Ballast Point $1 billion acquisition



Photo Courtesy of rwpeary/Flickr Creative Commons Ballast Point and Constellation Brands to merge under a $1 billion deal.

Photo Courtesy of rwpeary/Flickr Creative Commons
Ballast Point and Constellation Brands to merge under a $1 billion deal.

Constellation Brands Inc. announced earlier this week that they will be buying San Diego’s  Ballast Point Brewing and Spirits for $1 billion. Yes, a billion dollars.

Constellation Brands is one of the nation’s largest beer distributors. They are mostly noted for selling Mexican imports which include Modelo Especial, Corona, and Pacifico.

Ballast Point was founded by a group of brewers in 1996. Their first location was the Brewer’s Mart located on Linda Vista Road, down the street from the University of San Diego.

Since Ballast Point’s opening in 1996, many students over the age of 21 have enjoyed the brewery’s convenient location as well their tasting room that carries over 40 beers on tap.

Ballast Point is the 31st largest craft brewer in the country, according to the Brewer’s Association.

Ballast Point makes the highly-rated Sculpin IPA that accounts for over 70 percent of its total sales, and they also make the Victory at Sea Coffee Vanilla Imperial Porter. Both are on Beer Advocate’s top world beer list.

Apart from craft beer, Ballast Point began making spirits. For those unfamiliar with the terminology, spirits simply means liquor.

Ballast Point began distilling craft spirits, which include vodka, rum, gin, and whiskey. However, they have added over 20 types of spirits to their product line and even added canned cocktails in 12 oz cans.

Ballast Point’s business philosophy and entrepreneurial spirit have allowed them to strategically place themselves in the higher-end of the craft beer segment which is why they have become one of the most desired acquisitions.

Ballast Point has become one the more premium brands in the entire craft beer industry.

Major brewing giants have been on the hunt for craft brewers, which have been outpacing the growth of domestic brews in the beer industry.

This is not the first large acquisition in the local brewing community. First, Lagunitas Brewery sold 50 percent of its company to Heineken, followed by San Diego’s Saint Archer Brewing Co.,  acquired by MillerCoors earlier this year.

This is becoming a brewing nightmare for 21-year-old senior Christian Batani.

“Constellation made a great investment in buying Ballast Point,” Batani said. “This will definitely drive their sales way up. I’m just worried that Ballast Point will lose sight and won’t be dedicated to the craft, like their motto says.”

Bart Watson, chief economist for the National Brewers Association says this news is difficult to believe.

“It’s hard to digest,” Watson said. “It shows where the growth is heading. They’re willing to pay a high price because they believe they will see continued growth and a return on investment.”

The future for Constellation Brand and Ballast Point Brewing and Spirits is uncertain at this time. Constellation Brand’s CEO expects the transaction to be finalized by year end.

Until then, many students over 21 continue to enjoy a cold beer at Ballast Point, regardless of ownership.