Coronado Brewing Company today announced it would acquire a majority stake in Monkey Paw Brewing, a small craft brewery located in San Diego’s east village neighborhood.
Specific financial terms of the deal, which is expected to close on September 1, were not disclosed. Coronado will use cash flow from its production brewery and brewpub operations to finance the transaction, chief operating officer Brandon Richards told Brewbound.
“Monkey Paw is local, independent and it has a great following in California,” Richards said when asked what interest Coronado had in the brand.
Scot Blair, an outspoken and popular figure in the San Diego craft beer scene, founded Monkey Paw in 2011. He also owns the popular Hamilton’s Tavern and South Park Brewing Company ventures, which will continue to operate independently.
“Scot is very well known in the brewing industry and having a partner with a mind like his was important to us,” Richards said.
In an interview with the San Diego Union Tribune, Blair described the beer industry as a “strange climate” and said his desire to scale the Monkey Paw brand is what led him to consider a sale.
“From his standpoint, it is a challenging time for a brewery that is only doing 600 barrels,” Richards said of Blair’s motivation to sell the company. “He had a few options – sell completely, get bank financing, or partner with someone locally. Making an additional investment and taking a leap in this current market was concerning to him.”
Indeed, over the year-to-date period ending June 11, off-premise sales of craft beer were down 4.9 percent in Southern California, Richards said, citing data from market research firm IRI Worldwide. Nationally, craft beer trends aren’t much better: Sales at grocery stores were up just 1.4 percent during the same period, according to IRI.
Monkey Paw, which brews on a 10-barrel system, is on pace to produce about 600 barrels of beer in 2017, according to Richards. The much larger Coronado brewery, meanwhile, grew 10 percent last year and produced 39,000 barrels of beer. Richards said he expects sales to increase between 5 and 7 percent in 2017, adding that growth is getting more challenging amidst increased pressure from hundreds of smaller breweries now operating throughout greater San Diego.
“The industry is changing,” he said. “There is an increased focus on local, and rather than going into new markets where we wouldn’t be as well known, we thought it would be better to remain more relevant by bringing on another local partner.”
Richards described the deal as mutually beneficial, highlighting diversification and expansion opportunities for both companies.
“It allows us to become more operationally efficient, faster than we had planned,” he said, adding that Coronado would look to broaden distribution and scale production of Monkey Paw beers to as much as 4,000 barrels in 2018.
Coronado co-founder Rick Chapman added that his company currently has about 20,000 barrels of unused capacity, a factor that contributed to his desire to make a deal.
Coronado also plans to refresh the Monkey Paw branding, a process that will take three to four months, Richards added.
The decision to partner with another local brewery — one in the shadows of the newly built 10 Barrel brewpub, owned by Anheuser-Busch InBev — comes at a time when Coronado is working to expand its own local presence with the purchase of a 15,000 sq. ft. building in Imperial Beach.That space — Coronado’s fourth location and its second in Imperial Beach — will include a 10-barrel brewhouse, a small distillery and a restaurant with seating for more than 300, Chapman told Brewbound in March.
A press release with additional information is included below.
Coronado Brewing Company and Monkey Paw Brewing Join Forces
San Diego, CA – July 18, 2017 – In today’s tumultuous beer climate, two of San Diego’s most respected and award-winning independent craft breweries are joining forces to deliver more beer to thirsty fans. Coronado Brewing Company will acquire a majority share in Monkey Paw Brewing Company. The move allows Monkey Paw to share in Coronado’s resources, further developing the brand, while simultaneously maintaining the independence, integrity, and quality that Monkey Paw has become known for. The acquisition is expected to close September 1, 2017, for an undisclosed amount.
“We are excited to bring Monkey Paw Brewing Company into our family,” says Brandon Richards, COO, Coronado Brewing Company. “We’re looking forward to partnering with Scot Blair and his team; they have built a tremendous brand from the ground up, and their beers are incredibly well-respected. We can’t wait to share their brand with an expanded audience.”
The partnership will enable Monkey Paw to bring more of its beer to fans throughout Coronado’s distribution footprint. The plan is to grow organically, with Coronado working with Monkey Paw to expand draft accounts, refresh its branding, and increase off-premise distribution. “Scot Blair has created a brand with a lot of momentum, and we don’t want to mess with that too much,” says Richards. “The pub will continue to operate as-is, and we’re looking at releasing new cans in the near future.”
Coronado’s move to acquire Monkey Paw comes at a time when many regional breweries are experiencing declining sales. “We have been looking for the opportunity to bring in a brand that fits with our culture, and doing so allows us to realize our operational efficiencies,” says Richards. “It also gives us the opportunity to sell more beer in California, which we love doing. We think this is a powerful extension of our brand and a great way to diversify our offerings.”
For more information about both companies, visit www.coronadobrewing.com and www.monkeypawbrewing.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 16 US states and twelve countries. In addition to the long-established pub in Coronado, the company opened a tasting room inside their newly built San Diego production facility in early 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.
About Monkey Paw Brewing Company
Established in 2011, Monkey Paw Brewing Company is the brainchild of craft beer maven, Scot Blair. Monkey Paw Brewing Company is proudly independent, and one of San Diego’s most award-winning craft breweries. Since its inception, the Paw has brewed a wide variety of medal-winning beers, with its greatest honors coming by way of Gold and Silver at GABF and WBC, respectively. The original maker in Makers Quarter, Monkey Paw Brewing Company operates on a 10-barrel system in East Village, San Diego, and was the first brewery in the county to pioneer canning its beers, back in 2012. So, whether it’s a trip back in time for a traditional old world ale, or jetting into the future with bleeding edge techniques and ingredients, its well-balanced, handcrafted ales and lagers are proof we’re not just monkeying around.