Meet Ballast Point’s New Owner

Speaker 1: 00:01 Earlier this month it was announced that ballast point brewing company had been sold again this time to Kings and convicts. It's a small brewery from Illinois, constellation brands. The owner of Modelo is U S beer company, sold ballast point to Kings and convicts for an undisclosed amount. Now ballast point's new owner will be moving its headquarters to San Diego. Joining me to discuss plans for the brewery is CEO of Kings and convicts Brendan waters. Brendan, welcome to San Diego. Thank you very much. Good to be here. You know, before this sale, most San Diego beer aficionados hadn't heard of Kings and convicts. What would you like them to know about the company and your beers? Well, I think no one's heard of it. So even in Chicago land, no one had heard of us. So it's not that I'm, I wouldn't be worried about that, that you hadn't heard of us. Speaker 1: 00:46 No one has. But I think that, uh, what I'd like people to know is, you know, we're a small craft brewery and we, we brew B because we love brewing B and we're, we're a couple of homebrewers that, uh, that started only a couple of years ago. And in, in doing so we started to engage with the, the craft beer community and try to understand how to grow. And that's one of the reasons we found ballast point. Yeah. We went and spoke to them and they helped us with some of our, the, our direction on the new, some of the new B that we were doing in some of our new build out. And so really we're a small brewery that brews pilsners and Isles Mike. My partner's English, he's the King. I'm Australian, I'm the convict. And so a lot of our bees are actually based on, you know, be that we've traveling around the world. Speaker 1: 01:30 The places that we've come from, they're based on that. And you and your partner have been called craft beer rookies. Would you agree with that? Absolutely. Yes. I mean, there's no hiding it. I mean, I brewed when I was back in college, 20, 20 odd years ago. And you know, we started up, uh, two years ago brewing home home, you know, home brewing again in, in a place, you know, in Highwood, Illinois. And Chris went back, he's a biochemist. He went back and went to Bruce school. So we are rookies. We haven't got that long history of brewing, but you know, part of home brewing is trial and error. And that's what makes craft be so interesting. But it's also one of the things that we love about ballast point. They've got a wonderful history, they've got great capability, wonderful quality and great quality controls. Speaker 1: 02:14 The, the, the people that are in the company a fantastic. So we're going to re we're going to lean on them. So part of this is, you know, we might be rookies, uh, in craft brewing, but ballast point isn't, and that's why we love them. And you mentioned that your, your business partner was biochemist. Yeah. Um, you know, you, both of you have had a good deal of success in other professions. Tell me a bit about your, you and your partners backgrounds? I'm curious. So, so Chris is more of a technology guy, big production and, and has, you know, um, studied as a biochemist. He has worked for a lot of major companies around the world. And so from a, from a manufacturing and process driven background that he has come from, that will work very well within, within ballast point myself. I've had, I've pretty much worked for myself the last 20 years. Speaker 1: 03:00 Yeah. I've had to, you know, I get to eat what I kill and so, and so I've got an entrepreneurial bent. Uh, and I've been in the hotel industry, I've been in, uh, technology and I've been in consulting as well. And so I think coming to this, we bring a lot of different sort of skill sets to the craft beer world. And we know that we don't know everything. And so I think that we, coming into balance point, working with ballast point, we're going to learn a lot of them. But then I think that they're also going to learn a lot of us. And part of it is that we don't have all the answers and we'll work together in a collaborative effort with the people of ballast point. And so to give them a little bit of freedom again, give them a little bit of impetus to uh, innovate and uh, sort of let the shackles off and, and, and be, be that independent craft brewer again. Speaker 1: 03:49 And do you plan on keeping all the ballast point employees? Absolutely. And we're hiring more. Yeah. Now this sale will allow ballast 0.2 again, we consider it a craft brewery. What do you think the benefits of that are? I think two fold. Number one, there is a perception that, you know, ballast point when it went to the big, big Bay brand of constellation, um, wasn't true to its roots that the BIA changed and, and we know better, but there is a perception there that uh, that occurred. I also think from our point, allowing ballast point to, to do collaborative efforts with other breweries to try new things that may not work on a national scale, but for our, from our standpoint, letting, letting them brew different beers. Again, letting, letting ballast do things that are a little bit wacky and