Last week, three senior executives left Ballast Point Brewing and Spirits in a surprise leadership shakeup at the company just eight months after its acquisition by Constellation Brands for $1B. In the past 24 hours, three more have left, including Jack White (founder), Yuseff Cherney (COO, head brewer, and co-founding distiller), and Nathan Stephens (R&D brewer).
WHY IT MATTERS
This is an astonishing loss of leadership for the fast-growing company that makes Sculpin IPA, a high-margin juggernaut in the craft beer world. Ballast Point is the first craft beer acquisition for Constellation Brands who many have argued paid an irrational premium for the brand even when it was assumed that leadership would hang around.
We're left with an unprecedented scenario. Can a brand like Ballast Point or Sculpin ever return on that $1B investment without its core founding team and lead brewers in place? Will this go down as one of the most costly gambles in craft beer history, or will it be a miracle turnaround with an all-hands-on-deck scenario to keep it on an even keel. (See what I did there?)
It also begs the question: what would motivate such an abandon-ship move from the leadership, timed together as it perhaps was? Since the spirits division of the company wasn't part of the acquisition deal, White's and Yuseff's leadership will continue there, according to sources familiar with the matter. And it's reasonable to assume that close relationships from the beer side will follow them there sooner rather than later. It could be all but a mutiny.
In all seriousness, this is a company to watch. In all my years of work as a strategist, I've never seen a company recover from such a massive brain-drain—and the collective timing of so many announcements would suggest there's a company-wide loss of morale. My gut says that a few stand-out Ballast Point brands like Sculpin will continue to find new customers as part of a portfolio of craft beer brands from Constellation alongside new entries like Tocayo. But what we're unlikely to see, despite many who will surely give their best efforts, is a Ballast Point master brand that continues to enchant the market like it has for so many years on the reputation of its many impressive leaders and innovators. And that might poorly reflect on the spirits brand as well, if it indeed continues to carry the Ballast Point name.
For everyone's sake, I hope the ranks run deep.
More out the door — via Brewbound