The Ballast Point Brewing tasting room and kitchen in Daleville will close Sept. 29.
The brewery will remain open, said Maggie Bowman, a spokeswoman for Constellation Brands, which owns Ballast Point.
Ballast Point, founded in San Diego in 1996, opened its Daleville tasting room and restaurant in June 2017 in a 260,000-square-foot building that also houses its East Coast brewery. The closure directly affects 25 full- and part-time employees and 16 temporary employees, according to a news release from Botetourt County.
“We thank the local Daleville community, its surrounding neighbors and our taproom employees for their support and dedication over past couple of years,” the company said in a statement. “We will continue to make a positive impact to the local economy through the operation of the Daleville brewing facility, which represents a robust hub for Constellation’s future innovation in support of our specialty portfolio.”
The brewery will become an innovation hub for Constellation Brands to produce new beers, flavored malts and hard seltzers, Botetourt County Administrator Gary Larrowe said.
“We’re disappointed in today’s news, but the sun cannot shine every day,” he said. “We have enjoyed Ballast Point. They’ve been great folks to work with.”
Larrowe said the social and community aspect created at the tasting room will be a loss.
The company did not give a specific reason why it was closing part of the facility beyond saying that “growth in craft beer is being driven largely by local brands” and because of that they are “reallocating Ballast Point investments to drive growth in core local markets.”
The move follows a national slowing of the craft beer industry. Constellation Brands, the third largest beer company in the country, also closed two Ballast Point Brewing facilities in Southern California and canceled a plan to open a brewpub in San Francisco this year, according to Brewbound, a trade publication.
Nationally, the craft beer segment is growing, but more slowly as people drink more wine and spirits. The craft beer segment grew just 4% in the amount of beer sold by volume in 2018, according to the Brewers Association, a trade group representing small and independent craft brewers.
More than 1,000 new breweries opened across the country in 2018 despite the lack of sales growth. The Roanoke and New River valleys have seen a profusion of locally owned breweries open, particularly in the past five years.
Bart Watson, chief economist for the Brewers Association, said the organization saw that same level of growth in the first half of this year and expects the total number of breweries to rise sharply.
Watson said the Ballast Point news matches what he has seen nationally.
“It’s challenging to build national brands right now,” he said. “We see brewers that are able to do it, but you have to stand out to be relevant.”
Watson said the farther breweries expand out of their home base, the bigger challenge they have in building loyalty with local consumers, who are more likely to support craft breweries based in their own towns or regions.
Watson said most of the growth he sees in the industry is coming from microbreweries and brewpubs operating in tight geographical areas.
Deschutes Brewery announced in 2016 that it would build its East Coast expansion in the Roanoke Centre for Industry and Technology — a $95 million project that would employ more than 108 people. But last year, the company said market conditions caused it to reevaluate its expansion.
The company bought the land for its project outright to free itself from the performance agreement and timeline. The project likely will be smaller than originally planned.
Deschutes, which is based in Bend, Oregon, is not the first West Coast brewery that canceled its expansion plans on the East Coast. California-based Green Flash brewery, which opened in 2002, took on debt to open a site at Virginia Beach in 2016. But last year, it shut down that location and stopped distribution in multiple states. New Belgium Brewing Co., which is based in Colorado but also has an Asheville, North Carolina, location, laid off about 30 employees companywide.
Ballast Point was the first industrial-sized brewery for the Roanoke Valley. The company expected to produce 2.5 million barrels of beer by the end of 2021 at the Daleville location, according to a production schedule that is part of a performance agreement struck between Botetourt County, its economic development authority and the company.
Botetourt County provided $1.4 million in tax incentives, along with performance grants estimated at $650,000. The company also received a $2.4 million grant from the Commonwealth’s Opportunity Fund to assist with its opening in Daleville.
Larrowe said Ballast Point has not yet reached its milestones for beer production or the total number of employees outlined in its performance agreement, but the brewery could still fulfill its requirements through the production facility.