In a move that is sure to be noted and perhaps copied by a number of national craft breweries facing increased competition from an ever-growing number of small breweries, San Diego’s Green Flash Brewing Co. announced yesterday that it will be undergoing a huge contraction. It will pull its products from the shelves of 33 U.S. states, effectively ending its time as a “national” brewery, to focus on its stronger markets in the remaining 17. At the same time, it will undergo a 15 percent overall reduction in its workforce, mostly cutting sales positions in regions it will no longer distribute. In total, that means 33 workers “across production, operations, sales, marketing and administration.”
“We were doing pretty well close to the breweries, and in some strategic markets we had some strongholds, but we had a lot of territory that was in pretty steady decline,” said co-founder Mike Hinkley to Brewbound. “Rather than to continue to fight that battle, we took the resources from out there and brought ’em all into a smaller territory—as much as we could, anyway.”
As the company consolidates, it will give up about 18 percent of its wholesale business. Green Flash also owns Alpine Beer Co., which will likewise shrink its footprint.
“We kept about 82 percent of our wholesale trade business,” Hinkley said. “We were pretty sparse and in decline in that other territory, so reeling it back to strength. Now we can put our sales and marketing resources into a tighter geographic footprint.”
Remaining states for Green Flash distribution will include the following: Arizona, California, Colorado, Hawaii, Nebraska, Nevada, Texas, and Utah, Delaware, Maryland, New Jersey, New York, North Carolina, Ohio, Pennsylvania, Tennessee and Virginia. They’ll be supplied by Green Flash’s two breweries—the original San Diego location and its second brewery in Virginia Beach.
The company is currently looking to shake up its business in a variety of ways. They’re eliminating 22 oz bottles in 2018, following the trend that several other breweries (such as Firestone Walker) have advanced to move all their beer into smaller packaging. Green Flash is also still scheduled to open the first in a potential series of brewpubs this year, located in the former Ploughshare Brewing Co. of Lincoln, NE. It remains to be seen if this contraction of the brand’s overall footprint will succeed in putting the bottom line where it should be, but it’s certainly unusual to see a company opening a new brewpub at the same time that it pulls out of 33 states.
More than anything, this feels like a warning/state of the industry to every other brewery trying to grow from a regional into a national player. As the number of local choices in nearly every city continues to grow, it’s become harder than ever to make people excited about a beer that isn’t fresh and local. We are headed into an era of markedly increased competition, with fewer customers to go around—here’s hoping that the breweries can weather the storm.