Pioneering Anchor Brewing Co. to halt operations after 127 years with beer sales in decline

Ana Echenique, a customer looking to buy beer, looks into the door at the Anchor Brewing Co. in San Francisco, Wednesday, July 12, 2023. (Jeff Chiu/AP Photo)

SAN FRANCISCO — San Francisco's 127-year-old Anchor Brewing Co. will shut down and liquidate after years of declining sales, citing tough economic conditions.

Anchor was a trailblazer in the U.S., brewing craft beers in the 1970s when most Americans were loyal to a handful of major brands. Its unique brewing techniques ignited demand beyond the city borders of San Francisco, and it quickly became a sought-after prize by beer geeks everywhere.

In recent years, however, brewers have faced increasing difficulty turning a profit with a proliferation of canned cocktails, crafted drinks, spirits and wines dinging beer sales. Lockdowns during the COVID-19 pandemic pressured brewers further.

Last year, overall beer sales volume slid 3.1 per cent in the U.S., according to the Brewers Association. Craft brewer sales volume ticked 0.1% higher during the period, but imports are rising.

"We recognize the importance and historic significance of Anchor to San Francisco and to the craft brewing industry, but the impacts of the pandemic, inflation, especially in San Francisco, and a highly competitive market left the company with no option but to make this sad decision to cease operations," brewery spokesperson Sam Singer said in a written statement Wednesday.

Anchor Brewing had teetered near insolvency before and in the 1960s it was acquired by a Stanford University grad, Fritz Maytag. Maytag implemented new brewing practices such as dry hopping, and began bottling the beer in 1971, according to the brewer.

By the mid-1970s, Anchor Brewing had assembled a solid portfolio of respected brews -- including Anchor Porter, Liberty Ale, Old Foghorn Barleywine Ale and its first annual Christmas Ale, which became a holiday tradition in locales far from San Francisco.

Jeff Alworth, author of The Beer Bible, said in a blog post Wednesday that Maytag "sparked a revival in small-scale brewing" that would transform the industry and give the emerging craft brewing industry its ethos and attitude.

"He had this approach to beer, which was, `We're going to use traditional ingredients and we're going to use traditional methods and we're going to be defiant as we do it and we're going to be hyper-local,"' Alworth said. "It served as a blueprint."

Anchor Brewing was sold to the Japanese brewer Sapporo in 2017 and it's decided to discontinue the brand.

Anchor said that it made repeated efforts over the past year to find buyers for the brewery and its brands, but that it was unable to find one. It is still possible that a buyer will come forward as part of the liquidation process, the company said.

"Unfortunately, nothing lasts forever, but I still have hope that they can get rescued by somebody," said Ana Echenique, who was first introduced to Anchor Steam beer when she moved to San Francisco in 2011. Enchenique became such a fan that she would buy it whenever she saw it in stores in other cities.

The news of the brewery closing came as a shock to San Francisco native Frances Baxter, who said Anchor Steam beer is classic San Francisco just like sourdough bread.

"It's just really sad because it's over 100 years of history and it's something so uniquely San Francisco," Baxter said. "We lost so many sourdough bakeries … it's a shame to lose this, too, because I'm not sure anyone is going to save it now."

Baxter went to Anchor on Wednesday to buy Christmas Ale for a brother who lives in Pennsylvania, but the brewery was closed for the day. She said another brother would try to buy the beer for him Thursday because she will be working.

"A lot of these companies just buy something and dispose of it, and that's apparently what Sapporo is doing. It's just a shame," Baxter said.

Anchor recently announced that it would limit sales of its beers to California and that it would cut production of its Anchor Christmas Ale in an effort to cut costs.

The company has stopped brewing and will continue packaging and distributing the beer on hand while available through around the end of the month.

The brewer is giving employees a 60-day notice and plans to provide transition support and separation packages.

"Anchor has invested great passion and significant resources into the company," Singer said. "Unfortunately, today's economic pressures have made the business no longer sustainable, and we had to make the heartbreaking decision to cease operations."

Anchor Public Taps will remain open to sell what inventory remains, including a small batch of 2023 Anchor Christmas Ale.

The batch was brewed prior to the company's decision to cancel the nationwide release.

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AP reporter Olga Rodriguez contributed from San Francisco.