It's a reversal of the familiar scenario in which a big-name craft brewer is bought out by a multinational "big beer" consortium. This time, the brewer has been bought back from an international consortium.
On Tuesday, Kings & Convicts Brewing Co. announced they had purchased Ballast Point Brewing Co. from Constellation Brands. Constellation is a Chicago-based company that owns American rights to Mexican brands including Modelo, Corona and Pacifico. Ballast Point, founded in 1996, was a darling of the California craft brewing scene, known for their line of Sculpin West Coast IPAs, and was bought out in 2015 for $1 billion. The mythical "synergy" of the merger never materialized, and Constellation began cutting personnel and closing locations.
Kings & Convicts was founded in 2017 by CEO Brendan Watters, a native of Australia, and brewmaster and COO Chris Bradley of Great Britain. It's estimated they will have produced 660 barrels of beer by the end of 2019, while Ballast Point will have made 200,000 barrels at several production breweries and taprooms. If closed, the deal will include Ballast Point's taproom on Chicago's Fulton Market District, and California facilities in Downtown Disney/Anaheim, Long Beach, Miramar, Little Italy, and San Diego.
“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,” said Bradley in Kings & Convicts' news release “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.”
Chicago Tribune beer writer Chris Noel interviewed Watters when the deal was announced. He told Noel that he was golfing which an unnamed Constellation official, and casually asked whet they intended to do about Ballast Point's sinking fortunes. Watters gathered some friends to fund the purchase, with a price that was not disclosed, but was admittedly less than the $1 billion Constellation paid for the brewer.
Ballast Point is currently sold in all 50 states, and 19 countries. Kings & Convicts has, by Watters own admission not yet become well known in the Chicago market. In January, they announced plans for a 48,000 square foot production brewery and tap room, to open in Pleasant Prairie, Wisconsin. It's expected both breweries would be making each others' beers. Very likely the deal would allow K&C access to Ballast Point's distributor network as their production expends.