BUSINESS

MillerCoors swallows Saint Archer in latest craft beer deal

MillerCoors is taking a majority stake in popular San Diego craft brewer Saint Archer Brewing Co., the second time this week a beer giant has cut a deal for a small California brewer.

Saint Archer will join MillerCoors' craft and import division Tenth and Blake, which already owns companies Blue Moon Brewing Co. in Denver and Colfax, Calif.-based Crispin Cider Co.

The two-year-old craft brewer is known for its ales, including blonde ale, India pale ale and white ale. Saint Archer expects to sell 35,000 barrels of beer in 2015, more than double last year's total, making it one of the fastest-growing breweries in California, according to MillerCoors.

“Saint Archer brews award-winning ales across a variety of styles that are complementary to our current portfolio—including some outstanding IPAs," Scott Whitley, chief executive of Tenth and Blake, said in a statement.

The deal is expected to be completed in October. Financial details were not disclosed.

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MillerCoors' interest in Saint Archer is just the latest example of a mainstream brewing company trying to capture a piece of the craft beer market. Earlier this week, Heineken said it would take a 50% stake in Petaluma, Calif., craft brewer Lagunitas Brewing Co.

Craft beer continues to outperform the overall U.S. beer market, and now represents 11% of total volume.

In 2014, the number of craft breweries in the nation increased to 3,418, a 19.4% increase from the year before, according to the Brewers Assn., a trade group.

California alone has nearly 600 craft breweries, many of them in San Diego County, according to the California Craft Brewers Assn. The Golden State produces more craft beer than any other state -- about 3.5 million barrels of beer last year.

Partnerships with larger companies can have their perks. Co-founder Josh Landan said the deal will give the company more resources to grow. MillerCoors said Saint Archer will keep its management team, and will run as a separate business unit of Tenth and Blake.

"With Tenth and Blake’s help, we hope to one day be a national brand,” Landan said in a statement.

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But part of the appeal of craft beer is the story behind it -- details about how it's made and by whom, said Tom McCormick, executive director of the California Craft Brewers Assn. That unique story can be lost when smaller craft breweries are acquired by beer behemoths.

While many in the craft brewing industry are rooting for the Lagunitas-Heineken partnership, which they see as a prudent opportunity to take an already strong-performing craft beer to global markets, there is more disappointment with the Saint Archer-MillerCoors deal, McCormick said.

“It’s pretty obvious that MillerCoors will assume control of the brand," he said. "At some point, they will probably start brewing Saint Archer beer in their large breweries. I see the Saint Archer deal as they sold their company to MillerCoors. Lagunitas, that was much more of a partnership."

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