It’s been the talk of the Internet for days, but for me, it started a month ago when a trusted source in Northern California informed me that sales reps from a certain Big Beer company were crowing about how psyched they were about the impending acquisition of an undisclosed “San Diego craft brewery.” Like many who have since heard this recent rumor, I started considering which of the county’s brewing companies would be the first to sell-out to the big guys. And like many, my short-list was headed by Saint Archer Brewery. There were other potential sellers, but if ever there were a significantly sized San Diego brewery built to be sold and primed to cash in, it was this one.
In the two-plus years since Saint Archer debuted, the company has often courted controversy. Within its first several months of existence, it jettisoned one of the county’s veteran salespeople and cut ties with brewmaster Ray Astamendi, an industry trouper who has since gone on to wow local beer fans at his own operation, Fall Brewing Co., while rising to stud status as a brewhouse consultant for Premier Stainless. Upon doing so, they proceeded to hire away Pizza Port standout brewer Yiga Miyashiro to revive credibility. Thanks to he and brewmaster Kim Lutz, Saint Archer’s reputation improved, though the majority of beer nerd die-hards never bought into a marketing campaign nearly devoid of beer (mostly skateboards, beachscapes, lifestyle pics and shots of alt-sports athletes), especially when the company went against its “brewed in San Diego” branding, angering many San Diegans with a post professing the company’s affections for Dodger Stadium, while subsequently trashing Petco Park and engaging in insulting back-and-forth messages with dissenting social media users. The company released an apology about a month later, in May.
Many will not be surprised to learn that London-headquartered MillerCoors announced it will acquire a majority-share of Saint Archer. (After being denied when asked directly more than a month prior). Macrobreweries purchasing or acquiring majority shares in legitimate craft brewing companies to increase sales and market share while simultaneously chipping away at its competitor base is nothing new. It’s been occurring for some time and ramping up over the past few years with acquisitions of companies like Elysian Brewing Co., 10 Barrel Brewing Co., Goose Island Beer and, most recently, Lagunitas. This, however, is the first time this has occurred in San Diego County.
Most within the craft beer industry and its growing legions of fans concede that it was only a matter of time before a local interest sold out. San Diego is a market with a stellar reputation for the manufacture of artisan ales and lagers, as well as a population that consumes a great deal of craft beer. There was much to be gained by purchasing a willing San Diego craft brewery, including an instant foothold in the local and national industry. Many are the drinkers who don’t know or don’t care who owns or controls a brewery, providing the opportunity for MillerCoors to build off of the Saint Archer brand and San Diego’s good name immediately.
Of course, it’s within any business’ right to sell to anyone. That’s their prerogative, but that’s not the problem. Big Beer actively pushes legislation meant to hurt the small guys, as we’ve seen in Florida. Big Beer also controls many of the distribution channels in the United States, so expect to see more Saint Archer at the Coors-focused bars.
Many local, long-tenured breweries I’ve spoken to are not happy Big Beer is now in their backyard. Some of them claim they would never sell, most vocally (my employer) Stone Brewing Co., the owners of which have guaranteed that to their employee base on multiple occasions. These are breweries whose beers won the awards and hearts of beer drinkers the world over, laying the foundation for San Diego County’s reputation as an epicenter for craft beer innovation and quality. The same reputation that Saint Archer leveraged to look attractive to MillerCoors. The same reputation MillerCoors hopes to leverage to look attractive to consumers. Many are worried Big Beer’s presence will taint that reputation. Only time will tell in this latest “first” for San Diego’s brewing industry.
A press release with additional information is below.
SAN DIEGO and CHICAGO – Tenth and Blake, the craft and import division of MillerCoors, announced today an agreement to acquire a majority interest in Saint Archer Brewing Company.
Founded in San Diego in 2013 by a talented group of entrepreneurs, artists, skateboarders and surfers, Saint Archer brews an award-winning range of ales including Blonde Ale, IPA, White Ale and Pale Ale. Saint Archer expects to sell 35,000 barrels of beer in 2015, up more than 100 percent over 2014, making it one of the fastest-growing breweries in California. Tenth and Blake plans to support its continued growth under the ongoing leadership of Josh Landan, Saint Archer co-founder and president.
“We have always wanted to get great beer into more people’s hands,” said Landan. “We were fortunate that brewers big and small were interested in partnering with us, but Tenth and Blake was the clear choice. Tenth and Blake shares our passion for putting great beer first. Joining Tenth and Blake allows us to keep doing what we love right here in San Diego, but now with more resources to innovate and grow. With Tenth and Blake’s help, we hope to one day be a national brand.”
Saint Archer’s management and their team will continue to brew, package, ship, and sell Saint Archer’s outstanding portfolio of high-quality brands. Saint Archer will be run as a separate business unit of Tenth and Blake.
“We’re really excited about our partnership with Saint Archer,” said Scott Whitley, president and CEO of Tenth and Blake. “Saint Archer is consistent with our strategy of building our high-end portfolio while driving topline growth. Josh and his team represent everything we look for in a partner. Saint Archer brews award-winning ales across a variety of styles that are complementary to our current portfolio—including some outstanding IPAs. We’re excited at the prospect of working together to support the continued success of Saint Archer.”
