Ballast Point Brewing, the San Diego based craft brewery responsible for such classic brews as Grapefruit Sculpin, Grunion, and Big Eye India Pale Ale, announced today it will become part of Constellation Brands. The deal will cost about $1 billion, financed with cash and debt, making it one of the largest craft beer takeovers to date.
Ballast Point founder Jack White sees the business move as the right one for his company, one that is ready to expand on a larger scale.
“We started this business nearly 20 years ago with a vision to produce great beer that consumers love and to do it the right way,” said White. “To achieve that vision, we needed to find the right partner. The team at Constellation shares our values, entrepreneurial spirit and passion for beer, and has a proven track record of helping successful premium brands reach the next level of growth and scale.”
Constellation Brands, owner of such well- known alcoholic beverage names as Robert Mondavi, Corona, and Modelo Especial has been looking for a craft beer partner. The company established a venture capital arm in August of this year solely for the purpose of investing in new adult beverage companies and Constellation feels that Ballast Point is a perfect match for its long term business goals. Rob Sands, CEO at Constellation, sees great potential for this San Diego brewing operation.
“We believe in the vision that Jack and his team have created and we’re excited to welcome Ballast Point, one of the most respected craft brewers in the country, to the Constellation Brands family,” said Sands. “Along with imports, craft beer is a key driver of growth and premiumization within the beer industry, with craft doubling its share of the U.S. beer market in the last five years. Ballast Point has certainly been a key driver of that growth. Their business philosophy and entrepreneurial spirit perfectly align with our culture and we look forward to strengthening our position in the high-end beer segment with what is arguably the most premium major brand in the entire craft beer business.”
Ballast Point Brewing has witnessed exponential growth over the past few years. Calendar year 2015 sales are expected to reach more than 4 million cases, an increase of more than 100 percent compared to 2014. In dollar terms, Ballast Point is expected to hit around $115 million in net sales for 2015. Its beer products are highly acclaimed by the craft beer community and with such high growth and quality, Constellation Brands feels the $1 billion price tag is justified.
Analysts expect Constellation Brands to seal the Ballast Point Brewing & Spirits deal before year end. Craft beer fans are bound to get worked up, accuse these craft beer businesses of selling out, boycott brands, etc., but with thousands of craft breweries operating in the United States and with the high growth of the industry, consolidations are a fact of business and we are certain to see more of them in the coming months.
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