Anchor Brewing, the OG of craft beer, to 'liquidate the business' after years of losses

By Tomi Kilgore

The 127-year-old maker of the influential beer Anchor Steam files for a form of bankruptcy amid a prolonged pandemic impact in San Francisco

Anchor Brewing Co., the self-proclaimed first craft brewery in the U.S., said it will "cease operations and liquidate the business," about 127 years after being incorporated.

"This was an extremely difficult decision that Anchor reached only after many months of careful evaluation," said Anchor Brewing Spokesperson Sam Singer.

Anchor, whose beer lineup includes Anchor Steam, Old Foghorn and West Coast IPA, has decided to begin the assignment for the benefit of creditors, or ABC, process, which is a form of bankruptcy. Sapporo Holdings Ltd. , which bought San Francisco--based Anchor in 2017, said Wednesday that it had approved the ABC.

The ABC comes after Anchor was "significantly affected" by the COVID-19 pandemic, with "particularly prolonged" impact in the San Francisco area leading to a significant decrease in sales.

"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," Singer said.

The filing of Anchor's certificate of cancellation is scheduled for July 2024.

Anchor, which was incorporated in March 1896, has stopped brewing, but will continue to package and distribute beer on hand while available to about the end of July. Employees were given 60-days notice, and the brewer has plans to provide separation packages and transition support.

Anchor recorded losses of $9 million on sales of $10 million in 2022, after losses of $9 million on sales of $12 million in 2021 and losses of $12 million on sales of $12 million in 2020, Sapporo said.

Net assets dropped to $3 million in 2022 from $13 million in 2021 and $35 million in 2020.

The Japan-based brewer said it expects to record 2023 losses from Anchor's ABC of 6 billion yen, or about $42.9 million.

"Over the past several years, we implemented a variety of measures to improve the business, such as releasing new products, product renewals, and making brand investments. However, Anchor's business performance continued to be sluggish," according to a translated notice of the ABC provided by Sapporo. "Since it would be difficult to improve profitability in the medium to long term, Anchor decided to commence the ABC."

Sapporo said for the U.S., which it views as a growth driver, it will focus on its Sapporo Premium Beer in collaboration with craft-brewer Stone Brewing Co., which Sapporo acquired in August 2022.

Anchor Brewing, based in San Francisco's largely residential Potrero Hill neighborhood, was rescued from financial failure in 1965 by Frederick Louis Maytag III, of the laundry-appliance and blue-cheese Maytags, and its Anchor Steam went on to become arguably the most influential beer at the outset of the U.S.'s craft-beer boom.

-Tomi Kilgore

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07-12-23 1521ET

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