A Craft Brewery Just Bought an Iconic Brewery From Big Beer
This may be one of the strangest beer stories of 2019. It's been a year marked by breweries chasing hard seltzer dollars, as well as craft mergers and big beer buying more craft companies. On December 3, that script was flipped.
Four years ago, Constellation Brands acquired the iconic Ballast Point Brewing Co. for $1 billion. On Tuesday, the company sold Ballast for an undisclosed amount of money (read: far, far less than $1 billion) to the small suburban Chicago brewery Kings & Convicts Brewing Co. The logical next questions are Who? and also WHAT!? The brewery started Tuesday with about 200 followers on Twitter, one location that made around 660 barrels a year (compare that to Ballast Point's more than 200,000), and a website that crashed under the weight of those questions.
This seems almost inexplicable, but there's certainly more to the story than "craft beer turns the tables." The truth is that Ballast Point has been acquired by the group of investors behind Kings & Convicts. Though, it's still an unexpected move.
Constellation Brands didn't seem to get what it wanted out of Ballast Point. The brand's production of more than 430,000 barrels in 2016 has dropped year after year. That decline has included the closing of brewpubs. Kings & Convicts, open since 2017, believes there's still potential in Ballast Point.
The ownership group behind the Highwood, Illinois brewery has expanded from four to six people in the process of the purchase, four of which were unnamed. CEO Brendan Watters told the Chicago Tribune that they "love Ballast Point, but don't want notoriety and want to remain quiet." Though, the paper later revealed that Richard Mahoney, chairman of the board at The Wine Group, is the largest of the four unnamed investors. Watters is a former executive at Boomerang Hotels and sold the chain in 2015.
All of this has led to a further muddying of what "craft" means when talking about craft brewing. (Many would argue that it lost all meaning years ago.) Here, Kings & Convicts is clearly a small brewery, but the investment group behind it has deep pockets.
The Brewers Association's definition of a "craft brewer" is often cited, but even that gets muddy. The definition is vague and has changed many times, sometimes seemingly to keep Boston Beer Company in the fold. (The Sam Adams brewer has gotten bigger and makes a lot of alcoholic beverages that aren't beer, including brands like Angry Orchard ciders, Truly hard seltzer, and Twisted Tea.) In this instance, the "craft" title was stripped from Ballast Point by the BA when it was purchased by Constellation. Now, it again falls under that definition of "craft." It's kind of like saying a word over and over until it loses meaning.
"Our goal is to leverage Ballast Point’s deep know-how, talented and passionate employee base, and outstanding operating team to grow both Ballast Point and Kings & Convicts together," Watters said in a statement. He also said that jobs across Ballast Point are safe.
Many experts have predicted that the upheaval seen at the end of 2019 will continue into 2020, but this kind of move probably isn't something that will start to become commonplace.