Anheuser-Busch buys San Diego’s Cutwater Spirits

Detail of Cutwater Spriits’ 40-foot-tall column still. San Diego’s largest craft distiller, Cutwater was founded by former Ballast Point Brewing executives in 2016.
(K.C. Alfred/The San Diego Union-Tribune)

Cutwater Spirits, a Miramar-based craft distillery built by the founders of Ballast Point Brewing, has been sold to Anheuser-Busch.

Cutwater’s line of canned cocktails was “a wonderful fit” for the brewing behemoth’s “Beyond Beer” portfolio, said Anheuser-Busch’s Marina Hahn.

“This is the time to really do our best to dominate a new category,” said Hahn, vice president of new business.

In a boozy case of déjà vu, several Cutwater executives — including founder/brewer Yuseff Cherney and chief sales officer officer Earl Kight — helped sell Ballast Point to New York’s Constellation Brands in 2015.

Ballast Point met with an immediate backlash. Some San Diego craft beer fans argued that the brewery, a local brewing pioneer, had sold out to a multi-national corporation with enough marketing power to crush smaller rivals. The sales price also drew disbelieving gasps: $1 billion.

Cherney, Kight and Ballast Point co-founder Jack White used their shares to turn Ballast Point Spirits into Cutwater. Making bourbon, rum, gin and other spirits, the distillery eventually moved into a 50,000-square-foot facility that includes canning and bottling lines plus a restaurant.

Business was good, Cherney said, but not growing as fast as he would like. Enter Anheuser-Busch.

“One of the things we always battle with is getting out products into the consumer’s hands,” Cherney said. “To be able to open that up with the Anheuser-Busch marketing network is huge for us.”

Financial terms of the deal were not revealed, although Cherney said Cutwater’s management team will remain intact.

Cutwater grew out of Cherney’s experiments with a makeshift distillery built inside Ballast Point’s Scripps Ranch facility.

“We claim the title of first distillery in San Diego since Prohibition,” Cheney said. “I think I am still making that claim.”

San Diego County is now home to more than a dozen “craft distilleries.” While Cutwater declined to state its annual production, it is in excess of 100,000 gallons a year, one of the distinguishing features of craft distilleries.