The big news on the craft brewing industry M&A front this week is that Ballast Point Brewing in San Diego sold to Constellation for an unimaginable sum of…wait for it…a billion dollars! Ballast Point is only expected to produce about 290,000 barrels of beer this year, but in addition to their new brewery they opened earlier this year, they also have a home brew mart, (where it all started), a small craft distillery at the old facility, and an awesome restaurant at the new brewing facility.
The going rate for snapping-up craft breweries was previously about $1,000 per bbl. until this most recent colossal sale, which is more than 3x the previous mark. Given Ballast Point’s portfolio of beers and how popular Sculpin IPA is, along with the spirit division, the restaurant, a billion bucks is probably not too far off the mark for what Ballast Point is worth; especially looking forward, and how much the brands may deliver down the road. Somebody obviously did the math – you don’t just plunk down a billion bucks without good reason.
So, the bar for what well-established craft breweries are worth has definitely been raised. It will be interesting to see if other craft breweries, who have adamantly vowed to stay independent, will stick to their guns or succumb to the lure of huge dollars and cash-in. I guess we will just have to stay tuned!