Daily Management Review

American Constellation sells famous Ballast Point brewery to small company


US alcoholic beverage maker Constellation Brands Inc has agreed to sell Ballast Point Brewing Co, a craft maker, for an unnamed amount to the little-known Kings & Convicts Brewing Co.

Nathanael Burton
Nathanael Burton
According to the company’s press release, the deal affects the Ballast Point brand itself, as well as the company's production facilities and pubs (five in California and one in Chicago). In this case, the brewery in Virginia will remain with Constellation.

Ballast Point was founded in San Diego in 1996 and has become one of the largest and most popular independent breweries in the United States. Constellation bought the company in 2015 for $ 1 billion. In 2016, Ballast Point production reached a peak volume of 430 thousand barrels, but 200 thousand barrels were forecasted for the current year. The company sells products in 50 US states and 19 countries.

Kings & Convicts was established in 2017. The Chicago company is privately owned and owns only one enterprise, which produces six beers with a total volume of 660 barrels, and one bar. According to MarketWatch, before the announcement of the deal, the company had only 200 followers on Twitter.

Kings & Convicts does not plan to lay off about 560 Ballast Point employees, and also intends to use the distribution network of the acquired company to expand its business, the press release says.

“Trends in the craft beer segment in the United States have changed dramatically since we acquired Ballast Point,” said Bill Newlands, Chief Executive Officer of Constellation Brands, whose words appear in the company's message. “Ballast Point remains one of the most iconic craft beer brands in the country, and we are happy to transfer the business to the owner, who can allocate the resources necessary to ensure his future success. "

Constellation Brands became one of the largest beer distributors in the United States in 2013 after acquiring rights to sell Corona beer and several other Mexican beers from the Belgian Anheuser-Busch InBev NV (AB InBev), as well as the Piedras Negras brewery for $ 5.3 billion. In addition, the American company owns beer brands Modelo, Pacifico and Ballast Point, wine brands Robert Mondavi, Clos du Bois and Ruffino, as well as SVEDKA vodka, Casa Noble tequila and High West whiskey.

source: forbes.com