Show notes
Craft Brew News - 12/13/19
(Courtesy of Brewbound – www.brewbound.com)
The Wine Group Chairman Backs Kings & Convicts in Ballast Point Purchase
Richard Mahoney, the chairman of the board of The Wine Group, is the lead investor in Chicagoland craft brewery Kings & Convicts’ acquisition of Ballast Point Brewing Company from Constellation Brands, according to the Chicago Tribune.
The Wine Group’s 25 wine brands include Cupcake, Franzia, Flip Flop and Benziger.
Since Constellation Brands announced the deal to unload Ballast Point, industry observers have pondered the sale price for the San Diego craft brewery that sold for $1 billion in cash just four years ago. Subscription-based newsletter Beer Business Daily reported that Credit Suisse analyst Kaumil Gajrawala pegged the transaction at under $100 million.
According to financial services firm Cowen, Ballast Point sales are down 32% year-to-date.
Brooklyn Brewery Restructures U.S. Sales Staff
Brooklyn Brewery has restructured its U.S. sales team in an effort “to better reflect the realities of the current U.S. beer market,” the company announced this week.
“Simply put, craft brewers have been putting too many resources into hand selling, and have been under-investing in the marketing and brand building sides of the business for too long,” the company said. “In some markets supplier reps outnumber distributor reps, with craft brewers continually adding staff and creating a headcount race that isn’t sustainable. We have not been immune to this problem, and today took the step to reduce our sales force to a more rational level.”
In July 2017, Brooklyn announced plans to create a national sales and distribution platform with more than 150 sales personnel and brand ambassadors covering 38 states. As part of those plans, Brooklyn combined sales forces with California’s 21st Amendment (21A) and Colorado’s Funkwerks. Brooklyn, which sold a 24.5 percent stake to Japan’s Kirin Brewery in October 2016, acquired undisclosed minority stakes in both craft breweries.
Constellation Brands CFO Named New CEO of Canopy Growth
Canadian Cannabis company Canopy Growth Corporation announced today the appointment of
David Klein as CEO, effective January 14, 2020.
Klein has served as the chief financial officer of Constellation Brands since mid-2015. Klein’s appointment as chief executive comes just two months after he was named chairman of the Canadian cannabis company’s board of directors. He will step down from his CFO role at Constellation upon assuming the Canopy CEO role.
Canopy Growth and Constellation Brands have been intertwined since the New York-headquartered beer, wine and spirits company made its first investment of $191 million in the cannabis company in October 2017. All in, Constellation Brands has invested $4 billion in Canopy Growth for a 38% ownership stake in the company.
The move comes a week before THC-infused beverages and edibles will become legal in Canada on December 17.
Klein’s ascension to CEO follows a turbulent run for Canopy as the company’s financial results continued to underperform. Canopy announced in June that co-founder and co-CEO Bruce Linton had stepped down as CEO. Linton, however, told CNBC at the time that he was “terminated.”
Constellation has recorded more than $590 million in losses on its $4 billion investment in Canopy, though CEO Bill Newlands expressed confidence in Canopy’s plans during Constellation’s third-quarter earnings call.
Canada legalized recreational cannabis in October 2018.
Foolproof Brewing Founder Lists Rhode Island Craft Brewery for Sale
After seven years, Foolproof Brewing founder Nick Garrison is seeking a buyer for his Pawtucket, Rhode Island-based craft brewery.
Garrison said, “It’s largely a personal decision,” After working for nearly a decade in the industry, it’s just time for the next chapter.”
Garrison declined to share a selling price.
Foolproof’s assets include its 30-barrel brewhouse and 1,000 sq. ft. taproom, as well as the building and land the brewery sits on.
In 2018, Foolproof produced an estimated 3,120 barrels of its 10,000-barrel capacity brewery, although the company did not provide final volume data. That figure, however, is down from Foolproof’s peak production of 3,900 barrels in 2016.
Foolproof’s beer is sold in Rhode Island, Connecticut, Massachusetts, Vermont, New Hampshire, Maine, New Jersey, Delaware, the city of Philadelphia, and the United Kingdom.
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