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Constellation Brands Closing 2 Ballast Point Locations, Abandoning Plans for San Francisco Brewpub

Discussion in 'Beer News & Releases' started by Todd, Apr 17, 2019 at 1:58 AM.

  1. Todd

    Todd Founder (5,663) Aug 23, 1996 California
    Staff

    More: https://www.brewbound.com/news/cons...ns-abandoning-plans-for-san-francisco-brewpub
     
  2. ESHBG

    ESHBG Aspirant (238) Jul 30, 2011 Pennsylvania

    Overpriced, now mediocre beer leads to a decrease in sales and profits? I'm shocked.
     
  3. Zorro

    Zorro Poo-Bah (4,387) Dec 25, 2003 California

    Should have done more than add fruit to beers they already make.
     
    KevSal, mschrei, JohnnyHopps and 14 others like this.
  4. TrojanRB

    TrojanRB Meyvn (1,283) Jul 27, 2013 California
    Society Trader

    Maybe they should just increase the price of their six packs from $14 to $18?

    (Please make sure your sarcasm detectors have fresh batteries)
     
    RyanK252, KevSal, bstyle and 28 others like this.
  5. beertunes

    beertunes Poo-Bah (5,791) Sep 24, 2007 Washington
    Trader

    My heart cries.
     
    SFACRKnight likes this.
  6. Oktoberfiesta

    Oktoberfiesta Aspirant (257) Nov 16, 2013 New Mexico

    Not surprised. That Temecula space Looked quite lavish and never full. After already spending a billion, they go out and create 4-5 new spaces/breweries/brewpubs. I don't get it. Their big push did not pay off.

    I always felt taprooms in under fulfilled areas could work. But we may be looking at smaller more niche breweries trying that vs. the big boys. It has to be and feel organic, or it can get called out quite easily.

    Sad to see them lose out on craft reps, and have the import reps do the heavy lifting. That plan is really working out. Lol. Looks like bbl is down too. Three more bad years and I can see them shuttering completely. They will cut their losses and go All in on the imports
     
    ArlVABeerGuy and Number1Framer like this.
  7. pro100

    pro100 Disciple (301) Oct 12, 2014 California
    Society

    "Fell from top ten to not mentioned at all"
     
    benzodrums likes this.
  8. MistaRyte

    MistaRyte Devotee (464) Jan 14, 2008 Virginia
    Trader

    BP bashing and all, I'm glad the VA facility survived.
     
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  9. southdenverhoo

    southdenverhoo Disciple (364) Aug 13, 2004 Colorado

    I wonder how many bad, bad decisions in the industry we love started out with the thought, “If Ballast Point is worth a billion dollars, we must be worth X!”
     
  10. billandsuz

    billandsuz Disciple (384) Sep 1, 2004 New York

    " I can confirm [the] closure of these two facilities due to right-sizing our cost structure based on recent craft trends,” spokeswoman Stephanie McGuane wrote to Brewbound via email.

    Oh man. That's off on so many levels.

    "Right sizing our cost structure"? Say that out loud. Fucking robot. Nobody but corporate people speak that way. I think she meant to say "We are closing these facilities because we were too stupid to calculate how many barrels of beer we needed to sell to get back our one billion dollar investment".

    "Based on recent craft trends"? Constellation may want to rethink that statement. Perhaps "While it's true the craft beer segment continues to expand everywhere else, we royally fucked up and managed to turn a leading brewery into a dog in just three years."

    Otherwise spot on.
    Jesu Christo.
     
  11. Ranbot

    Ranbot Zealot (567) Nov 27, 2006 Pennsylvania

    Or even more generally advertising is most effective when the range in difference between products is relatively small. e.g. AAL beers, Coke vs Pepsi, Bose vs Sennheiser, Reebok vs Nike, Gucci vs Chanel, McDonalds vs Burger King, Honda Civic vs Toyota Corolla, Wal-Mart Vs Target... and on and on....

