When you buy lots of stuff, inevitably you realize you don’t need a lot of the old stuff you had. When you work for a company, sadly, sometimes that stuff isn’t stuff at all — it’s people.
Anheuser-Busch InBev has recently bought a bunch of craft breweries (10 over the last few years) for its The High End division (AB InBev’s umbrella business for craft and imports). The company’s even launching whole new “craft” brands from scratch and creating chain destinations from the brands it owns. This glut of product has the Belgian-based megabrewer, which rules 45 percent of the American beer market, rethinking its sales and success strategy. So AB InBev is getting rid of some stuff, and that stuff happens to be 380 people who are losing their jobs.
First reported by BeerStreetJournal.com, the layoffs will reduce The High End’s nationwide sales team by some 90 percent but will not include employees who report directly to any of the 10 craft breweries within its portfolio. From the BeerStreetJournal.com:
According to [Alex] Medicis [the vice president of sales for AB InBev North America] Anheuser-Busch is rethinking the business model surrounding the High End, centering more on efficiency. Cuts were made coast to coast.
Per Mike Seabaugh, High End Sales Rep, AB’s explanation centered around brewery acquisitions. “Basically, they’ve bought quite a few breweries and with those purchases came a bunch of employees. They don’t have room for us anymore”, he said.
According to other corresponding reports, AB InBev has a new strategy that goes beyond efficiency to being more focused on internal, organic growth (not buying up new breweries). For some time, AB InBev has been expanding into regional markets big time via destination breweries from craft brands like Golden Road and Goose Island. It’s also creating new “craft” brands from scratch. Earlier this year, AB InBev announced it was adding another brand to its High-End portfolio with the launch of Veza Sur Brewing Co. in Miami. The beverage roll-up has turned to two of its properties, Colombia’s Bogota Beer Co. and Oregon’s 10 Barrel Brewing, to make it all happen. Maybe those regionalized initiatives didn’t exactly jibe with The High End’s corporate sales force.
By coincidence, I sat for an exclusive hour-long interview with High End president Felipe Szpigel Wednesday … “Our plate’s full,” he said. “We have 10 amazing craft partners. Our focus is going to be organic.”
Perhaps to foreshadow Thursday’s events, which hadn’t been announced internally when we spoke at the company’s Manhattan headquarters, Szpigel stressed the relative autonomy and local engagement of his craft breweries, leading one to speculate (in hindsight) that he may have believed his corporately branded salesforce could be perceived as more removed from consumers than the brewery reps themselves. He noted that AB InBev’s craft brewing managers retain localized oversight of their product, even if it’s brewed in various corporate facilities across America, and stressed that when he shops for breweries, strong community ties are a must.
The High End still employs thousands of people. The cuts apparently only affected 2 percent of AB InBev’s 18,000 North American workforce, but it’s still a pretty big bummer if you’re a part of that 2 percent. It’s also a serious reminder that giant corporations often need to reduce people to raise profits. Sometimes it’s a numbers game, which is no doubt on the collective minds of those 10 craft breweries that sold out to AB InBev.