Saint Archer picked up two gold medals at the 2014 San Diego International Beer Festival and a gold medal at the 2014 Great American Beer Festival.
Saint Archer joins other leading crafts in the Tenth and Blake portfolio, including Blue Moon Brewing Company, Jacob Leinenkugel Brewing Company, Crispin Cider Company and a minority equity stake in Terrapin Beer Company.
The transaction is expected to complete in October 2015. The terms of the transaction were not disclosed.
About Saint Archer Brewing Company:
Saint Archer Brewing Company was founded on a unique strain of creative talent: World-class brewers, Artists and Musicians, Surfers, Skateboarders and Snowboarders; all coming together with passion and commitment to express our collective true love – handcrafted beer. Saint Archer has been a long time in the tank and we hope you taste our appreciation and gratitude in every sip.www.saintarcherbrewery.com
About Tenth and Blake Beer Company:
Tenth and Blake is the craft and import division of MillerCoors. The Tenth and Blake family includes Blue Moon Brewing Co. at the SandLot in Denver, Jacob Leinenkugel Brewing Co. in Chippewa Falls, Wis., 10th Street Brewery in Milwaukee, Crispin Cider Company in Colfax, Calif., AC Golden in Golden, Colorado, Birra Peroni in Rome, Plzeňský Prazdroj (Pilsner Urquell) in Pilsen, Czech Republic, and a minority equity stake in Terrapin Beer Co. Tenth and Blake beers and ciders include Blue Moon Belgian White, Leinenkugel’s Summer Shandy, Crispin Original, Peroni Nastro Azzurro, Pilsner Urquell, George Killian’s Irish Red, Colorado Native and Grolsch. You can find out more at www.Facebook.com/TenthAndBlake.
Ken says
If this merger between ABI and SABMiller goes through, and DOJ conditions approval on divestiture of some of the American brands, then … who’s going to own Goose Island? Who’s going to own St. Archer? Will that deal even close?? Oh, here are the vagueries of life for employees and customers when the “boss” sells out to the Big Beer Ogres (BBO)!
Sean says
I was thinking the same thing. Would it constitute an monopoly?
Sean says
Beerlocal, Mission isn’t selling to anyone at the moment. The Root Beer is a success, yes, but if you just check your local grocery store, “big beer” already has two Hard Root Beers; Not Your Fathers and Coney Island (Boston Beer Co).
Ken says
Agree wholeheartedly. In my posts yesterday on Twitter and on Facebook’s xoxoHomegrown page, I gave some credit to Tony Magee for at least explaining carefully how he was using the Heineken partnership for international distribution AND for keeping control of his Lagunitas. But like you, I thought St.Archer was made to sell from the get-go. I called it “build-and-bail.”
The legislative $$’s are of course where the rubber meets the road. We can only vote with out throats, so to speak. I for one will not be drinking any more St. A….e
Just another Brewer says
The real story is how little they pay their employees. You should ask them what their brewers get paid. I have heard some very sad stories from a few former employees that have left making less than 30k a year….
Jay says
I’m not that familiar with the politics of the San Diego brewing scene but I did hear about how St. Archers let Ray A go as brewmaster and heard it was nasty. The scene has always seemed pretty friendly overall so I wonder how this sellout will affect things. Hopefully it won’t become the Silicon Valley of beer. Never thought St. A’s line was particularly special so at least it wasn’t one of the better ones (don’t do it Alesmith).
Jeremy says
Private ownership is a sacred tradition in America as is making money from your creation or labor. I can not fault the owners for all their hard work in starting a new business employing many people and creating wealth where there was none. Congratulations on your effort! Now please don’t rest on your laurels begin again and create another.
Mike says
At some point, the almighty dollar can’t be EVERYTHING.
As has been pointed out, these guys are going to “partner” with an organization that actively pushes for legislation and the continuation of rules that make it hard for small breweries to even exist.
In most states, you can’t even get your beer into a retailer of any kind without going through a distributor. And guess who owns and/or controls all of those?
Jeff says
Pardon my semantic argument, but are they going to operate independently or will they work together? Seems like a pretty big contradiction.
beerlocal says
Countdown begins for Mission to sell out. I’m sure Big Beer would love to have “hard root beer” in their sales arsenal.
Sean says
Beerlocal, see my comment above. Mission isn’t going anywhere. The big macro guys already have a hard root beer in their portfolios.
Mike says
Far be it for me to want to begrudge a “boy makes good story”, even for a beer that IMO rates an “OK’ in our local scene.
But as the author points out, it’s slightly more complicated than that.
“Big Beer actively pushes legislation meant to hurt the small guys, as we’ve seen in Florida. Big Beer also controls many of the distribution channels in the United States, so expect to see more Saint Archer at the Coors-focused bars”
In CA, we do not have the mandatory 3-Tier system like most places, though there is a lot of power from the distribution leaders - all of which are practically run by the big breweries.
Where the system is in place, it’s virtually impossible for smaller guys to do shit.
Here, a brewery can wheel a keg into a bar and sell it to the owner - that is illegal just about anywhere else.
I guess the big breweries, aside from making beer that tastes like shit made with cheap ingredients are too big to fail..