Say you owned a small business and you had such a great year that a larger corporation offered you $1 billion to acquire your company. Would you be able to turn down that offer? Highly unlikely, which is why the acquisition of Ballast Point Brewing by Constellation Brands is not a “sell out” as many are labeling it.
Selling out, at least to me, is not just selling your small company to a monolithic one, but rather it’s selling your company to another whose ideals goes against yours, all for the mighty dollar.
Fans and other craft brewers are understandably upset with Ballast Point’s decision. It’s never fun to watch one of your own jump ship, especially when your goal is to weaken Goliath, not strengthen him. But Ballast Point made a business decision, one that according to the press release is apparently structured to keep them as an independent brewer, while gaining additional financial support and the ability to expand their growth in the United States quicker. That’s not selling out, that’s smart business.
Ballast Point was started back in 1996, and they reached $12 million revenue back in 2012. Last year that did four times that: $48.9 million in revenue. That boost in growth had the owners looking into becoming a publicly traded company, which is likely what caught Constellation’s eye.
Unless major changes occur in-house at Ballast Point, this acquisition should remain an arm’s length transaction. If Constellation wants to see an actual return on their investment, their best move is to let Ballast Point continue doing what they do, but give them the ability to expand their territorial reach and bigger and better equipment.
If you go by the Brewers Association’s definition of what constitutes a brewery being a craft brewery, then Ballast Point will no longer be a craft brewery. But that doesn’t mean their independent style has to change, nor does the beer they produce. Not everyone’s philosophy is to take on the giants of their industry and trying to put an onus on Ballast Point to stick with their roots is as silly as saying you’d turn down a $1 billion offer.
