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Ballast Point’s Sculpin leads San Diego craft beers to robust growth in 2015

Sculpin leads San Diego beer growth
Sculpin, Ballast Point’s pricey IPA, accounts for more than 50% of the brewery’s revenue. Above, its production line in San Diego.
(Bill Wechter)

SAN DIEGO — Raise a glass to the Sculpin Economy.

All across San Diego County, brewers enjoyed a robust 2015. New breweries opened at a rapid clip; the calendar year began with 97 local operations and ended with 114. Expanding by more than 760 jobs, the workforce now exceeds 4,500, and beer sales rose 17%, to $851 million.

Yet one beer dominated the National University System Institute for Policy Research study released Tuesday.

“A large part of that was Sculpin,” said Vince Vasquez, the study’s author, citing Ballast Point’s India pale ale. “Ballast Point doubled sales year over year, and overwhelmingly that is due to the power of Sculpin.”

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Despite all the good news, in 2015 fault lines cracked open beneath local craft breweries. In November, New York’s Constellation Brands paid $1 billion for Sculpin’s parent company. Once a local star, Ballast Point — and Miramar’s Saint Archer, purchased by MillerCoors for an undisclosed amount — raises questions about the influence of multinational conglomerates on San Diego beer.

Can locally owned brewers continue to grow and find customers? Or will they be elbowed out of markets, restaurants and bars by corporately owned competitors with superior marketing and distribution networks?

“Last year saw big, big growth for Ballast Point,” Vasquez said. “Far and away, they were the ones driving this growth.”

What Vasquez calls Ballast Point’s “monstrous” year was well underway before its sale. One measure of its growth was revealed Tuesday, when the national Brewers Assn. released its annual list of the country’s 50 largest breweries. Ballast Point moved up to No. 11 from 31st, trailing only 10th-place Stone among local breweries. (Two other San Diegans were on the list: Green Flash, 41st, and Karl Strauss, 46th.)

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Although Escondido’s Stone remains a powerhouse — this year, it plans to open satellite breweries in Richmond, Va., and overseas in Berlin — experts predict the Brewers Assn.'s data will show Ballast Point outpacing Stone.

“That’s a pretty big shift,” said Ryan Lake, a director with First Beverage Group, a Los Angeles-based private equity bank, “them overtaking Stone, given how long Stone has been the leader there.”

Ballast Point’s net revenue grew 152.6% from the 2014 to the 2015 fiscal years, while the brewery’s sales climbed from 102,575 to 250,218 barrels, according to reports filed with the U.S. Securities and Exchange Commission.

To a large degree, that growth was fueled by Sculpin, Ballast Point’s pricey IPA, which — along with variants such as Grapefruit, Jalapeño and Watermelon Sculpin — accounts for more than 50% of revenue.

“This growth was incredibly impressive,” Lake said, “especially given they were selling $15 and $16 six-packs, which is not the easiest way to grow. But I wouldn’t think there will be any change in the short term.”

Even with more corporate competition looming — Anheuser-Busch’s 10 Barrel plans to open a brewpub in East Village by year’s end — San Diego brewers should be optimistic, Vasquez said.

“Last year, one-third of the beer bought in San Diego was craft. We are going to get to the point like Portland, where it’s 40, 45%.”

Still, the greatest driver of craft beer sales in San Diego may be a native son that is now part of a New York-based conglomerate: Ballast Point.

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“Constellation,” First Beverage Group’s Lake said, “certainly has the sales and marketing muscle to help them.”

Rowe writes for the San Diego Union-Tribune.

peter.rowe@sduniontribune.com


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