It was reported yesterday that Ballast Point Brewing is shutting down it’s Temecula Based brewpub as well as it’s wood aged beer facility in San Diego. This news coincides with news that Ballast Point’s parent company is having a great deal of buyers remorse, adjusting their books with a 108 Million dollar impairment charge to mirror reality after the 1 Billion dollar transaction from 2015.

While we feel badly for the employees that have lost a job over these closures, none of the grim news coming out of Ballast Point is all that surprising after following them and their history for as long as we have.

Ballast Point Brewing ramped up operations prior to their 2015 sale, rapidly building up their brewhouse, they took their local cult favorite, Sculpin IPA and strapped a rocket to it, captipulting it as far and wide as possible. If I was Constellation Brands, I too would have been mesmerized by the San Diego based brewery’s ability to go from a small San Diego favorite to a nearly national force in such a short amount of time.

Perhaps I was too skeptical, but ultimately I was correct, Ballast Point would have to change from what they were, a small lovable company who made great beer, to an aggressive beverage company in order to hang with the big boys in the market. To be extra clear, I am referring to Stone Brewing, Sierra Nevada, Firestone Walker, Lagunitas Brewing and ABI’s The High End. As time has passed, and watching the news unfold, those in charge of Ballast Point have failed to make the necessary moves to fill the big shoes given to them by Constellation Brands. Let’s take a closer look at some factors that have lead to their parent companies disappointment from a marketplace perspective.

Price wars

Constellation bought Ballast Point right at the peak of this wave’s craft beer popularity. Big box stores tripled their fridge and shelf space dedicated to craft brands, and everyone was doing well at the time. Boldly, Ballast Point took their insanely popular Sculpin, put it into six packs of cans, made fruited variations of it and charged an absurd $17 a box. This was alongside Stone’s IPA at $12 a six pack, Lagunitas IPA at $9 a six pack, Firestone Walker at $9 a six pack and Sierra Nevada at $8 a six pack. This was also around the time that ABI began filling up baseball stadiums with Goose IPA and lining shelves with $7 sixpacks of their crafty offerings. I penned my thoughts a while back that either the market would catch up with Ballast Point on the abnormally high price or they would have to quickly adjust to fit in with their peers. It wasn’t until 2018 that we saw a slide down to $12-13, which is still not looking good next to less expensive, comparable options. If the goal was moving liquid as the big boys say, this misstep has cost them the most.

Adaptation

One thing that San Diego locals loved the most about Ballast Point in San Diego was that they often blazed the trails for new styles of beer, were never afraid to experiment and push the envelope. They were likely one of the first to brew the West Coast Session IPA, mimicking all the things we love about a West Coast IPA with a lean malt/alcohol bill, they were most likely the first to hit a homerun with a grapefruit IPA, years before everyone in the market gave it a go, and they couldn’t do wrong even with the weirdest ingredients. Not long after the sale, they jumped the shark by riffing on all their hoppy ales, adding fruit flavoring that many deemed artificial. Many of these products are no longer on the shelf and rightfully so.

So what did Ballast Point do to blaze new trails or at the very least, keep up with their contemporaries? Nothing much to be quite frank. Once deemed one of the best IPA makers in the country, they haven’t released anything that resembles a New England Style IPA. We’ve seen that style can scale up and sell well. They never capitalized on their Victory at Sea line, which could have been a ‘Black Friday’ favorite in the same vein as Bourbon County. If you think I’m exaggerating, look no further than Ballast Point’s listed lineup on their website. They have beers that people haven’t cared about in years or new products that overlap their existing ones. Obviously, there are still plenty of people buying their products, they still are not keeping up at the level they used to.

Branding

The nautical theme of Ballast Point was very appropriate for San Diego. It made sense even for those of us in Southern California who didn’t live in the coastal areas of San Diego. Kona Brewing largely sells their beer based on fond memories of vacations in Hawaii to those in the lower 48 states. The magic that Kona Brewing has captured has not been captured for Ballast Point with their fish and boating motiv. I could be wrong, but their branding doesn’t seem to translate well outside of their original home market.

Conclusion

You combine abnormal price points with passé styles and unrelatable branding, and you have suits in New York City scratching their head at what exactly they purchased for 1 Billion dollars. If any of the original talent that created this magic long ago is still working for the company, Constellation would be best served to see if they can create some new magic, if not, we’ll probably be seeing another sale of Ballast Point, this time, for a lot less than 1 Billion.