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04/07/2017

Expect Double Digit Growth for Ballast Point, Sez Constellation, As It Invests, Innovates

Ballast Point was “number two dollar growth contributor” in US craft last yr, “adding almost 11% of craft industry volume growth and posting double digit depletion growth,” Constellation ceo Rob Sands said during co’s fiscal yr earnings call yesterday.  And Constellation expects double digit growth this yr too, Rob said (Ballast down slightly in recent 4 week periods in scan).  How?  Through expanded distribution, new brands like Red Velvet Nitro, Bonito Blonde Ale, Monterey Double IPA and Sea Rose Tart Cherry, planned “increase” in “sales and marketing investments” while “leveraging Constellation resources like national accounts.”  Ballast Point’s Virginia brewery will be brewing “this fall.”

Distribs Will “Get Rid of No Name… Fly-By Night Brands,” Sez Rob Sands Distribs “have not given up in any way, shape or form” on craft, reassured Rob. “They are beginning… just like the retailer, to take a more measured approach to it and realizing that it doesn’t make sense for them to carry every SKU under the sun and they have to pare down in that regard.”  That’s a “good thing,” maintained Rob, and good for Ballast Point.  Then Rob made some rather pointed remarks about what he thinks will happen next with distribs:  “They’re basically going to get rid of all this no-name stuff that they know is fly-by-night” especially if co “behind them” doesn’t “have the wherewithal to support the brand.”  So, Rob concluded: “I think that shake out is going to work greatly to our favor” when distribs see “that we’re bringing resources to this that the other competitive brands can’t necessarily bring to the party.  Some can. Some can’t.”  Hmmm. If AB made remarks like these, craft brewers would probably be up in arms.

Interesting that Wall St analysts had almost no questions on Ballast this time, even tho Ballast has slowed.  Last qtr, they asked more questions. This time, they seemed focused on dazzling earnings numbers and growth guidance for Constellation’s Mexican beer biz.  Recall, Ballast Point only 2% or so of STZ volume, 3%+ of sales.  And it’s no longer all incremental, so less of an area of focus for investment community.

Publishing Info

  • Year: 2017
  • Volume: 8
  • Issue #: 30
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