Billion Dollar Beer

Get ready for a lot more of this.

Earlier this week, Ballast Point Brewing & Spirits was sold to Constellation Brands for $1 billion. With a B. I read the news on my phone just after I woke up Monday morning and audibly said “Holy shit.” The announcement sent shockwaves throughout the craft beer community, with the main reaction consisting of phrases like “selling out,” “never drinking their beer again,” “another one bites the dust,” and other vitriolic knee-jerk epigrams. I understand why, too. I, for whatever reason, felt a bit personally hurt by the news. Intellectually, it’s not hard to understand: you don’t turn down a billion dollars. Emotionally, however, I have felt strong ties to Ballast Point since my earliest days of drinking craft beer, when a Big Eye IPA made me realize what people meant by “West Coast IPA.” Ballast Point was my introduction to the San Diego craft beer world I have come to love and admire so much. My first (of many) craft brewery t-shirts was a black Victory at Sea shirt that my girlfriend gave me for Christmas. I remember visiting their Scripps Ranch brewery when they were still renting the space, and watching the expansion of the facility on each subsequent visit. I visited their second location in Little Italy the first week they opened, and then hung out there whenever I visited San Diego, excited to try all the R&D beers brewed at their pilot brewery. Of the 1,250 different beers I’ve tried, 50 have come from Ballast Point alone—more than any other brewery. Ballast Point was the first brewery I was actually passionate about, and the news of them selling the company took the wind out of my sails.

“Calm Before the Storm” was a pretty appropriate name for this beer seven months ago.

Of course, this was only my initial reaction. With time to think about it, let alone analyze the details of the buyout and read what the brewery’s official response has been, it becomes abundantly clear why this was the correct business decision for them. It provides Ballast Point with tons of capital to expand their brewing capacity and distribution networks, with my assumption that they will quickly enter the top ten or fifteen breweries in terms of barrel production nationwide. All news coming out of the brewery insists this is a hands-off sale and that the brewing staff and management will not change, but simply have more resources at their disposal. I hope this is true and that they continue to create quality beer for a growing market. The main fear, of course, is that with rapid expansion and production volume increases, quality will suffer. I’m not the first to point out that Ballast Point’s flagship beer, Sculpin IPA, tastes like it has dipped a few notches since they promoted it to their flagship beer about three years ago. It’s also likely that the beer has stayed the same, but over that same period of time, my palate has changed and grown more immune to hop bitterness, and the beer consequently seems to have more of a malt character than it did before. The other question, and one that people plugged into the craft beer community seem to care about, is whether or not the sale qualifies as “selling out?” While some have automatically labeled this as a move that directly puts money spent on Ballast Point products into the pockets of AB-InBev, the multinational colossus of a beer company, the details are a little more complicated. Basically, Constellation Brands owns the U.S. rights to the Grupo Modelo (who makes Corona, Modelo, et al.) because of antitrust issues that came into effect when AB-InBev acquired the Grupo Modelo a few years ago. So Constellation Brands went from merely importing these Mexican beers to opening large-scale breweries here in the States. It’s incredibly complicated, but should you be worried about supporting the king of Macrobrews by buying Ballast Point beer? The answer is: not really.

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The oldest photo I could find from Ballast Point. Back when Instagram filters were all the rage.

What this sale does make abundantly clear is the impact that craft beer has over the beer market as a whole. A growing market share each year would not keep going unnoticed by bigger companies with more money and resources. But one thing that I am certain of is that the folks at Ballast Point honestly love beer. Their original brewing facility, even before their half-warehouse in Scripps Ranch, is Home Brew Mart, which serves as a lasting testament to brewing. Yes, they serve increasingly mass-produced Sculpin on tap, but the employees are just as happy to show customers exciting new hop varieties and offer brewing advice to people who want to brew themselves. My hope for the company is they are able to keep their zeal for beer alive because of record profits, not in spite of them. I will continue to drink Victory at Sea regularly, as well as many of the other Ballast Point beers I have come to love, but not out of blind faith. If I feel a drop in quality arises because of expanded production, I have no problem relegating their beers to my fond memories instead of my refrigerator. What ultimately drives (or should, at least) the beer market is drinking what you like. If you like it, drink it; if you don’t, don’t. There are thousands more breweries where that one came from.


What do you think? Did Ballast Point sell out? Is this sale different from AB-InBev buying up other breweries like Elysian and Golden Road?  Let me know in the comments!