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Craft Beer

Question for Ballast Point: What the heck is going on?

ballast_point_miramar
Ballast Point’s tasting room in its Miramar headquarters.
(Courtesy/Ballast Point)

Since Constellation Brands spent $1 billion to buy Ballast Point in 2015, we’ve seen aggressive growth, frantic retrenchment and now plummeting demand.

Here’s a simple question: what the heck is going on at Ballast Point?

Since New York’s Constellation Brands spent $1 billion to buy the Miramar brewery in 2015, we’ve seen aggressive growth (outposts in Chicago, Long Beach, downtown Disney), retrenchment (closing a barrel-aging facility here, scrubbing a planned San Francisco brewpub) and now plummeting demand.

Constellation’s first full year owning Ballast saw a 55 percent rise in production, pushing it to an all-time high of 431,000 barrels in 2016. By the end of last year, though, production had slipped to 320,000 barrels.

Seeking an explanation, I contacted Ballast Point and Constellation. When neither responded, I called Bart Watson, chief economist at the Brewers Association, a national trade group.

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Some of Ballast’s woes, Watson said, may be traced to its success. Backed by Constellation’s marketing arm, Ballast was able to sell its iconic Sculpin IPA and other beers to restaurants, taverns and supermarkets from coast to coast.

“Having to defend that territory,” Watson said, “that’s a real problem.”

Especially as many beer fans gravitate toward neighborhood breweries, which can quickly adapt to local tastes and trends.

Watson cited several other potential factors: Ballast was tardy in adopting hazy IPAs and brut IPAs, both hot sellers; some craft beer purists abandoned the brand after its sale to a corporation; Constellation, the U.S. distributor of numerous Mexican beers, may be shifting its focus to more profitable brands.

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“Constellation may be spending that marketing money on Modelo, which is making them a lot of money,” Watson said. “That’s always a risk when you sell to a larger corporation. You no longer control where the money is spent.”


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