MillerCoors buys craft brewer Saint Archer
It probably just suited them fine that with all the hullabaloo over the Heineken-Lagunitas combination, SABMiller’s announcement on 10 September 2015 that they are purchasing a majority stake in Californian craft brewer Saint Archer from San Diego received far less attention than it otherwise would have got.
According to local media, rumours had been flying around for weeks that the company was being acquired by the Big Brewer MillerCoors, the U.S. joint venture between SABMiller and Molson Coors. Of course, when the transaction was announced, there was no mention of the money which changed hands but local pundits claim it was in the region of USD 75 million. If true, and considering that the Saint Archer brewery was only founded in 2013 and sells an estimated 40,000 hl beer, this is not bad for two years of work.
Saint Archer’s quick ascent and speedier exit comes down to its clever business model. It included bringing in athletes (pro surfers, skaters, snowboarders and associated cool-sport icons) as business partners, making good beer, then have those 20 or so partners promote it through social media and show up for parties. That’s how Saint Archer became a cultural phenomenon, according to locals. And now it’s paid off, big time.
The takeover of Saint Archer by MillerCoors is the latest deal in the mainstreaming of America’s craft beer industry, whose brewers have traditionally identified themselves as independent alternatives to the global Big Brewers.
With AB-InBev owning the craft brewers Goose Island, Blue Point, 10 Barrel, and Elysian, and Heineken wooing Lagunitas, MillerCoors had to take action or they would have missed out on tapping into the rising consumer interest in the craft category, which generated USD 19.6 billion in retail sales last year. Market share for the sector has more than doubled from 5 percent in 2010 to 11 percent in 2014, according to the Brewers Association, as growth for the world’s largest brewers has slowed in the massive USD 100 billion U.S. beer market.
For the time being, Saint Archer’s co-founder Josh Landan, a filmmaker, will stay on with the company, which will be run as a separate business unit of Tenth and Blake, MillerCoors’ craft division. Saint Archer has no distribution outside California, which will allow MillerCoors to spread it across its network of distributors nationwide.
Like Lagunitas, Saint Archer will be deleted from the BA’s list of U.S. craft brewers because of the change in ownership. But it’s up to the craft beer brain trust whether the change in ownership actually entails Saint Archer losing its cool status with California’s beach crowd.
