Ballast Point Sold to Tiny Chicago Brewery Kings & Convicts, in 2019’s Weirdest Beer Story
It’s not even a contest, is it? The idea that Ballast Point Brewing Co., for which Constellation Brands paid $1 billion only four years ago, is being acquired by a small Chicago suburban brewery with less than 200 Twitter followers has got to be the strangest, most inexplicable beer industry story of 2019. Everything about the headline “Kings & Convicts Brewing Co. acquires Ballast Point” beggars belief to the point that many in the beer community seemed to doubt whether the story was even real when it broke this evening. Of course, the true story is that Ballast Point is being acquired by the group of investors behind Kings & Convicts, but that doesn’t make the story any less inscrutable.
Here’s the long and short of it: After massively overpaying for Ballast Point right before growth in the craft beer industry began to slow down, Constellation Brands seemingly developed a serious case of buyer’s remorse. Ballast Point production decreased by 13% in 2017 and again by 15% in 2018, down hugely from its peak of more than 430,000 barrels in 2016. What has followed has been a wave of cost-cutting measures, including the dismantling of Ballast Point’s sales network and the closure of several brewpub location. Now, only four years later, Constellation is calling it quits and passing the brewery off to Highwood, IL’s Kings & Convicts brewery for an undisclosed sum.
The question, naturally, that passed like a lightning bolt through the entire beer world, was something along the lines of “who???” Kings & Convicts is a veritable unknown in the industry, open only since 2017, and apparently producing a mere 660 barrels of beer this year. And now the company has acquired Ballast Point, which will make almost 200,000 barrels in 2019.
Clearly, none of this adds up, but at the very least it points to extremely deep pockets on the part of the new ownership group at Kings & Convicts, which has expanded to six people: CEO Brendan Watters, co-founder Christopher Bradley, and four silent partners, who Watters told The Chicago Tribune “love Ballast Point, but don’t want notoriety and want to remain quiet.” Watters, on the other hand, is a former hotel exec at Boomerang Hotels, who sold the chain in 2015, presumably making a pretty penny in the process.