Over the past several years, the contract-brewing model has become increasingly popular, with entities that previously had, in some cases quite sizable production facilities opting to enlist the services of other breweries to produce their beers. Doing so not only allows a company to spend less money on overhead, employees, benefits and other operating expenses, but also focus on other aspects of the beer business beyond manufacturing. These include sales, marketing and operation of public venues such as tasting rooms and restaurants.
Businesses that have made this transition on a large scale include Latitude 33 Brewing and Mason Ale Works. The latter is now producing and selling far more beer than it did when it operated breweries in San Diego’s North County, and is currently searching for a local site to house a branded taproom.
And now another large beermaker – one of the county’s largest – is making the transition to having its beer contract-brewed as it switches its near-term attention to distribution and its public venues. That business is Ballast Point Brewing, which this week ceased operation of its Miramar headquarters after finding another business to take over the production side of that 107,000-square-foot brewery, bar and restaurant. As part of the transition, a number of Ballast Point’s production staffers have been laid off.
Ballast Point is operated by parent company Kings & Convicts Brewing. That organization was originally based in Illinois but relocated its operations to the Miramar facility not long after acquiring Ballast Point from Constellation Brands – the beverage conglomerate that famously purchased the company for $1 billion in 2015 – for pennies on the dollar in 2019.
“It’s been a hard week, but we had to right the ship” says CEO Brendan Watters, who says the one-million-barrel brewery was too big, completely unworkable and constructed for the express purpose of selling the business. “I’ve been trying to get us out of there for the better part of a year-and-a-half. We brought other breweries in [on a contract-brewing basis] to try to fil it up. It’s too big, and that ain’t Ballast Point. Ballast Point is Scripps Ranch back in the day, grinding 24 hours a day.”
Kings & Convicts had high hopes for reinvigorating the Ballast Point brand, including owning its home county. Those efforts were immediately hampered by the ill effects of the COVID-19 pandemic, and while the brand was later given extra visibility care of high-profile sponsorships of local sports teams and sporting venues as well as the opening of a brewery-restaurant in San Francisco, most of its ambitions went unrealized.
In 2022, Kings & Convicts took over the Miramar brewery and Leucadia tasting rooms vacated by Saint Archer Brewery when its parent company, Molson Coors, discontinued the underperforming brand. By the following year, Kings & Convicts had consolidated its operations to Ballast Point’s headquarters, leaving the Miramar facility to eventually be taken over by Fall Brewing and the satellite taproom by Duck Foot Brewing.
Ballast Point will continue to operate its bar and restaurant at the Miramar facility as well as its brewpub in downtown San Diego’s Little Italy neighborhood, Home Brew Mart retail spot in Morena and other public venues throughout California. Those include the aforementioned San Francisco location, plus restaurants in Long Beach and Anaheim.
“We’ve signed a contract with another company that will take over the Miramar brewery. In the short-term, we will be working with them on a contract basis to fulfill our taprooms and distribution while we try to acquire or build another San Diego facility, ideally with an 80-to-100-barrel brewhouse. That will allow us to crank things out and make money from them,” says Watters. “We want to bring Ballast Point back to what it is, a premium brand on the West Coast.”
Ballast Point Brewing’s headquarters is located at 9045 Carroll Way in Miramar