After four years, the Ballast Point Brewing Company experiment with Constellation Brands is over, as it was announced today that the brewery was sold to Kings & Convicts Brewing Company, a tiny Chicago-area company, in a move that shocked the beer industry. The terms of the deal were not disclosed.
Founded in 1996, Ballast Point was one of San Diego’s original craft breweries, helping to spark the area as an industry hotspot and a destination for beer drinkers from across the United States nearly two decades later. In 2015, it grew into the 17th largest brewery in the country based on sales but that same year it was sold to Constellation Brands, a Chicago-based beer business which owns several of the top Mexican brands including Corona, Modelo and Pacifico, for a whopping $1 billion.
Constellation Brands thought it was getting a highly sought after craft brewery but Ballast Point struggled to evolve and quickly began to weigh down the company, as it was forced to cut back on production. It even led to a halt on new locations and the closure of several Ballast Point locations, so now Kings & Convicts gets five California Ballast Point spots as well as a taproom in Chicago’s Fulton Market neighborhood. According to the Chicago Tribune, the sale this time around was less than $1 billion per Brendan Waters, the co-founder and CEO of Kings & Convicts, though he failed to elaborate further.
Watters, an Australian native, is a former hotel executive who sold his stake in Boomerang Hotels back in 2015 before eventually opening up Kings & Convicts – a small brewery and 400-square-foot taproom just outside of Chicago. The brewery makes 660 barrels per year, including six staple beers and a variety of limited efforts, not to mention an on-site indoor golf simulator. That’s just a little less than the 200,000 barrels Ballast Point will pump out this year. Watters and his partner, English native Christopher Bradley, have studied beer and to land Ballast Point the founders added two new investors into Kings & Convicts to help ensure the purchase, which will officially close in 2020. And Ballast Point workers have no need to worry as Watters announced plans to retain the entire workforce of the brewery, whose efforts can be found in 49 states. All facilities will also remain open, with a primary focus shifting to sales and marketing.
Breweries being sold are very common in today’s landscape, with companies like Anheuser-Busch InBev scooping up another Chicago staple, Goose Island Brewing Company. There are countless other breweries that are no longer technically under the craft beer umbrella like Jacob Leinenkugel Brewing Company, Lagunitas Brewing Company and Terrapin Beer Company, just to name a few. Usually, however, it’s big companies buying smaller, popular up-and-coming breweries, not the other way around – which really makes today’s sale more intriguing.
It’ll mean Kings & Convicts’ efforts could potentially be distributed on a much larger scale, especially since there are plans to brew it at Ballast Point’s locations and vice versa – and there’s even plans to export it to Watters’ native Australia. It could also potentially mean a breath of new life to Ballast Point, a brewery that seemingly got a little stale with creating limited beers given it’s sizable growth in recent years, getting lost in an oversaturated market full of trends and seasonal releases.