10% of Summit Brewing Staff Laid Off in Minnesota after Sales Declined in Beer Market

Summit Brewing layoffs
iStock.com/ValentynVolkov

Jobs Cuts a First for Beer Maker

St. Paul, Minnesota’s Summit Brewing Company is shedding employees for the first time in its 32-year history. The Summit Brewing layoffs in 2017 affect about 10% of the company’s workforce, which peaked at around 100. The Summit Brewing job cuts come as the Minnesota beer market in particular faces a number of challenges, with new companies popping up regularly and taking up room in an industry that was once dominated by a select few brewers. As a result, brewery layoffs in 2017 have spiked in the state.

Perhaps the biggest shift in the Minnesota beer market came when a 2011 law was passed, allowing breweries to have taprooms. Since then, the market has only become more crowded as companies have popped up to take advantage of the craft beer demand that has surged in recent years across the U.S.

The Summit Brewing job cuts are therefore hardly unique in the state, as many companies have adjusted to the new market dynamics. However, the Summit Brewing layoffs in 2017 represent cuts at the oldest craft brewer in the state.

In 2016, the Brewer’s Association listed 112 breweries in Minnesota. There was only a handful of breweries when Summit first started business.

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“In many ways we’re being very proactive, keeping ahead of the curve and making some adjustments,” founder Mark Stutrud said, as reported by the Twin Cities Pioneer Press.

“The tough thing about it is that everyone who has left our organization, they’re really great people. We simply assembled a team to make much more beer than we’re making now.”

Summit Brewing Scaled Down Distribution

Aside from the Summit Brewing layoffs, the company also ceased distribution in six statesPennsylvania, Ohio, Illinois, Indiana, Nebraska, and Michiganearlier in the year.

The company said that it decided to withdraw from these states because of challenges in getting its product to retailers due to changes in the industry.

Last year, Summit Brewery reported revenue of $30.0 million from 129,000 barrels of beer. The Summit Brewery revenue decline is largely due to growing brewery market challenges that the company is facing.

The Summit Brewery layoffs, therefore, are part of the effort to respond to that changing industry landscape.

The brewery was once the 29th-largest craft brewer in the nation and the second largest in Minnesota, with its product reaching 17 states. The company has since shrunk its distribution down to five states. Its home state accounts for more than 75% of its sales, with the remainder coming from surrounding states.

More Brewery Layoffs in 2017

As mentioned earlier, the Summit Brewery layoffs were hardly the only brewery layoffs in 2017. Several other brands have joined the company in reducing their workforce.

Anheuser Busch Inbev layoffs hit the company’s High End department, affecting its national sales team. The company stated that about two percent of its overall U.S. workforce of more than 18,000 people would be slashed.

Green Flash Brewing layoffs, meanwhile, cut about 25 employees from the accounting, marketing, events, and brewing operations departments.

 

Sources

Summit Brewing layoffs are the first in company’s history,” Twin Cities Pioneer Press, December 28, 2017.

Anheuser Busch InBev Lays Off Hundreds of “High End” Employees,” Sightlines, September 7, 2017.

Summit Brewing stops distribution in six states,” Star Tribune, May 23, 2017.

“[Big Update] Green Flash Brewing Lays Off ~25 Employees,” The Full Pint, January 17, 2017.

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