Tiny suburban Chicago brewery Kings and Convicts stunned the beer industry Tuesday afternoon by announcing the acquisition of California’s legendary Ballast Point Brewing. Terms were not disclosed.
Ballast Point was famously bought for $1 billion four years ago by Constellation Brands, the Chicago-based beer company that owns the American rights to top Mexican brands that include Modelo, Corona and Pacifico. Ballast Point quickly became an albatross for Constellation, struggling to grow and adapt to its larger owners.
Multiple Ballast Point locations have closed or else been paused while in planning in recent years. The deal nets six Ballast Point locations for Kings and Convicts – five in California and a taproom in Chicago’s Fulton Market neighborhood.
Kings and Convicts co-founder and CEO Brendan Watters said the price was less than $1 billion, but declined to elaborate, citing details of the agreement.
“I don’t have that sort of cash lying around,” he said.
The sale was as unlikely as it is unprecedented. Kings and Convicts, which opened in Highwood in 2017, is a tiny brewery unknown to most Chicago beer drinkers. It will make a mere 660 barrels of beer this year.
Ballast Point is one of the nation’s most recognizable brands, on pace to make about 200,000 barrels of beer this year.
Watters, who is in San Diego Tuesday to announce the deal to Ballast Point staff, said he told staff there not to worry about the fact they haven’t heard of Kings and Convicts.
“I said most people in Chicago don’t know us, either,” he said. “I think that that’s what makes it quite interesting.”
Brewery sales have become common since Anheuser-Busch bought Chicago’s Goose Island Beer Co., a deal that sparked an era of consolidation as large beer companies sought to get a piece of the growing craft beer industry.
Tuesday’s deal is a striking example of the opposite.
“This has been about the conglomerates buying up the independent breweries but we’re doing the opposite,” Watters said. “We’re saying, ‘Let’s bring it back to independence and innovation and see what happens.'”
Seeds of the deal were planted in July, when Watters golfed with someone he declined to name from Constellation Brands and asked the company’s plans for its foundering craft brand.
“I said what are you doing with Ballast Point?” Watters said. “They said, ‘Why?’ I said I wanted to buy it. It was as simple as …read more
Source:: Daily Times