Constellation Brands, the third-largest beer company in the U.S., with Corona, Modelo and Pacifico in its portfolio, has purchased San Diego’s Ballast Point Brewing and Spirits for $1 billion. The sale of the craft brewery is the latest deal in the torrent of mergers and acquisitions that have reshaped the beer industry in 2015.
Ballast Point was founded in 1996, and — fueled by the popularity of brews such as Sculpin IPA and Victory at Sea — grew into a marquee craft beer brand. Ballast Point has helped develop a market for premium-priced brews with their flagship Sculpin IPA, which is regularly priced at over $15 a six-pack.
It’s this “highest end” of the market that’s a key draw for Constellation. The acquisition of Ballast Point gives Constellation an important slice of the expanding super-premium beer market.
The Ballast Point brand has also grown aggressively over the past several years, expanding production capacity and nearly doubling sales in 2015. Ballast Point filed an application for a public stock offering in October, and this “IPA IPO” got the attention of Constellation Brands, who swooped in with the $1-billion offer before the public had a chance to buy their own piece of Ballast Point.
The Ballast Point sale announcement comes just days after Anheuser Busch InBev’s historic acquisition of SAB Miller, which created a monolithic conglomeration of international brands. Other major beer industry deals in 2015 include Heineken working a deal to purchase half of craft pioneers Lagunitas Brewery, Firestone Walker Brewing “partnering” with Belgium’s Duvel-Moortgat, San Diego start-up brewery Saint Archer selling to MillerCoors, and Los Angeles’ Golden Road Brewing selling to Anheuser Busch.
Ballast Point, which employs around 500 people across its four California facilities, will continue to operate as an independent company in the Constellation Brands portfolio.
With just about six weeks left in 2015, how many more craft beer brands will sell to larger companies before 2016?