During the whole Beer Voltron merger hoopla, craft beer mergers and acquisitions seemed to take a break. Had to be at least 48 hours or so. Anyway, we are back at it: Constellation Brands has announced an agreement to acquire San Diego-based Ballast Point Brewing & Spirits for approximately $1 billion.
The partnership with Ballast Point provides a high-growth premium platform that will enable Constellation to compete in the fast-growing craft beer segment, further strengthening its position in the highest end of the U.S. beer market.
Founded in 1996 and last listed at No. 31 on the Brewers Association Top 50 craft breweries by volume, Ballast Point is one of the bigger names in craft beer, led by its popular Sculpin IPA and Grapefruit Sculpin IPA.
“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 Jack White, founder of Ballast Point Brewing & Spirits. “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 is a leading international producer and marketer of beer, wine and spirits with operations in the United States, Canada, Mexico, New Zealand and Italy. Constellation is the number three beer company in the United States with imported brands including Corona Extra, Corona Light, Modelo Especial, Negra Modelo and Pacifico.
“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,” said Rob Sands, chief executive officer, Constellation Brands. “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.”
Another key quote from this Wall Street Journal article:
“We see the craft category continuing to grow double digits for the foreseeable future and take a significant share of the beer business over the next 10 years,” said Mr. Sands. He added that Ballast Point, which is distributed in 30 states, can expand its distribution outside California and increase sales by tapping into Constellation’s relationships with large, retail chains such as Kroger Co. , a national grocer.
Ballast Point is on pace to sell nearly 4 million cases in calendar 2015, which would represent growth of more than 100 percent versus calendar 2014. Net sales for calendar 2015 are expected to approximate $115 million. Volume and net sales growth from calendar 2012 to calendar 2014 averaged over 80 percent. Ballast Point employs more than 500 employees, produces beer in four facilities in the San Diego area and sells its beer in over 30 states.