16 June 2023

Constellation sells craft breweries Funky Buddha and Four Corners to founders

USA | Constellation Brands has pulled the plug on craft beer. The third-ranking US brewer disposed of its two remaining craft breweries – Florida’s Funky Buddha and Texas’ Four Corners – to their respective founders in May.

It is not difficult to see why. When compared with Constellation’s mega brands - Corona Extra and Modelo Especial – they were really niche brands, which moreover had lacked the scale-ability to national brands. And after the Ballast Point debacle – Constellation acquired the craft brewer in 2016 for USD 1 billion, only to sell it to Illinois-based Kings and Convicts Brewing Company for supposedly USD 41 million in 2019 – it was only a matter of time before the two were sold.

Previously, in March this year, Constellation struck a deal with Kirin-owned US craft brewer New Belgium to acquire the brewery in Daleville, Virginia, which Constellation had built in 2017 for USD 48 million as an East Coast base for Ballast Point.

Bye bye Funky Buddha

On 26 May, news broke that the founders of Funky Buddha - Ryan and KC Sentz - are re-acquiring their business from Constellation. Funky Buddha Lounge & Brewery was started in 2010 in Boca Raton, Florida, by Ryan Sentz and his wife Giani. Three years later, they invited Ryan's brother, KC, and his wife, Melissa, to join the business. They opened the Funky Buddha brewery in 2013 in Oakland Park, Florida, north of Fort Lauderdale and Miami, with an annual capacity of 45,000 barrels (52,000 hl) beer. When it was taken over in 2017, it was on pace to produce 35,000 barrels beer that year. The re-acquisition of Funky Buddha by the Sentz brothers is targeted for June 2023.

Adios Four Corners

Complementing this move, Texas news outlets announced at the end of May that Constellation was selling Four Corners, which it had acquired in 2018, back to its original owners as well. Four Corners was founded by three friends in 2012 in west Dallas. True to its Texan roots, Four Corners’ portfolio has played up Hispanic-American styles, flavours and branding. Before Constellation took it over, Four Corners had just hiked capacity to 25,000 barrels (28,000 hl) beer per annum.

Although Constellation did not disclose financial details, the founders almost certainly paid less than they sold for. The going rate for craft breweries is not what it used to be at the height of the boom in the 2010’s.

Still, it is a good move by Constellation to sell these businesses back to the people who started them.

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