Good Beer Hunting

Ballast Point Dulling — Barrel-Aged Beer, Veteran Employees Go Down the Drain

Photo by Michael Kiser

Photo by Michael Kiser

In his final days at Ballast Point Brewing Company, James Murray watches as about 1,300 oak barrels’ worth of wood-aged beer are dumped and destroyed. It's an unfortunate metaphor for how far the California brewery has fallen over the course of Murray’s 14-year tenure. His last day serving as vice president of brewing is Friday, two weeks after he put in his notice to supervisors.

Murray’s watched thousands of gallons go down the drain as part of the closure of the brewery's San Diego-based Trade Street R&D brewing facility, one of two locations ceasing operations after an April announcement of financial troubles and lagging sales.

"Our goal is to right-size our investment, resources and align with consumer trends," Stephanie McGuane, communications and brand PR for Constellation Brands' beer division, told GBH at the time.

"I understand it," Murray tells GBH separately during his final week at Ballast Point. "They don't have a sales force to actively sell obscure, barrel-aged, and sour products."

Regardless of the reasoning behind the beer dump and other moves, it reflects another step toward what could be seen as stronger corporatization of a business that was once a jewel of the American craft beer industry. Production fell by about 110,000 barrels from 2016–2018, and shopper interest at grocery, convenience, and other stores is way off pace in 2019. Closing in on the halfway point of 2019 (through May 26), the Ballast Point family of brands has sold just under a third of its packaged product as it did in all of 2018, setting it up for a third-straight annual decrease by year end.

2019 has shown to be a disappointing start for the brewery, and a disappointing end for one of the final holdovers from what could now be seen as Ballast Point's glory days.

"I helped build and maintain this beautiful culture and awesome facilities, but they didn't quite share that same vision," says Murray, in reference to the leadership at Constellation Brands, which bought Ballast Point for $1 billion in 2016. "It's time to move onto some new adventures and see if I can't replicate that magic somewhere else."

He's taking time off to spend with family before determining where that alchemy might happen next, but the last couple months show Constellation may not be able to take as relaxed an approach.

Along with Murray, two key members of the Ballast Point marketing team have also recently left the business. Hilary Cocalis, who started in February 2013 and most recently acted as vice president of marketing, and Erin Relph, a brand marketer since April 2016, are no longer with the company, according to Murray. They were two of the longer-tenured employees in that department following layoffs of about 20 people from Constellation’s Craft & Specialty beer division in April.

"We effectively don't have an internal Ballast Point marketing team," Murray says, noting that responsibilities were likely to shift to Chicago, the HQ for Constellation's beer division.

Similar worries about Ballast Point’s future were expressed to GBH this spring, following closures and layoffs. At the time, a former employee told GBH that staff losses matched a loss of identity both in stores and at the brewery. Those developments took place against the backdrop of Constellation’s continued push for its import portfolio; the multinational also brought in executives and other staff whose backgrounds are in Corona and Modelo, not IPAs and Blonde Ales.

Along with staffing changes, additional adjustments have been made to employee benefits.

About six months ago, Murray says Constellation discontinued monthly $100 gift-card credits for employees, which were designed to be spent on food, beer, homebrewing supplies, and merchandise from Ballast Point shops. At the same time, another change removed a "shift beer" policy that allowed for a free pint each day of work, with any additional pours coming at a discount. That was reinstated about three months ago, according to Murray, and staff now get a monthly card that allows for a certain number of pints.

These changes—layoffs, the loss of senior leadership, killing specialty programs, reduced benefits—can be seen as collective evidence of the further assimilation of Ballast Point into the Constellation orbit, not to mention a further loss of its own brand identity. Ironically, this kind of corporate behavior more closely aligns with assumptions beer fans and professionals often voice about Anheuser-Busch InBev’s potential treatment of its craft subsidiaries. Instead, AB InBev moves have often balanced less-desirable but predictable changes such as increased bureaucracy, outsourcing for core brands to AB facilities, and tightening of budgets with more positive changes such as elevating and promoting craft partners within the larger company, creating collaboration between brands, scaling up specialty offerings, instituting safety regulations, expanding benefits and pay, and expanding packaging and distribution capabilities.

“The best thing we can do for our craft partners is get out of their way and let them do great things,” Megan Lagesse, head of communications for AB InBev’s Craft Business Unit, told GBH in February. At the time, Wicked Weed Brewing co-founder Walt Dickinson was trying to launch a new, undetermined business venture in Atlanta.

“Constellation Brands continues to support national distribution of Ballast Point products, ensuring consumers across the country can continue to experience the same high-quality, award-winning beer they have come to enjoy,” says Constellation’s McGuane, who adds that, because Ballast Point has been “a cornerstone of the San Diego community for more than 20 years,” it will “continue to invest in a robust presence in our home market of Southern California.”

“We are proud of the team's dedication to the craft, commitment to quality, and innovative approach, and look forward to continuing to serve the craft community,” she adds.

The current developments are simply the latest in a series of changes that started three years ago, and which included the departures of nearly all key leadership. Ballast Point's founder, CEO, CCO, COO (and head brewer), general counsel, and lead R&D brewer—all different people—left within a one-week period in July 2016. Since then, the brewery has seen a precipitous drop in production and sales. In the last two years, the situation has gotten so bad that Constellation has recorded almost $200 million in impairment charges for Ballast Point, writing off a chunk of the original purchase price due to unrecoverable losses.

Outside the financial ramifications, Murray says losses in morale have impacted the work environment.

“We built camaraderie among employees and just had a phenomenal culture of showing up to work, kicking serious ass, having a couple of beers with each other, and repeating the next day,” Murray says. “We all felt very blessed to be able to do this for a living.”

A decade ago, Murray says “quality, friendship, and dedication” defined what it meant to be Ballast Point. Quality is “absolutely still a priority” and focal point, he says, but he isn’t so sure about how far the other two still go.

“There are people that will stay dedicated and groups that will stay friends,” he says, “but I’m not positive what the future will hold.”

Words by Bryan Roth