Thirty years ago, my high-school friends and I snagged IDs that exaggerated our ages to get into 21-and-over music shows. OK, mostly we did it so we could buy beer — and that we did, as cheaply as possible. We even gulped down cases of generic beer, which had entered our realm of high-school cool because it had a cameo in the cult Cali-alien-apocalypse-punk indie film Repo Man.
But even then, in the pre-foodie, pre-craft culinary desert of 1980s America, we knew we had to use our IDs for a higher purpose: touring the Anchor Brewing Co., which was free. (That was a big selling point for us, too.)
Even we, louts that we were, had become aware that Anchor meant good taste. That meant it was time to put on our thrift-store, hand-me-down wool blazers (because discriminating beer drinkers looked sharp!) and book a tour. The outing was topped off with a few rounds with the white-coated brew master in the tasting room. I still remember the containers of dried barley and other ingredients offered up, like bar snacks, to put some of the tastes in context. Back then, the menu was limited to the flagship Steam, Liberty Ale, and a few others — not like today.
Late last week, the news was the 121-year-old Anchor is to be acquired by Japan’s Sapporo for $85 million, a sliver of a price tag compared with some recent deals for other California craft brewers. The price tag is modest for a few reasons, especially this one: If my teenage self and friends were around today and wanted to illegally visit a brewery, Anchor probably wouldn’t be at the top of the list. “It’s your dad’s dad’s beer,” says Chris Furnani, editor of craft-beer trade publication Brewbound. “A lot of consumers are now looking for something they haven’t tried or seen before. [Anchor isn’t] in the realm of what a lot of people want to bring to a party.”
A generation ago, before craft-brew consciousness had bubbled into daily life, Anchor was a source of civic pride and a better-tasting beer than what the vast majority of America was drinking at the time. Compared with the fizzy piss-waters of Bud, Coors, and Miller, the full-flavored Anchor Steam was positively radical. Finding it outside of San Francisco was even more a treat and carried a cachet of place, with its nautical theme and historical pedigree.
A generation ago, Anchor was a source of civic pride and a better-tasting beer than what the vast majority of America was drinking at the time.
It also stayed independent far longer than most of its much younger peers that built national brands on top of strong regional foundations, like San Diego’s Ballast Point, Sonoma County’s Lagunitas, and Chicago’s Goose Island.
The past several weeks have become a watershed for the San Francisco beer business. A trio of brewers from a generation much younger than Anchor, all of whom accelerated the city’s taste for good local beer, have needed outside help. Speakeasy Ales & Lagers, already bankrupt, has been kept alive by a former distributor. New York’s Brooklyn Brewery has taken a minority stake in 21st Amendment, which began up the street from the Giants’ South of Market ballpark, then took on a load of debt to expand operations to the East Bay. What’s more, as I write this, Magnolia Brewing Co., also in financial distress, has been snapped up for peanuts by New Belgium Brewing Co. (think Fat Tire) and other partners. Speakeasy and Magnolia were founded in 1997, 21st Amendment in 2000.
Back to Anchor: The brewery came late to the IPA craze, which might or might not have hurt them. Other IPA-less breweries have done well, according to Bart Watson, chief economist of the Brewers Association, the country’s top craft-beer trade group. But: “If you don’t have a strong IPA, you really need to execute with your other brands.”
Sapporo cited Anchor’s sales of $33 million in 2016 as a way to speed up its own U.S. growth. But Anchor has hit the odd plateau of being both bigger — 22nd on the Brewers Association’s most recent list of top 50 U.S. craft breweries — yet not big enough among the more than 5,000 craft breweries across the country. (It sold 130,000 barrels of beer last year; by comparison, top craft brewer D.G. Yuengling & Son rolled out 2.6 million.)
The “buy local” advantage was once squarely in Anchor’s favor. Yet it’s now sold in all 50 states. In a low-margin business like beer, selling beyond one’s home turf means more sales and marketing people, longer distribution chains, and making less money on the product itself, Furnani says. In a Brewbound interview, Anchor CEO Keith Greggor was unusually blunt for a guy who’d just sold his business, saying Anchor’s spirits division, which he and his partners are keeping, brings in 30 percent more sales and was subsidizing the beer side for some time. “There’s no fast win with Anchor,” Greggor said, citing a recent sales decline.
Despite his promise of selling to an owner that pledged to respect Anchor’s unique history, there’s no guarantee Sapporo won’t turn the brewery’s prime base-of-Potrero Hill location into condos. (Anchor’s waterfront expansion plans, as part of a San Francisco Giants-led development, were in trouble some months ago and seem to have gone completely flat with the Sapporo acquisition.)
As with other markets, “the cumulative effect of hundreds of small brewery competitors” has likely had an effect on Anchor in its hometown, says Watson. “Add in a metro area that also drinks a lot of wine and spirits, and you’re looking at a really competitive place to be.”
If my teenage self, transported 30 years into the future with a fake ID, had a small window of time to taste the current craft-beer high life, would I still take the Anchor tour? If it were still free it would be tempting, even in the face of the countless microbrew options across the city. But now that Anchor charges $25, that money would probably be more creatively spent elsewhere.
Alex Lash is the editor in chief of The Frisc.