    But it's the most popular beer in the world!
    [​IMG]
    :wink:
     
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  12. drtth

    drtth Poo-Bah (3,779) Nov 25, 2007 Pennsylvania

    Except you are ignoring those new craft beer trends that in fact changed the game and that only showed up after the purchase of BP.
     
    rodbeermunch likes this.
  13. billandsuz

    billandsuz Disciple (384) Sep 1, 2004 New York

    But it was no secret, least of all to beer executives, that craft beer growth would inevitably slow.

    And it was immediately understood that the $1,000,000,000 price tag was far too much.

    And while I wouldn't expect them to admit it, those executives are not paid to understand their market today (anyone can do that). They get paid to forecast industry trends.

    They fucked up.
     
    Roguer likes this.
  14. jrnyc

    jrnyc Meyvn (1,085) Mar 21, 2010 New York
    Trader

    overpaid?? Shocked to hear this! The regional/national breweries all picked a bad time to expand/acquire as the local breweries were exploding. Before local scene in NYC exploded, 99% of IPAs I bought were purchased off the shelf, Stone, Ballast Point, Green Flash, etc. Now 99% of what I buy is purchased directly from local breweries.
     
    #14 jrnyc, Apr 17, 2019 at 3:47 PM
    Last edited: Apr 17, 2019 at 3:55 PM
  15. Domingo

    Domingo Poo-Bah (2,291) Apr 23, 2005 Colorado
    Society

    IMO, it's the industry rather than the quality of their product. People are going to those little brewpubs in their neighborhood or buying their local stuff more and more.
    Some of those larger brands should probably focus on the areas of the country that don't have a lively beer scene. There are plenty of places where the Sculpin variants are the best beer for miles and miles.
     
  16. GetMeAnIPA

    GetMeAnIPA Zealot (564) Mar 28, 2009 California

    Maybe they should release more sculpin varieties?

    Family has annual passes to Disneyland and when the new location opened up in Downtown Disney I was stoked to finally have a good place to eat with good beer. Then I went and they want $11 and $12 for 16 oz pours.
     
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  17. maximum12

    maximum12 Poo-Bah (4,017) Jan 21, 2008 Minnesota
    Trader

    That's too bad. I get the "bought out" hate, but Sculpin was one of my first IPA crushes, & I'd still happily buy it if I could find it fresh.
     
  18. drtth

    drtth Poo-Bah (3,779) Nov 25, 2007 Pennsylvania

    Yes, yes they did. So did Smuttynose, Green Flash, Stone, Deschutes and a few others who also seem to have made the same gamble, i.e., that several years of double digit growth would continue. Similarly lots of regional distribution craft brewers didn't fully appreciate the effects of the growth of small, local and fresh on their sales, e.g., Sierra Nevada, Boston Brewing, etc., etc.

    There's no shortage of brewers who misread the trends and got caught by surprise/short/whatever.
     
    Roguer, Damian, HopsAreDaMan and 6 others like this.
  19. cambabeer

    cambabeer Meyvn (1,070) Dec 29, 2010 New York
    Society Trader

    If you're into podcasts, I listen to Steal This Beer, and they had the VP of operations from Ballast Point on as the guest this week, so this is timely. It was pretty interesting.
     
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  20. onezendad

    onezendad Initiate (17) Apr 16, 2018 Ontario (Canada)

    "Indie" Beer arguments aside. the VA facility is beautiful and i enjoyed the beer I had there. SUch an amazing view from the patio.
     
    Reef and MistaRyte like this.
  21. Oktoberfiesta

    Oktoberfiesta Aspirant (257) Nov 16, 2013 New Mexico

    Hypothetically, if BP was still independent and expanded to 5-6 states every year, was their model ever really sustainable? Constellation kind of got sold a false sense of growth. Like really. No one saw this coming? Biggest con EVER right there.

    I think BP would be struggling with or without Constellation. $13-$16 sixers of regular core ipas are not sustainable. I'm not even sure half of these breweries have back up plans. What was BPs? Remember they were trying to go public. Would their stock be tanking right about now?
     
  22. Ranbot

    Ranbot Zealot (567) Nov 27, 2006 Pennsylvania

    In fairness, the exorbitant price structure might be Disney's fault.
     
