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Fermented Strategies - Lets Buy All of the Breweries - Issue #13

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December 10 · Issue #13 · View online
Fermented Strategies - Craft Brewing Industry Newsletter
Last Tuesday we got hit with the big news that an ownership group consisting of the owners of Kings and Convicts Brewing acquired Ballast Point Brewing Co. from Constellation Brands for pennies on the dollar. This was big in a number of ways.
One, it was Constellation Brands throwing in the towel on their big craft beer acquisition that they purchased in 2015 for $1 billion (which Constellation Brands admittedly overpaid for). An executive for Constellation Brands noted that they missed truly understanding the craft beer industry when making the acquisition, noting that the hyper-localization of the industry proved tough for Ballast Point to make sustained inroads.
The second being further proof of the continuing trend of mergers and acquisitions as the industry matures. Regional breweries and even some microbreweries are getting stuck in a rock and hard place as distribution has gotten harder with distributor consolidation and not having the proper scale to continue their growth trajectory. For regionals, that means needing to sell in order to grow or sustain the brand. For microbreweries, that means either retreating to a taproom focused model or needing to buy or sell in order to get the scale to make distribution a strong profit center in the business.
I don’t expect these types of deals to slow (and rumor has it that a few other breweries that Constellation Brands had acquired are on the selling block) and I expect to see more micro breweries acquire each other as well.

Time to Register for Unfiltered
Sign ups are open for our annual brewery conference, Unfiltered, on January 28, 2020 at Skeleton Key Brewery. You can sign up here. During the conference, we will be presenting our annual Benchmarking report and have guest speakers talking over taproom operations and marketing. Please reach out if you have any questions.
More analysis from the Ballast Point Sale
A Falling Star — Constellation Offloads Ballast Point for a Fraction to Unlikely Investors
Constellation Brands Selling Ballast Point Proves What Beer Aficionados Already Knew Constellation Brands Selling Ballast Point Proves What Beer Aficionados Already Knew
Ballast Point's rise, fall and re-sale: inside craft beer's most baffling deal - The San Diego Union-Tribune Ballast Point's rise, fall and re-sale: inside craft beer's most baffling deal - The San Diego Union-Tribune
At Lance CPA Group, we partner with craft brewery owners who embrace unconventional risk and strive for creativity. Those who lend themselves to change, remain transparent and without pretense are the breweries that thrive.
To learn more about how we work with breweries, visit our website at https://lancecpa.com/craft-brewery-cpa/
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