USA – Constellation Brands, America’s third-largest beer company, has agreed to sell Ballast Point brand and a number of its associated production facilities and brewpubs to Chicago-based Kings & Convicts Brewing Co.
Constellation Brands acquired Ballast Point in 2015 for approximately US$1 billion to bolster its craft brews.
However, less than two years after the acquisition, the company said that the brand wasn’t growing as expected, forcing it take an impairment charge.
At the time of the acquisition, the craft-beer craze was peaking in the US, but production has dipped from a peak of 431,000 barrels in 2016 to 320,000 barrels in 2018, according to the Brewers Association.
Bill Newlands, Constellation Brands president and CEO said that offloading the Ballast Point brand will enable the company to focus on optimizing growth of its higher performing portfolio.
“Trends in the US craft beer segment have shifted dramatically since our acquisition of Ballast Point,” Newlands said.
“Ballast Point remains one of the most iconic craft beer brands in the country and we’re pleased to transition the business to an owner that can devote the resources needed to fuel its future success.
“At the same time, this decision allows Constellation to focus more fully on maximising growth for our high-performing import portfolio and upcoming new product introductions, including Corona Hard Seltzer, scheduled to launch this spring.”
As part of the deal, Kings & Convicts will acquire the Ballast Point brand and a number of its associated production facilities and brewpubs, excluding Constellation’s Craft & Specialty operations in Daleville, Virginia.
Kings & Convicts will also retain all positions within Ballast Point’s existing workforce, with plans to hire additional resources to support the future growth of the business.
“We’re excited to welcome the team at Ballast Point into the Kings & Convicts family,” said Brendan Watters, Kings & Convicts’ chief executive officer. “We have long admired the quality and spirit of Ballast Point’s brands and team.
“Ballast Point’s best-in-class brewing standards will remain unchanged, delivering the same high-quality, award-winning products the company has become known for over the years.
“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.”
Details of the transaction were not disclosed but Constellation said that it expects to realize slightly improved depletion and margin trends for the beer business upon close of the deal.
This transaction is expected to close by March 2020.