  23. GetMeAnIPA

    GetMeAnIPA Zealot (564) Mar 28, 2009 California

    True that. But I don’t see as much inflation at other restaurants in downtown Disney as it’s not actually inside Disneyland. Karl Strauss inside California adventure is $10. I’ll take aurora hoppyalis over a $12 sculpin any day. The only problem is there isn’t food, it’s just a Karl Strauss beer truck.
     
    #23 GetMeAnIPA, Apr 17, 2019 at 5:02 PM
    Last edited: Apr 17, 2019 at 5:10 PM
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  24. Ahonky

    Ahonky Initiate (157) Feb 13, 2018 New York

    I don't know who has lost their way more, Ballast Point or Victory. Two "craft" titans who are sinking like concrete turds
     
  25. thuey

    thuey Aspirant (254) Nov 13, 2015 California

    As a San Franciscan... YES! I'm happy for the news.
     
    KevSal likes this.
  26. rgordon

    rgordon Savant (909) Apr 26, 2012 North Carolina

    Our wholesale operation acquired Ballast Point through the demise of a small regional wholesale company that we purchased. Selling these beers from the beginning was tough. Sculpin was good, but there seemed to me to be a hollowness in some of the other offerings. The dark beers were generally very good. I loved Victory at Sea.
     
  27. Crusader

    Crusader Aspirant (264) Feb 4, 2011 Sweden

    It was easier to uphold the notion that these breweries had come up with something special when there were fewer breweries over all. The specialness commanded higher prices. But then everyone and their mother starts a brewery and people realize that just about anyone with a basic brewery and a basic understanding of brewing and the willingness to purchase and use alot of hops can produce the same kinds of beers, and the specialness evaporates (understandable so in my opinion). Certainly there has also been a shift in preferences as to the particular substyle of IPA, but the fact that the smaller breweries can almost overnight build such demand for their beer means that commanding loyalty and pricing at BP's level becomes very difficult I would say. And then you have the appeal of local for actual locals, and the appeal of the grass being greener for non-locals visavi new and small breweries. The grass being greener mentality is interesting I think, since it almost seems like people think that it's become too easy to get beers that they like, and want to make it harder in order to achieve some intangible feeling which has been lost to them amidsts a process of commoditization of hoppy beer. How can something possibly be special if it's available all the time and conveniently accessed? I guess it's just human nature but it's still fascinating I find. We take things for granted, we want what we don't already have. Surely there is something better out there etc.

    Back when Michael Jackson was writing his books, had Ballast Point Sculpin existed then, and in the absence of its modern day competitors (which I wager number in the thousands as far as American IPAs go), I bet he could have written at lenght about it's qualities and generated a near mythical aura around it similar to other classic beers which he wrote about.
     
    #27 Crusader, Apr 17, 2019 at 6:12 PM
    Last edited: Apr 17, 2019 at 6:19 PM
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  28. MNAle

    MNAle Meyvn (1,398) Sep 6, 2011 Minnesota
    Society

    The Constellation purchase of Ballast Point was announced in 2015.

    Do you have evidence that industry insiders were forecasting not just the slow down but the restructuring from national and regional brands to hyper-local brewpubs? Other examples have been given in this thread of other major players who were also caught off guard.

    Hindsight is 20/20 and all that...
     
    #28 MNAle, Apr 17, 2019 at 6:14 PM
    Last edited: Apr 17, 2019 at 6:20 PM
  29. donspublic

    donspublic Poo-Bah (1,662) Aug 4, 2014 Texas
    Society Trader

    This can go back to the thread where Constellation explained how they were marketing their beers and they viewed Sculpin as the premium brand that the other BP beers would lead them up to and thus it was going to be at a higher price point.... I think those days have gone. I was thinking that with this merger they were going to use their purchase power to reduce their resource cost at BP and be able to sell Sculpin at a price point that would make it competitive with other IPA's (yes I like this beer). I will grab one of these when I am out and it is on tap (like @JackHorzempa) when the extra cost isn't that big a margin, but I refuse to pay $3 more a six pack for this beer than I can another local/national IPA that is of the same quality and usually fresher ($12 six packs sit on the shelf for a while when $8-9 locals fly). So they took their wine marketing and applied it to beer, which nowadays doesn't mean much. Seriously if I am walking thru a restaurant and I see a bottle of Camus on the table, yes I am somewhat envious. But if I see a guy drinking a Sculpin, the first thing I wonder is how old is that bottle.....
     
