From Big Beer buyouts, to selling minority stakes to private equity firms craft beer is in the throws of upheaval and its landscape is ever changing. Ballast Point is one of the biggest breweries in the US (31st biggest to be exact) and it looks like it will add to the change by becoming a public company and selling its stock on the open market.
They recently filed ans S-1 with the Security and Exchange Commission. These filings mark that a business is going public and will make it’s company’s shares available on the stock market, in this case the NASDAQ.
Craft beer makes up about 11% of the $100 billion a year beer US beer market. But according to Forbes there could be another strategy to going public. With all the sales to Big Beer and private equity firms, perhaps the owners of Ballast are using this IPO as a different way to cash out.
An IPO filing is another way for founders and investors to cash out, though this route hasn’t been nearly as popular.
They have long been rumored to be the next brewery to either buyout of make some sort of ownership change, due to their immense growth and reach.
Net revenue surged to $48.9 million in 2014 from $26.4 million the year before. Already for the first six months of 2015, net revenue stands at $51.7 million. The brewery is profitable – it generated nearly $6 million in net income in the first six months of this year.
Ballast Point is in the same neighborhood as many of the recent other breweries that have been bought out, or have sold partial equity. As we covered last month, the total economic impact of recent craft beer sales accounted for about $250 million or 1.25% of the total craft beer market.
Craft beer produced nearly 22 million barrels of beer in 2014, which was a 17% increase over 2013. The total 2014 volume for the above breweries equates to roughly 1,022,000 barrels a year, which is about 4.6% of the total 2014 volume.
Craft beer accounted for $19.6 billion in sales in 2014. Using our assumptions, we can deduce that the total economic output of these acquisitions equals approximately $244,400,000, or 1.25% of 2014 craft beer sales.
I am curious how the BA will classify Ballast Point after it goes public. Breweries such as Sam Adams, Red Hook and Kona are also examples of craft-esque breweries to sell shares on the stock exchange and all three are considered craft, but only after recently lifting the ceiling of barrel production to 6 million annual, to accommodate the massive growth of Sam Adams. Though being defined as “craft” definitely doesn’t hold the weight it once did. Ballast hopes to grab the ticker symbol PINT on the Nasdaq.