Why Ballast Point Failed to Dominate the World
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.
July 23, 2019 @ 4:28 pm
Loved their Habenero. I wondered what was going on. Really enjoyed the grapefruit also. Very willing to pay bit more for a good beer…and Ballast Point won me over. Kinda sad.
June 14, 2019 @ 5:48 pm
I only disagree on the branding. I bought BP because of their dope branding. Then they got bought out and dumbed it down. Now it’s just sterile and easy to pass over on the shelf.
April 23, 2019 @ 9:55 pm
Had the regular Sculpin a few times. It’s good but it’s not $14-16 / 6 pack good! Never really bought much by them due to their absurd prices, I just can’t swing that.
Was in San Diego about a month ago and went to one of their brewpubs. Eh, it’s fine. Lotsa hype, not a lot of follow through (these days at least). Pretty disappointing
April 18, 2019 @ 5:58 pm
That blackberry sour is so epic though.
April 18, 2019 @ 5:17 pm
Many, many IPAs ago, I happened upon an IPA top ten list. This was years before the time I could go to any grocery or gas station (in Florida) on a highway and get crafty beer. So I went to whole foods to see what they had from said list and see where the bar for IPAs had been set out West.
I only remember two beers from the list. Coming in at #1 was Sculpin. I probably paid five for a single can as the price seemed astronomical. I was none too impressed. It was enjoyable, but certainly not twice as good as the best I’d had. It was clear to me that this was a pretty can for people who shop at whole foods.
I’ve given Sculpin and Grapefruit Sculpin a whirl once or twice since but always with the same conclusion.
The other beer I tried that day was equally obscure (to me anyways.) I’m was also expensive to my tastes but competitively priced. Ballast Point got my $5, and Bell’s Two-Hearted got a repeat customer.
Now, I can drive fifteen minutes and get some fantastic beer that was canned a few days earlier. (I’d take Motorworks Pulp Friction against Grapefruit Sculpin any day.) So I do. And when I don’t feel like going out of my way, I balance my favorites and variety, but I never get Ballast Point.
April 18, 2019 @ 5:00 pm
I think it’s more a classic case of the Craft market correcting for its own values. Craft drinkers want to support local, independent brewers, not one of the big corporate “craft” entities. Ballast was a great San Diego brewery, but trying to go big and corporate and national just doesn’t work well in the craft world. Most of the sellout breweries have tanked pretty hard after being sold. Craft consumers (not all, but many) are conscious of who owns these places and make buying choices accordingly. Also, the soul of craft is being a local business, connected to the community, and being creative and innovative with the beers you make. Becoming part of a profit-above-all corporate beverage company doesn’t support that, as you say, they just want to “move liquid” and make bucks. That means creativity and niche beers go out the window in favor of whatever can move the most SKUs through the supermarket. Most craft consumers aren’t in it to buy the same ‘ol mass-market IPA from some other state any more than they want to buy the same ‘ol mass-market lager from AB or MillerCoors. Corporate people don’t understand that mindset, that’s why they keep doing faceplants with all of these buy-outs. I hope they’ll learn to leave well enough alone, but probably not: they have a lot of money to burn!
April 18, 2019 @ 4:55 pm
The real bad move was rebranding Fathom as just another IPA… Bring back the IPL!
April 18, 2019 @ 7:58 am
Constellation did a wrong move, payed too much, planned too little. The essentials of Ballast Point got lost among piles of money. I’m from Rio de janeiroand had the opportunity to drink some Ballast beers. Before 2015. And I just loved it. After the 1 billion transaction, which I did not know about at that time, Ballast disappeared from the market down here. It left a great impression in every craft beer lovers. RZ
April 17, 2019 @ 12:06 pm
They caught lightning in a bottle with grapefruit sculpin, and unfortunately continued to seek out more lightning at an astoundingly bad price point. Do we really need 20 variations of Victory at Sea and sculpin? No. Save that for the tasting rooms to bring in people seeking something different.
Sadly, these movements left no room for their best core beers, Sculpin and Grunion.
Their only hope is to abandon all the adjuncts, and launch a new sales and marketing push to “revisit the brews that got you into craft” and go with 3-4 core SKU’s (and occasional seasonals) at a more wallet-friendly price. Maybe even revisit the formula for Fathom and Dorado to reflect the tastes of the moment.
If I can get Grunion for $11-12 a six pack of cans, I’m buying that all day long. That said, I haven’t seen Grunion on a shelf in 6+ months.
May 13, 2019 @ 2:12 pm
THIS! Where the hell did Grunion go?
I’ve only been able to get it at their taprooms and I never see on shelves anymore.
Lost their base, their core for sure.
I’ve been a longtime fan of Firestone Walker too but at least after being purchased by Duvel their new stuff they come out with is actually interesting and it’s marketed to be a little bit lofty which ultimately is what hipsters as well as craft lovers want.
April 17, 2019 @ 11:37 am
Agree completely with the statements and sentiments of this piece. Still, the Temecula closure was odd–open on Monday, closed w/o notice on Tuesday, save for an afternoon Facebook post. And while I don’t presume to know the financials, the place always seemed busy, and popular with a well-dressed millenial crowd. With a Barrel Republic coming to Old Town soon, I think I know where some of those folks will end up.