The latest craft beer maker to get swooped up by a major booze brand is San Diego’s Ballast Point. According to Reuters, Constellation Brands Inc.—which sells Corona and Modelo—is buying the craft brewer for a cool $1 billion dollars (yes, that is with a “b”) to help it compete in the “fast-growing craft beer market.” Ballast Point makes beers like Sculpin IPA and is expected to have sales of $115 million this year.
The purchase price is impressively high, especially compared to other deals made with craft brewers. In 2011, major beer conglomerate AB InBev purchased Chicago-based Goose Island for just $38.8 million, which pales in comparison to the Ballast Point deal. Last year, AB InBev also purchased New York-based Blue Point Brewing for an estimated $24 million and Oregon’s Barrel Brewing for an estimated $50 million.
If it cost $1 billion to buy Ballast Point how much is Sierra Nevada worth?
— Stan Hieronymus (@StanHieronymus) November 16, 2015
While the craft beer continues to grow at a tremendous pace, billion dollar deals are usually reserved for the consolidation of major beer companies, such as the recent takeover of SABMiller—the maker of Miller Lite—and AB InBev, which makes Budweiser. The deal, which is worth over $104 billion, fuses the two companies into a mega beer conglomerate that makes one-third of the world’s beer.
Not everyone is happy about the Ballast Point deal. Some are accusing the company of selling out:
Another craft brewery sells out- this time, Ballast Point Brewing for a cool $1 billion! https://t.co/MtTcp79F0w
— Great Beer Now (@GreatBeerNow) November 16, 2015
But a macro-brewery buying out a small independent brewery isn’t necessarily a bad thing. As writer Aaron Goldfarb points out, if “once-independent brewery still makes brilliant beer,” that is all that really matters, not who owns them. If anything, being owned by a larger company gives the smaller brewers more resources. Goose Island can now make more adventurous beers due to “InBev’s purchasing power in helping them acquire more barrels and pricier adjuncts.” Plus, the beers are now distributed more widely, which is good news for beer fans across the country.