Constellation sold craft brewer Ballast Point for USD 41 million
USA | Now we know. Constellation Brands sold Ballast Point for USD 41.1 million. The figure was disclosed in its latest government filing.
Beer Marketers Insight, a news outlet, tweeted: “From USD 1 billion down to USD 41.1 million in 4.5 years. That’s a lot of value that went down the drain.”
It must have been the most expensive craft brewer purchase to date. When Constellation bought Ballast Point in 2016, AB-InBev was in the process of acquiring SABMiller. Constellation paid nearly USD 3,800 per barrel for Ballast Point. By comparison, AB-InBev’s then pending acquisition of SABMiller for USD 122 billion was priced at USD 384 per barrel.
Off-loading a problem
In December 2019, Constellation, which is the third-largest beer company in the US and owner of popular Mexican import beer labels Corona, Modelo, and Pacifico, sold Ballast Point to tiny Illinois-based craft brewer Kings & Convicts, along with its breweries and brewpubs. Ballast Point’s USD 48 million brewery in Daleville, Virginia, which opened in 2017, was not included in the transaction, Forbes reported. Also, financial terms were not disclosed at the time.
Per Forbes, Constellation’s decision to sell Ballast Point came after two consecutive years of declines. Production fell from a peak of 431,000 barrels (504,000 hl) beer in 2016 to 320,000 barrels in 2018 and an estimated 200,000 barrels (234,000 hl) in 2019.
Moreover, Constellation failed to grow the brand nationally. Eventually, the company admitted to having overpaid for the brand and recorded nearly USD 200 million in impairment charges in 2017 and 2019.
