Constellation Brands disposes of craft brewer Ballast Point
USA | Four years ago, San Diego’s craft brewer Ballast Point took the beer world by surprise when it abandoned an IPO and accepted a USD 1 billion cheque from Constellation Brands. On 3 December 2019, it shocked fans again.
Because Constellation, the country’s number three brewer (Corona), decided to sell Ballast Point to the little known craft brewer Kings & Convicts from Chicago. The sale price was not announced, but we may rest assured it was far less than what Constellation paid in 2015.
Kings & Convicts has acquired the Ballast Point brand, as well as its production facilities and brewpubs – five in California and one in Chicago. Not included in the transaction is Ballast Point’s USD 48 million brewery in Daleville, Virginia, that Constellation will keep.
Ballast Point’s declining sales
Ballast Point was founded in San Diego in 1996 and grew to become one of the nation’s largest and most talked about craft brewers before its sale to Constellation. The website marketwatch.com says that Ballast Point rapidly expanded under Constellation, but became overextended so that it was forced to close three facilities in the past year, laying off workers and cancelling plans to open a brewpub in San Francisco.
Also, Ballast Point has struggled with sharply declining sales since its peak of 430,000 barrels beer (500,000 hl) in 2016. It is still expected to produce 200,000 barrels (230,000 hl) in 2019.
It is easy to figure out why Constellation wanted to get rid of Ballast Point. Over the years it has had to write down the value of Ballast Point several times. Most likely, it was even willing to give it away for next to nothing. Rumour has it that Ballast Point was sold for less than USD 100 million.
Does Kings & Convicts have a plan?
But the question to ask is: who on earth is Kings & Convicts? Media say it is a privately held brewer that launched in 2017 and operates a single brewery and taproom on Chicago’s North Shore. It will brew just 660 barrels beer (770 hl) this year, according to the Chicago Tribune newspaper, which are sold in the Chicago area and in southern Wisconsin.
It had only 200 Twitter followers before of the announcement.
In a statement, Kings & Convicts said it would take on all of Ballast Point’s 560 employees and plans to use Ballast Point’s distribution network to expand.
