Craft Beer Professionals On The Closure Of Anchor Brewing

On July 12 word spread that one of America’s original craft breweries, Anchor Brewing, which is now owned by Japanese beer giant, was closing.

It was sobering news for us at American Craft Beer and we reached out to many of our peers who work in and around the beer industry to get their thoughts on Anchor’s end and what it might say about the current state of the beer industry.

Kevin McGee – President & CEO Anderson Valley Brewing Company (Boonville, CA)

“Anchor’s closing is an avoidable tragedy. Sapporo had ample time before COVID to have done a lot of positive things at Anchor and didn’t take the opportunity. Instead the ownership tried to re-engineer the facility to do something that it wasn’t designed to do and when that became difficult they basically gave up and in the process alienated one of the most dedicated brewery workforces in all of beer.”

“Anchor was, and still is, a giant and a formative part of not just craft beer but alcoholic beverages. The aggressive outpouring of support and rush to go buy the last of the Anchor beers available are a clear indication of the near-unique level of brand affection and consumer goodwill that was available to Sapporo throughout their stewardship that they missed out on. Instead, an important legacy brewery and its employees have essentially been discarded and it’s not clear at this point what shape the business is in for anyone who might be interested in buying it to try and turn it around.”

“It’s difficult to extrapolate a lesson from Sapporo liquidating Anchor to the rest of the craft beer industry. This isn’t a story of SF being a difficult business environment or COVID taking down a craft beer business – while COVID certainly didn’t make things easier the leadership at Anchor set all this in motion before 2019 for reasons independent of those talking points. If there’s a lesson here it comes as a cautionary example of the risks of acquisitions where the buyer doesn’t understand or respect the intangibles of the business and the risks of an incredibly consolidating industry to the staff and communities that rely on those component businesses.”

Bart Watson – PhD, Chief Economist Brewers Association (Boulder, CO)

“Anchor’s contribution’s to craft brewing and American beer history cannot be overstated. While the longevity of the brand is a testament to its innovation, the craft brewing market has radically grown and shifted over recent decades, with that change only accelerating in recent years.”

“A competitive distribution market and rising costs mean that even strong brands may be struggling to find growth in a slow growth environment that now includes nearly 10,000 breweries nationwide. Anchor’s announcement partially reflects this new maturing era for craft, and should be taken in the context of the large and competitive market that Anchor helped create.”

 

Garrett Marrero – Co-Founder Maui Brewing (Kihei, Hawaii)

“Anchor Brewing was caught between a rock and a hard place and its closure says less about the current state of the beer industry and more about the city it was based in.”

“The cost of running a brewery in San Francisco is demanding. The city is not that friendly to business to begin with and labor costs are high.”

“Anchor was based in an aging facility and so there were costs associated with that. And unfortunately Anchor Brewing is seen as an iconic San Francisco brand so contact brewing its beers in a cheaper part of California, or even out of state, was a move that wouldn’t fly.”

“At our end Maui Brewing and Modern Times Beer are both blessed to be growing in a more difficult business environment, and we’re thankful for that.”

Mark O. Stutrud – Founder and President Summit Brewing Company (Saint Paul, MN)

“The last time I visited Anchor Brewing was in 2016.  It had been several years since my last visit. As my wife and I finished our beer on the roof top deck, I was surprised by the amount of construction going on in the neighborhood.”

“I was told that within a block or two, new condominiums were being sold for $1,500 per square foot.”  Furthermore, I was told that some of these new neighbors were complaining about noise, odors and truck traffic from the brewery.”

“It’s my thought that Sapporo realized that the value of the real estate greatly surpassed the value of the brewery building and equipment.’

Chad Brodsky – Founder & CEO City Brew Tours.  (Greater Boston)

“As a brewery tour operator, I perceive the closure of Anchor Steam from two perspectives. Firstly, the craft beer market has increasingly become crowded, necessitating brands to differentiate themselves further. I also hold concerns about a contraction within the craft beer trend, which leads me to anticipate more brewery closures, such as Guinness in Baltimore.”

“Secondly, the American palate has undergone a shift, spurred on by the pandemic. Similar to the effects of prohibition, the pandemic has driven the average craft beer drinker toward the extremes of the beer spectrum. During our tours, we have observed that typical craft beer enthusiasts now seek well-crafted pilsners and hazy IPAs. Ambers no longer hold the same appeal they once did.”

“Furthermore, Anchor Steam was relatively slow to adapt to these changing times. For instance, they only introduced their flagship beer in cans in mid-2020, indicating a certain reluctance to embrace modern packaging methods.”

 

Leland Rogan – Co-Owner/Operational Manager, Crooked Run Fermentation (Sterling, VA)

“Anchor’s closure speaks to a changing craft beer environment.”

“Much like every other brewery and restaurant we are still pivoting to adjust to meet the changes wants/needs of our customers. It seems like a never ending process since early 2020. Not complaining, we have been adjusting our business since we opened in 2013, just expected to have a bit more permanence. But again I bet so did Anchor and we see what is happening.”

Jake Endres – Co-Owner/Production Manager, Crooked Run Fermentation

“I’ll echo what Lee said, and just add that we’ve only managed to succeed as a small brewery by continuing to put in work and be extremely nimble”

“One problem breweries are facing is that there is so much good beer out there.  Breweries have continued to improve, and knowledge has been so disseminated that there are hundreds of breweries making incredibly good styles that only a few knew how to make a decade or less ago.  It’s great for customers, but it’s very hard to stand out as a brewery these days”

David Oksenhorn – Director, Marcum, Tax & Business Services (San Jose, CA)

“The craft beer industry continues to see the consolidation of brewery brands, but the closure of Anchor Brewing is just another example that it doesn’t always work.”

Unlike some other brewery acquisitions, Anchor was a larger, well-established, and historic brewery but similar to smaller brewery acquisitions in that the unique brand was where much of its value was found.”

“Once the core brand was compromised, its unfortunate demise seemed inevitable. To survive in such a saturated industry, beer brands must be unique yet consistent for both marketing and beer styles or risk losing loyal customers they have built over time, not to mention being unable to expand their customer base further.”

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