Lagunitas Cuts Less Than 5% of Workforce in Restructuring Effort

Lagunitas Brewing Company is cutting less than 5% of its workforce as part of a restructuring plan, the Heineken-owned, Petaluma, California-based craft brewery confirmed today to Brewbound.

The news was first shared by subscription newsletter Craft Business Daily.

“In order to fortify our continued global success and continue to compete in the ever changing and challenging U.S. marketplace, we are announcing an evolution to our commercial strategy,” Lagunitas CEO Maria Stipp said in a statement. “This includes a restructure of our organization, aimed at better aligning our sales and marketing departments, and allowing us to extend our brand experiences domestically and abroad.

“While resulting in less than a 5% impact to our workforce, this restructure aims to ensure we are aligned across all commercial departments and better resourced to maximize returns with the opportunities we see ahead,” she added.

Lagunitas, which was wholly acquired by Heineken International in May 2017, declined further comment about the restructuring and job losses.

The latest round of job cuts comes about 16 months after the company slashed 12% of its workforce, in a move that impacted at least 100 employees.

News of the latest layoffs follow what Stipp called “a hard-fought” 2019.

Nevertheless, Lagunitas’ posted positive sales results in off-premise retailers. According to Stipp, Lagunitas IPA remains the top-selling IPA in the world due to “very strong growth internationally,” as the beer is sold in 35 countries. Citing Nielsen data in the U.S., Stipp noted that Lagunitas IPA remained the top-selling IPA in the U.S. in 2019, as sales increased 3.1% due “in part to a strong year-end finish, where our flagship was +9.3% in the last 4 weeks of the year.”

Meanwhile, market research firm IRI reported that off-premise dollar sales of Lagunitas products increased 0.7%, to nearly $184.9 million in 2019. Lagunitas IPA remained the top selling IPA in IRI tracked multi-outlet and convenience retailers, increasing dollar sales 3.8%, to more than $86 million last year.

The news wasn’t quite as rosy for Lagunitas’ No. 2 brand, Little Sumpin’ Sumpin’ Ale, as dollar sales declined 1.7%, to about $35.7 million.

Part of that growth can be attributed to the company finally offering its flagship IPA in 12 oz. cans, and pushing the brand with chief marketing officer Kelly Murnaghan’s first campaign, the “IPA Can Shopping Network Shop.” Murnaghan’s hire as CMO in July was among key personnel moves made in 2019, including promoting Tom McReavy to senior vice president of sales in July.

In 2018, Lagunitas crossed the 1 million barrel threshold, according to data from trade group the Brewers Association.

Still, Lagunitas showed signs of tightening its purse strings in October, when the company closed its Portland, Oregon-based “Community Room,” a venue for local organizations and non-profit organizations to host events at no charge with donated beer.

Lagunitas is not alone in restructuring in recent years. Brooklyn Brewery restructured its U.S. sales team in December in an effort “to better reflect the realities of the current U.S. beer market.”

“Simply put, craft brewers have been putting too many resources into hand selling, and have been under-investing in the marketing and brand building sides of the business for too long,” Brooklyn said at the time.

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