Kings and Convicts Brewing acquisition renders local company again independent
DECEMBER 3, 2019
In 2015, San Diego’s Ballast Point Brewing was purchased by New York-based alcohol company Constellation Brands for $1 billion. It was the largest acquisition of its kind and sent shockwaves through the brewing industry. At the time, Ballast Point was a promising company with a recent and grand valuation, plus steady revenue from its array of Sculpin IPA variations and strong-performing supporting brands. But managing a craft-brewing operation proved challenging for Constellation, and declining sales in an increasingly challenging marketplace led the mega-corporation to seek an exit strategy. Today, it was announced that Kings and Convicts Brewing will purchase Ballast Point from Constellation, returning the 23-year-old company to independent status.
Based in the Chciagoland area, Kings and Convicts has been in operation since 2017. It is a privately-held company backed by a small group of investors focused on long-term growth. Its current, lone brewing facility in Highland, Illinois, comes in at just 5,000 square feet and includes a tap room. It also has a second “destination brewery” in the works in Pleasant Prairie, Wisconsin (outside of Milwaukee). That facility will come in at 48,000 square feet and is expected to open next fall.
Included in the deal are all of Ballast Point’s brewing and public venues, save for the East Coast brewery in Daleville, Virginia, which opened in 2017 and will continue to be utilized by Constellation to brew beers of its other acquired craft brand, Funky Buddha Brewery. The Kings and Convicts acquisition includes Ballast Point’s headquarters in Miramar, as well as brewpubs in San Diego’s Little Italy community, Anaheim’s Downtown Disney area, Long Beach and Chicago’s Fulton Market District.
Kings and Convicts will also retain all of Ballast Point’s current staff, including longtime fixture, vice president and specialty brewer Colby Chandler, who says of the impending deal, “Two things have been consistent in the 23-and-a-half years I’ve been at Ballast Point: quality beer is one and change is the other. I don’t expect either one to stop.”
“We’re excited to welcome the team at Ballast Point into the Kings and Convicts family,” says Brendan Waters, Kings and Convicts’ chief executive officer. “As craft brewers, we have long admired the quality and spirit of the Ballast Point brand and team. Their best in-class brewing standards will remain unchanged, delivering the same high-quality, award-winning beer 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 and Convicts together.”
Sales and marketing are the first points of order called out by Kings and Convicts, which will utilize Ballast Points U.S. distribution network in 49 states (all except West Virginia). Ballast Point beers are also distributed to 19 countries. Production volume for the current calendar year is expected to come in above 200,000 barrels. Financial terms of the deal-which is expected to close in a matter of months, once all licenses and permits have been received-were not disclosed.
“We look forward to engaging the community and getting a connection back to the local markets through our distributor partners, on- and off-premise retailers and our dedicated salesforce ambassadors,” says Chris Bradley, Kings and Convicts’ chief operating officer. “Ballast Point has well-established R&D programs and we want to continue fostering that innovation and experimentation by listening to our consumers and serving specialty and local beers in each market.”