Just four years after dropping $1 billion on craft brewing upstart Ballast Point, Constellation Brands (NYSE: STZ) is selling its record-making prize for an undisclosed sum (read, pennies on the dollar) to tiny operation Kings and Convicts Brewing just outside of Chicago. According to Constellation's most recent quarterly filing, it valued Ballast Point at just $17 million. Yikes.
Ballast Point will fall under the definition of "craft" again, which will likely make craft beer aficionados and fans of Ballast Point's flagship Sculpin IPA happy. But Constellation's blown keg of a deal should provide a warning to corporate beer and its attempts to respond to disruption by acquiring fast-growing upstarts. Growth via acquisition isn't all it's cracked up to be.
Image source: Ballast Point.