In another sign of craft beer’s slowing growth, Constellation Brands has sold Ballast Point Brewing to the private investment company Kings & Convicts.
Constellation bought Ballast Point back in 2015 — during the boom of alcohol corporations snapping up craft breweries — for a reported price of about $1 billion.
Terms of this latest transaction were not disclosed.
Kings & Convicts owns several brewing assets in its home area of Chicago. The company has signed an agreement with Constellation to acquire the Ballast Point brand, plus a number of its associated production facilities and brewpubs, excluding Constellation’s Craft & Specialty operations in Daleville, Virginia.
This transaction is expected to close by the end of Constellation’s fiscal 2020.
“We’re excited to welcome the team at Ballast Point into the Kings & Convicts family,” says 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.”
As part of this agreement, Kings & Convicts will retain all positions within Ballast Point’s existing workforce, with plans to hire additional resources to support the future growth of the business.
“Trends in the U.S. craft beer segment have shifted dramatically since our acquisition of Ballast Point,” says Bill Newlands, Constellation Brands president and chief executive officer. “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 maximizing growth for our high-performing import portfolio and upcoming new product introductions, including Corona Hard Seltzer, scheduled to launch this spring.”
Constellation expects to realize slightly improved depletion and margin trends for the beer business upon close of this transaction, the company says in a release.