When you sell your brewery to a global alcohol mega power, there’s only one thing that is certain: You’re eventually giving up power to personally shepherd its growth. It’s an act of faith—trust that the huge company that now owns your brewery will continue to develop it in the right direction. And that trust is easily broken.
We can only imagine that’s probably what happened yesterday, when Constellation Brands informed the majority of their craft beer sales team that they were being laid off. According to Reid Ramsay over at Beer Street Journal, a “source close to the situation” said that employees believed they were signing on for a routine conference call, but it ended with salespeople for Constellation’s acquired brands—Ballast Point, Funky Buddha and Texas-based Four Corners—all being laid off. As many as 60 people may have been let go, with responsibilities for selling those breweries’ products falling instead to Corona Modelo’s “Import Team” sales force.
It seems safe to say that no matter the rest of the outcome, this isn’t a plus for the likes of Ballast Point or Funky Buddha, two former craft breweries now trying to navigate the waters of a segment of the beer market whose growth has been slowing down. Taking their products out of the hands of a trained, educated sales force and dropping them into the hands of salespeople whose highest priority will remain Corona and Modelo Especial can only be perceived as a negative.
As for the reasons behind the purge, one has to imagine that this week’s announcement that Constellation was investing $3.8 BILLION into Canadian cannabis company Canopy Growth Corp. likely has something to do with it. Is the alcohol giant reassessing its interest in the craft beer market, and seeing more lucrative potential profits in the cannabis market instead? It’s also hard not to be reminded of AB InBev’s “The High End” craft beer division, which likewise laid off more than 380 sales force employees in a large purge last year.
Does this speak to the difficulty of selling “craft” beer from breweries that have been purchased by international conglomerates? Or does it simply smack of the cynicism of those companies, and their belief that any employee, or any salesperson, can sell any product, regardless of whether they have a background with the brewery?
Comments from Constellation Brands and the breweries involved have not yet been forthcoming.