New Belgium buys Constellation’s former Ballast Point brewery in Virginia

USA | The Kirin-owned craft brewer, New Belgium, announced on 23 March that it will purchase Constellation’s 125,000-barrel brewery in Virginia to keep up with rising demand for its Voodoo Ranger line of IPAs. No financial details were disclosed.

New Belgium’s other breweries in Fort Collins, Colorado, and Asheville, North Carolina, are nearing maximum capacity, the firm said.

Although New Belgium, thirty years ago, made a splash with its Fat Tire Belgian style beers, the Voodoo Ranger brand family nowadays constitutes 83 percent of its volume sales at chain retail, the website goodbeerhunting.com reported.

New Belgium is on a roll

New Belgium, which was bought by Kirin’s Australian subsidiary Lion in late 2019, has increased its production for four consecutive years, surpassing the 1 million barrel-mark in 2021. The plant will help the business continue its upward trajectory at a time when craft beer growth has stalled.

The Daleville, Virginia, brewery currently belongs to Constellation Brands, which built it for reportedly USD 48 million in 2016 to brew beers for Ballast Point, a brand it had bought in 2015 for USD 1 billion.

Unable to stop Ballast Point’s sales from going south, Constellation sold most of the business to Kings & Convicts Brewing in 2019 for reportedly USD 41 million but retained the Virginia brewery.

Beyond Beer it is

Critically, this second East Coast outpost for New Belgium can produce not only Voodoo Ranger and other beers, but also flavoured malt beverages (FMBs) and spirits-based, ready-to-drink (RTD) canned cocktails. In its press release, New Belgium said it will “explore ways to leverage the facility’s FMB, seltzer, and RTD capabilities.” Beyond Beer products have become a new focus for New Belgium.

Goodbeerhunting.com commented: “While FMBs offer potential for the future, adding the Virginia facility illustrates how intertwined New Belgium’s overall health is with the current success of Voodoo Ranger, a brand that needs to maximise sales while it’s still bucking the overall beer category’s sluggish trends.”

Industry observers say that US beer sales (volume) were down 4.1 percent in the off-premise in 2022, whereas craft beer sales declined 7.7 percent.

The Voodoo Ranger line-up sold nearly 660,000 barrels in chain retail last year.

Hard times for US craft beer

Times are tough for craft beer in general. The Brewers Association’s Chief Economist, Bart Watson, said in March that he anticipates overall craft brewery volume to have increased just 0.6 percent in 2022, making it the second time he has revised that figure downwards.

The situation for craft beer is even more challenging in the off-premise, where Mr Watson said craft breweries struggle to stand out on shelves and even in their own distributors’ minds.