Amid Breach of Contract Lawsuit, Coronado Moves to Offload Monkey Paw

Less than one year after Coronado Brewing acquired a majority stake in nearby Monkey Paw Brewing, the San Diego-based regional craft beer producer today put the smaller outfit up for sale.

The decision to sell its interest in the business comes about one month after Monkey Paw founder Scot Blair — an outspoken figure in the San Diego craft beer scene who also owns the popular Hamilton’s Tavern and South Park Brewing Company ventures — filed a lawsuit against Monkey Paw for breach of contract.

Blair, who is still a minority stakeholder in the Monkey Paw business, officially vacated his role as an “advisor” in January, Coronado CEO Brandon Richards told Brewbound.

In the suit, filed in the California Superior Court of San Diego County and obtained by Brewbound, Blair alleges that Monkey Paw owes him $33,534, plus interest, as part of an unsecured promissory note that was dated September 1, 2017.

According to the lawsuit, Blair has not received any payments, which were to be made in monthly disbursements of $1,005.04 beginning on October 1, 2017.

Speaking to Brewbound, Richards said the decision to put Monkey Paw on the market did not stem from the pending litigation, but rather was aimed at refocusing attention on growing the core Coronado business.

“The effort that it was taking to put into the brand was really becoming a distraction for Coronado Brewing,” he said. “We’re talking about a 40,000-barrel brewery and a 600-barrel brewery, and we have to make sure we’re watching out for our main business.”

In a press release, Coronado also cited a “rapidly evolving craft beer landscape” as a key driver of the decision to put Monkey Paw’s brand and assets up for sale.

“It’s been really difficult to bring the brand to life,” Richards told Brewbound, adding that Coronado’s distribution business is down 4 percent year-to-date amid competition from more than 150 local breweries.

“It is just not something we want to resource, financially, at this point,” he added.

Potential buyers have not been identified, and the company had not immediately fielded interest in purchasing the brand, Richards told Brewbound.

Coronado is exploring whether to sell Monkey Paw’s brand and equipment assets together or separate, he added.

“There might be a need for the pub, by someone else, but not necessarily the brand,” Richards said.

Coronado owned a majority of the Monkey Paw business for just nine months before deciding to exit its investment. During that time, Coronado helped to refresh Monkey Paw’s branding, and its east village pub, while simultaneously rolling out cans of its Lab Monkey IPA to retailers, a press release noted.

At the time of last year’s acquisition announcement, Richards believed Coronado could potentially scale Monkey Paw’s business to 4,000 barrels in 2018.

Though Coronado’s pub and tasting room business is “up slightly,” Richards said the brand’s on- and off-premise sales are down 3 percent in San Diego.

“We just want to make sure we are not losing money and putting additional effort into things that aren’t creating profit for the company,” he added.

A press release with additional details is below.

Coronado Brewing Announces Strategic Changes in Shifting Craft Market

SAN DIEGO – May 29, 2018 – In a rapidly evolving craft beer landscape, Coronado Brewing Company is announcing plans to sell the Monkey Paw Brewing brand. The move comes at a time of turbulence in the industry, and allows Coronado to refocus on its core business objectives. “While we were excited about the potential of Monkey Paw, the decision to sell came from the need to refocus our energy toward Coronado Brewing” says Brandon Richards, CEO, Coronado Brewing Company. “We’re confident that the award-winning Monkey Paw brewery has brand equity that can be of value to someone looking to enter the craft industry.”

Coronado Brewing acquired the Monkey Paw brand in 2017 and worked to refresh the overall aesthetics, including an overhaul of its East Village pub, as well as introducing new Lab Monkey IPA cans at retail. The sale of the Monkey Paw brand allows Coronado to focus its financial and human resources on growing the Coronado brand. The company will continue to operate the Monkey Paw pub in downtown San Diego while offers are entertained.

“This decision allows us to refocus on all the exciting plans that we have for Coronado,” says Richards. The company just released the second installment of its successful art series collaboration with Kelcey “KFish” Fisher, and its seasonal release, Peach Cruiser IPA, is selling out at retail locations across the state.

“We’ve been on a roll with our recent beer releases—we’re giving people the styles they want with designs that are pushing our boundaries,” says Richards. In addition to the recent launches, the company has plans to roll out a new lineup of 16oz can offerings in the fall, and more barrel-aged and sour offerings in 2019. The company is also investing in its main production facility and tasting room in Bay Park, with a new outdoor beer garden slated to open in time for the company’s 22nd Anniversary celebration on July 28, 2018.

For more information about the company’s beers and locations, visit www.coronadobrewing.com.

Stay Coastal. Cheers.

About Coronado Brewing Company

In 1996, when craft beer was still a foreign term and San Diego County was home to only a handful of breweries, the Chapman brothers Ron and Rick opened a brewpub in their hometown of Coronado. Today CBC stays true to their San Diego roots, brewing abundantly hoppy West Coast-style ales, which are available today in 14 US states and 12 countries. In addition to the long-established pub in Coronado, the company opened a tasting room inside its San Diego production facility in 2013, and a tasting room and restaurant in Imperial Beach, California in 2014. Coronado Brewing Company was honored in 2014 with one of the brewing industry’s most prestigious awards—World Beer Cup Champion Brewery and Brewmaster for a Mid-Size Brewing Company.

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