  30. SFACRKnight

    SFACRKnight Meyvn (1,294) Jan 20, 2012 Colorado
    Trader

    I remember how excited people were in CO to get sculpin. The trends in craft beer have changed since then, clearly.
     
  31. Domingo

    Domingo Poo-Bah (2,291) Apr 23, 2005 Colorado
    Society

    Absolutely. At one of the first large tastings I went to we did a head-to-head with Sculpin vs. Pliny. Probably 75% of the group preferred the Sculpin. These days I bet most of us would probably turn our nose up at it even if it tastes mostly the same. Perception goes a long way.
     
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  32. JohnnyU6

    JohnnyU6 Initiate (15) Jun 14, 2017 New Jersey

    Do we actually care? It's only beer. Ballast Point is only just like Stone. The only difference is that Stone is "Independent". They're just both shelf stuffers. I will buy a product of theirs on occasion. Who cares?
     
    #32 JohnnyU6, Apr 17, 2019 at 11:20 PM
    Last edited by a moderator: Apr 17, 2019 at 11:36 PM
  33. Pandab33r

    Pandab33r Initiate (15) Mar 29, 2019 California

    Shouldn’t have fired their sales staff and been more modest about their pricing.
     
    rgordon likes this.
  34. the_trystero

    the_trystero Disciple (339) Mar 19, 2013 California

    I understand opening spaces in the right spots but the Temecula spot is not one of them. My parents have lived up the hill from the Ballast Point space (Captain's Cabin previously) since 1987 and that spot is isolated from all the other stuff that Temecula has to offer. Constellation has the capital, they should have grabbed a spot in Old Town to capture all the people bar hopping on foot or shopping at all the other places.
     
  35. TheInsomniac

    TheInsomniac Initiate (57) Jan 11, 2015 New Mexico
    Society

    Overhopped IPA sucks. Don't @ me.
     
  36. denver10

    denver10 Poo-Bah (2,448) Nov 17, 2010 New Mexico

    My question would be, in 2019 are those places that don't have a lively beer scene that way because the customer base doesn't want it or because the local market is not providing it? I don't know the answer but suspect it would be more the former at this point in time.
     
  37. timobkg

    timobkg Aspirant (205) Aug 24, 2006 New Jersey

    Heh, that makes me feel better as I've always preferred Sculpin to Pliny. :slight_smile:

    But at the same time, if I'm spending $16 on a pack of beer I'd rather get 4 16oz cans of whatever new NEIPA the local breweries are putting out than a pack of Sculpin. I still like Sculpin, still think it's good, but it's not as exciting as the constantly rotation selection of NEIPAs from local breweries.
     
  38. TrojanRB

    TrojanRB Meyvn (1,283) Jul 27, 2013 California
    Society Trader

    Except Stone, Green Flash, etc, etc........

    The list is long, and distinguished.....
     
  39. TrojanRB

    TrojanRB Meyvn (1,283) Jul 27, 2013 California
    Society Trader

    They need to focus on their core offerings and eliminate the crap “indulgences”/distractions. Ex: focus on Sculpin, Victory at Sea. Kill: Indra Kunindra, all their sours, etc...

    They churn out an amazing amount of random crappy beers. I can only begin to imagine how many resources and brewing capacity are wasted on these follies.

    They also have a freshness problem they need to solve. Even here in SoCal, it’s hard to find their beers under 3 months old.
     
    KevSal likes this.
  40. JHurley6

    JHurley6 Aspirant (224) Nov 20, 2015 North Carolina
    Society Trader

    i also see CBS, KBS, BCBS, The Abyss, Speedway Stout, BA Ten Fidy, Firestone, Russian River, even Abraxis (occasionally) sitting on shelves around the country-oversaturation, or the best of beer times with so many choices.