT the actual craft of making beer and serving it's customers responsibly, as well as serving it's employees to the best of it's ability. It is a business though, and once a lot of money starts changing hands, you are at the mercy of the economic and market conditions.

[Robert]

Agree.  It also seems there is -- not necessarily right here, but in much craft beer advocacy -- an atmosphere of hating on people for succeeding in what they set out to do,  that is, make good beer available to people.  Again, suppose you started a brewery 25 years ago.  Sold your car, got a $10,000 loan and set up a 3 bbl rig in an old garage.  At that point, anybody could have afforded to become your partner/co-owner/fellow delusional idiot.  You grew your business, as you hoped. Now you want to cash out and retire.  Is an employee buyout an option?  If you are still  small enough, maybe; but if you're still that small, you probably aren't here anymore.  Say you survived all the shakeouts, and you're a billion dollar company.   What are your options?  Become a publicly traded company (been done, but how many others could do this?) or find a private buyer. That buyer will necessarily be bigger than you; Big Beer or another big, diversified company are the only options.  And of those two, why allow one the craft label just because its portfolio extends beyond the beverage industry?

(I also understand that there's a demographic that is passionate about small, hyper-local businesses.  But I think that this has increasingly less and less to do with that original goal of the craft movement:  getting quality beer back on the market.   These places are mostly vanity projects putting out God-awful beer, but it seems not to matter,  as they are primarily venues anyway; people are going there to socialize, and for the music night, board game night, poodle sack race night, etc., and maybe the food truck in the lot.  I'm absolutely okay with that. But it's a different enterprise, and a decent beer might still enhance the experience.)

[Wilbur]

poodle sack race night

I'm afraid I'm not going to be able to gloss over this one. Is this a sack race, but with poodles? Where the sack is made from poodles? Where you put poodles into a sack and have them race each other?

I've been laid off before (Most recently it had been 2 weeks before Christmas a few years ago), and it does suck, even if you understand why. Some people would say without that aggressive expansion, those people wouldn't have had a job in the first place. Personally, this is something that happens to business. It's much different from the practice of gutting a place to pay off your purchase cost.

I personally enjoy Lagunitas (Not all of them), but I typically don't buy them unless there's not a better/local option available. It's been great on United flights (Little Sumpin').

[Robert]

poodle sack race night

I'm afraid I'm not going to be able to gloss over this one. Is this a sack race, but with poodles? Where the sack is made from poodles? Where you put poodles into a sack and have them race each other?

Hadn't thought this through, just sounded good.  A sack made of poodles?  Yikes.  Anyway, if you advertised an event by that name at your tap room, I bet a good crowd would turn out to find out!    Sorry for the distraction.

[denny]

Agree.  It also seems there is -- not necessarily right here, but in much craft beer advocacy -- an atmosphere of hating on people for succeeding in what they set out to do,  that is, make good beer available to people.  Again, suppose you started a brewery 25 years ago.  Sold your car, got a $10,000 loan and set up a 3 bbl rig in an old garage.  At that point, anybody could have afforded to become your partner/co-owner/fellow delusional idiot.  You grew your business, as you hoped. Now you want to cash out and retire.  Is an employee buyout an option?  If you are still  small enough, maybe; but if you're still that small, you probably aren't here anymore.  Say you survived all the shakeouts, and you're a billion dollar company.   What are your options?  Become a publicly traded company (been done, but how many others could do this?) or find a private buyer. That buyer will necessarily be bigger than you; Big Beer or another big, diversified company are the only options.  And of those two, why allow one the craft label just because its portfolio extends beyond the beverage industry?

(I also understand that there's a demographic that is passionate about small, hyper-local businesses.  But I think that this has increasingly less and less to do with that original goal of the craft movement:  getting quality beer back on the market.   These places are mostly vanity projects putting out God-awful beer, but it seems not to matter,  as they are primarily venues anyway; people are going there to socialize, and for the music night, board game night, poodle sack race night, etc., and maybe the food truck in the lot.  I'm absolutely okay with that. But it's a different enterprise, and a decent beer might still enhance the experience.)

Rob, I disagree with your analysis here.  I don't know of anyone who hates a brewery for being successful.  Undoubtedly there are, but I think it's few enough that I'm not aware of it.  Most people are happy for the owners/founders who sell and get rewarded for their hard work.  I think it boils down to who they sell to, and what the buyer's intentions are.  I have a problem with breweries who sell to ABI due to ABI's intent to limit access to beer other than what they own.  Heinekin and Sapporo, who have purchased American breweries, are relatively benign in that regard and I really don't have a problem with them. I just think you're painting with too broad a brush.

[Richard]

poodle sack race night

I'm afraid I'm not going to be able to gloss over this one. Is this a sack race, but with poodles? Where the sack is made from poodles? Where you put poodles into a sack and have them race each other?

You put the poodles in sacks and throw them into a swimming pool, where they race back and forth while the brewer tries to figure out if they are affecting his hydrometer reading.

[Robert]

Agree.  It also seems there is -- not necessarily right here, but in much craft beer advocacy -- an atmosphere of hating on people for succeeding in what they set out to do,  that is, make good beer available to people.  Again, suppose you started a brewery 25 years ago.  Sold your car, got a $10,000 loan and set up a 3 bbl rig in an old garage.  At that point, anybody could have afforded to become your partner/co-owner/fellow delusional idiot.  You grew your business, as you hoped. Now you want to cash out and retire.  Is an employee buyout an option?  If you are still  small enough, maybe; but if you're still that small, you probably aren't here anymore.  Say you survived all the shakeouts, and you're a billion dollar company.   What are your options?  Become a publicly traded company (been done, but how many others could do this?) or find a private buyer. That buyer will necessarily be bigger than you; Big Beer or another big, diversified company are the only options.  And of those two, why allow one the craft label just because its portfolio extends beyond the beverage industry?

(I also understand that there's a demographic that is passionate about small, hyper-local businesses.  But I think that this has increasingly less and less to do with that original goal of the craft movement:  getting quality beer back on the market.   These places are mostly vanity projects putting out God-awful beer, but it seems not to matter,  as they are primarily venues anyway; people are going there to socialize, and for the music night, board game night, poodle sack race night, etc., and maybe the food truck in the lot.  I'm absolutely okay with that. But it's a different enterprise, and a decent beer might still enhance the experience.)

Rob, I disagree with your analysis here.  I don't know of anyone who hates a brewery for being successful.  Undoubtedly there are, but I think it's few enough that I'm not aware of it.  Most people are happy for the owners/founders who sell and get rewarded for their hard work.  I think it boils down to who they sell to, and what the buyer's intentions are.  I have a problem with breweries who sell to ABI due to ABI's intent to limit access to beer other than what they own.  Heinekin and Sapporo, who have purchased American breweries, are relatively benign in that regard and I really don't have a problem with them. I just think you're painting with too broad a brush.

I'll accept that refinement of my observation.