out there in left field. Speaker 1: 04:37 And so that's a, that's a, a real tangible difference that we'll see and why independence in craft is important and Kings and convicts is much smaller than ballast point. What do you see as the other benefits to the brand being owned by a small company? So we are tiny people. People call us a microbrewery. I think the better term is nanobrewery coming into ballast point. The things that we will bring is that focus back on creativity that focus back on community and letting, letting the, the ballast point employees, all of them engage with the direction of, of ballast point. And so being a small company like we are with nine employees, uh, compared to the 560 employees of ballast point, I actually think we, we offer that true independence coming back, allowing ballast point to do what they used to do so well. They grew from Homebrew roots and they loved, they loved being that independent brewer. Speaker 1: 05:40 And so I think that's what a small company like us can come and deliver the ballast point and sort of unshackle them again. And speaking of employees, you mentioned hiring more, how many more do you think you'll, you'll hire? The first year we are looking to hire anywhere up to 70 employees and we have, you know, we've got to recreate a marketing team. We've got to recreate our sales team. There's a, there's additional people on the floor that we need to get brewers. Uh, we need quality people. So there's a lot of different areas that we're going to have to, to bulk up again and, and recruit. And so we've got that already underway. So over the, over the course of the next couple of months until we close the deal, we're already out there looking for looking for employees. You know, at one time ballast point sales were up to 431,000 barrels a year. Speaker 1: 06:25 This year they're expected to be around 200,000 barrels. What's the sweet spot for you? Do you want to see that grow or stay about the same? I think for us this has got to be about stable organic growth. Meaning let's just settle everything down. Let's focus on brewing good beer, let's focus on brewing good beer in markets that we should focus on. So we are not owned by a private equity firm, we don't have a big hockey stick in terms of sales that are acquired. We would rather grow profitably in the markets that make sense for ballast point. You mentioned the markets, what are those markets you want to focus on? So the biggest, the biggest one is California. Uh, it, it remains one of ballast points, most important markets. Um, and I'm going to go further here and say San Diego County. Yeah, this is ballast points home and in some respects I think balance point may have lost, you know, being part of constellation may have focus too far and wide. Speaker 1: 07:24 And I think the only way to do that is let's go and look after our home market. And so California is very, very important for us. International markets, oddly enough, are going to be very important for us too because Kings and convicts will work in Australia. And New Zealand. And so we're gonna rely upon the, the help of, uh, of our friends at ballast point to help us brew some of our bees as small as we are, but for international markets. And then a lot of the solid markets that ballast point used to be in, in the Western areas of, of the U S but then in Kings and convicts, home market, you know, Illinois and Wisconsin, uh, are a really good craft beer market and ballast point is known over there. Ballast point's known over there better, better than Kings and convicts. And so we just need to engage with those big markets, the Northeast, some of the Southeast. Speaker 1: 08:13 There are some that we really do have a great foothold in with ballast point that we just need to focus on. What do you foresee as some of the challenges King's and convicts and ballast point we'll go through? I think, uh, I think a lot of the challenges, um, that any normal company would coming out of a much larger entity, uh, number one is settling down all the employees and making sure that they feel that they're, they're part of this. Again, that's only going to happen with the actions that we take and that we do what we say we're going to do. I think also perception we have to reintroduce ballast point into the market. Um, in terms of, uh, in terms of being an independent craft brewer. So we're going to get that message out. How we get that message out is probably like don't things like I'm doing right now. Speaker 1: 09:00 And, and also, you know, going on these pub crawls, going and talking to people. We're not going to do some big fleshy ad campaign. Kraft has to be done at the community level and it has to be done at the, at the, at the B level level. And so it's, that's a lot of hard work. So this is not a quick, quick thing. It's not a quick fix. People just have to see us in the community and see that we are, we are truly independent and craft again and, and, and back to what ballast point was, I have been speaking to Kings and convicts, CEO Brendan waters. Brendan, thank you very much. Yeah, thanks very much.