Kings & Convicts to Acquire Saint Archer Brewing Facility; Molson Coors Discontinues Craft Beer Brand

The San Diego craft brewery scene is once again getting shaken up by the Kings & Convicts.

After acquiring the Ballast Point brand from Constellation Brands in 2019, the company is acquiring the brewing facilities and taprooms of Saint Archer from Molson Coors.

Financial terms of the transaction were not disclosed, but the deal is expected to close within the next two weeks.

Molson Coors announced the deal today on its blog, noting that the Saint Archer brand would cease production and distribution, effective immediately.

“The Saint Archer team has built a distinct brand that has a very loyal following in Southern California. Unfortunately, the overall business has struggled to grow despite investing significant resources behind its production and commercialization,” Paul Verdu, VP of Tenth and Blake, Molson Coors craft division, said in a press release. “We’ll maintain ownership of the Saint Archer brand as we determine the best long-term plan and remain focused on growing our regional breweries that continue outpacing home-market competitors.”

In the blog post, Verdu added that the company “tried to do everything we could to keep the brand going, but it just wasn’t financially viable to continue operating.”

Enter Kings & Convicts, which will acquire the 50,000 sq. ft. brewery with its 40-barrel brewhouse, 5-barrel pilot system, cellar, canning line and a 1,200 sq. ft. satellite taproom in Leucadia. The company plans to take on Saint Archer’s operations and tasting room employees.

With 1 million barrels of beer brewing capacity at its Ballast Point facility, why does Kings & Convicts need another San Diego brewery?

CEO Brendan Watters explained that the company wanted a headquarters for Kings & Convicts, where its beer will be produced, as well as small batch Ballast Point offerings and other craft beverage products. He added that the Ballast Point facility with its 300-barrel brewhouse was “too bloody big” for Kings & Convicts, and the Saint Archer facility made more sense.

Additionally, Watters said Saint Archer’s packaging line was a major upgrade over Ballast Point’s existing line, giving the company back capabilities it lost when it sold the Scripps Ranch facility to hard kombucha maker JuneShine. Ballast Point’s off-premise packaging mix is now 100% cans.

With the soon-to-be former Saint Archer facility, Kings & Convicts will scrap its planned facility in Pleasant Prairie, Wisconsin. The Kings & Convicts brand is only sold in select markets in Illinois and California, where it is self-distributed.

Watters added that the acquisition of the facility is about creating capabilities and flexibility within a beverage alcohol industry that is in the midst of a convergence.

“For us, it’s much more important to ensure that we grow a profit,” he said. “I don’t care about rankings. I care about what’s sitting in the bank account. And so part of this is really thinking about a profitable, sustainable company with brands that allows us to do stuff and be more nimble, quite frankly, as we start to develop new products, and we come to market with new products.

“So this is about being thoughtful about where does this thing go in the next two to five years. This is this is a step for us to ensure that we’ve got capabilities to nurture brands like Kings & Convicts, plus others as well as look after the big beast that is Ballast Point, but also have the infrastructure and capability to develop other products that are not beer related.”

To reach that goal of profitability, Kings & Convicts leans on its network of Ballast Point taprooms throughout California — three in San Diego, one each in Long Beach and Anaheim and a sixth in the works in San Francisco — that have been hampered by restrictions during the pandemic. The San Francisco taproom was announced in March 2021, the same month in which Kings & Convicts announced the closure of its Ballast Point-branded Chicago taproom.

“If we were open and operating with our taverns and restaurants, we’ll get back to profitability quick start,” he said. “These things are big beasts that throw off good cash in a normal environment.”

Another potential revenue source for the company is contract brewing at its Miramar brewery, which could become easier with the nimbler packaging line from the Saint Archer locations. Currently, Ballast Point has taken on some draft contract opportunities, but will be able to sign on more clients in the future, Watters said.

Asked if the Saint Archer brand was available in talks with Molson Coors, Watters said it was “not something Molson Coors was willing to give up, and it’s not really something we were interested in.”

Nevertheless, there is at least one interested party in Saint Archer’s intellectual property.

Josh Landan, who co-founded Saint Archer in 2013 and sold it to Molson Coors in 2015, said he was “devastated” by the news of the discontinuation of the brand.

“When you put everything I put into Saint Archer — and not just me, but my wife and the employees that started with me, it’s devastating. It’s what everyone tells you that happens and when it happens it’s still shocking.”

Landan added that he “would love nothing more than Saint Archer to be back” under his ownership.

“It should be with me. It’s like it should be here,” he said. “The love for the brand is still there. If an authentic voice was brought in, maybe it could be special again.”

Landan founded Saint Archer in 2013 with a similar playbook to the one he now uses for Ashland Hard Seltzer: a portfolio with strong branding, bolstered by a stable of investors and brand ambassadors that include celebrities and pro athletes. The brewery scaled to 17,000 barrels of beer in its second year of operation.

Molson Coors acquired Saint Archer in 2015, marking the company’s first craft acquisition in California, the country’s largest craft beer market. Under Tenth and Blake, Saint Archer’s volume peaked at 65,000 barrels in 2019.

Saint Archer’s output declined -15%, to 55,000 barrels in 2020, making it the fifth largest brand among Tenth and Blake’s seven craft breweries. Only Texas-based Revolver Brewing and Michigan-based Atwater Brewing, both acquired after Saint Archer, sell less beer.

Molson Coors placed significant investment in Saint Archer Gold, the company’s health-and-wellness challenger to Anheuser-Busch InBev’s Michelob Ultra, in early 2020, promoting it with a Super Bowl ad that featured pro skateboarder Paul Rodriguez skating from store to store in search of the beer while whistling along to Guns N Roses’ “Patience.” But the company was impatient with the new product and announced its hibernation seven months later.

Saint Archer isn’t the only brand Molson Coors has called it quits on recently. In July 2021, the company announced it would cease production of Coors Seltzer, opting instead to focus on its more successful brands in the segment, Vizzy Hard Seltzer and Topo Chico Hard Seltzer.

News of the discontinuation of Saint Archer and the pending sale of its brewing facility follows the sale of the Green Flash and Alpine brands to global cannabis firm Tilray, which also owns Atlanta’s SweetWater Brewing.

Not all of Saint Archer’s employees will not be retained. A spokesperson for Molson Coors said the company is working to provide “a smooth transition” for those employees.

“We will have individual conversations with employees that are not provided offers to discuss severance and transition assistance, which will include outplacement services,” Marty Maloney said.