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Ballast Point, Once Sold for $1 Billion, Offloaded to Tiny New Brewery in Wild Deal

Kings & Convicts, a small brewery in a Chicago suburb, is now at the helm of one of the country’s most recognized beer brands

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Six packs of ballast point beer Photo by Justin Sullivan/Getty Images

Just four years after leading San Diego IPA-maker Ballast Point sold to beverage giant Constellation Brands for a cool $1 billion, Constellation is offloading Ballast Point to a tiny Chicago-area brewery for an undisclosed sum — presumably way, way less than what it paid originally. The Highwood, Illinois brewery, called Kings & Convicts, announced the deal yesterday.

That means Kings & Convicts, a 2017-founded company that’s still basically unheard of even in the Chicago area, is now at the helm of one of the country’s most recognized beer brands. It’s a head-turning sale that reverses one of the craft beer world’s most famous acquisitions — and it could challenge the idea that big beverage companies are bound to snap up independent breweries.

Kings & Convicts produces just 660 barrels of beer per year, while Ballast Point produces 200,000, supplying grocery stores and bodegas across the country with signatures like Sculpin IPA. Kings & Convicts will retain Ballast Point’s branding while operating its own beer label, too. “Our goal is... to grow both Ballast Point and Kings & Convicts together,” said Kings & Convicts’ CEO Brendan Watters in a statement from the brewery.

Constellation, headquartered in New York, is the country’s third largest beer company, pumping the US full of imports like Corona Extra, Modelo, and Pacifico. Since the beverage company bought Ballast Point in 2015, other craft breweries have followed the same trajectory. Lagunitas, for example, was snatched up by Heineken in 2017, Anchor Steam was bought by Sapporo, and just weeks ago, Japanese beer giant Kirin bought Colorado’s New Belgium.

But Constellation’s sale of Ballast Point complicates the narrative that mass-market consolidation is the future for craft beer. One possible misstep: Under Constellation’s guidance, Ballast Point may have expanded too quickly. It closed three facilities last year in Virginia and California, cancelling plans for further expansion including a proposed San Francisco brewpub.

Kings & Convicts plans to retain Ballast Point’s 560 employees. It also inherits Ballast Point’s four California locations, including a flashy new taproom in Downtown Disney and its original home brew supply shop and tasting room in San Diego, a space credited with kicking off much of the contemporary American beer boom. The deal also gives Kings & Convicts an added presence in Chicago, where Ballast Point opened a brewpub in 2018. Last, Kings & Convicts will push forward with another brewery of its own, in the works for Wisconsin.