Oregon’s Deschutes Brewery lays off 10% of staff

Oregon-based brewer Deschutes, which is the 10th largest craft brewer in America, has laid off 10% of its staff after planned growth failed to materialise.

Founded in 1998, Deschutes started life as a brew pub, and has grown to become one of the country’s biggest craft brewers.

Earlier this month, the brewer announced a significant reduction of its workforce, as reported by Oregon newspaper The Bend Bulletin, as part of a cost saving exercise to match staff to sales volumes.

The company had expanded its team in anticipation of further growth, however that growth failed to match expectations over the past two years.

“We have made the hard decision to reduce staff across sales, marketing and operations by 10 percent to match our sales volume,” Michael LaLonde, Deschutes Brewery CEO and president, told the Bend Bulletin. “This decision was extremely difficult to make, but necessary for the brewery given current market conditions and trends.”

The company also announced that it was reevaluating its plans to expand into an East Coast location in Roanoke, Virginia, which was part of a $95 million project involving a 49 acre parcel of land.

Deschutes purchased the land for $3.2 million, and could sell the land, but has said it instead wants to revise the timing of construction. Construction was due to begin in 2019 and brewing in 2021.

It’s restructure is reflective of the current atmosphere within the US craft beer industry, with craft beer sales generally slowing across the US.

According to the US industry body The Brewers Association (BA), exports of US craft beer rose by 3.6% to US$125.4 million in 2017, but while this is a record high, it is now the third consecutive year that growth has slowed.

Meanwhile, according to the IWSR, beer consumption dipped by 1.1% over the whole of 2017, the equivalent of losing 261 million litres in revenue, according to figures released by the IWSR.

Deschutes is now looking toward the release of new beers, with an increasing proportion in cans, and has purchased a pilot brew system that will enable experimentation in small batches.

New beers will launch in fall 2019.