Will this venerable brewery survive the storm. And an acquisition gets unmergered
Read time < 4 min.
In the grand scheme, craft beer is a pretty new thing. Its history is measured in years and decades, not centuries. There are very few things more than 10 or 15 years old. Nostalgia is rare. Traditions are hard to come by. And then there’s Anchor Chrismas Ale. For the last 48 years, Anchor Brewing produced its Christmas Ale without fail. Nine different people have occupied the Oval Office in that time. Anchor Christmas Ale is older than almost everyone reading this newsletter. So, let’s raise a toast to the passing of our longest-lived craft beer.
Anchors Away. It’s a Sad, Sad Day
Recently, Sapporo Breweries announced that it will cease national distribution of Anchor Brewing’s beers, withdrawing from 49 states and focusing on California, where Anchor sells 70 percent of its beer. Arguably, if not actually, Anchor Brewing in San Francisco was the nation’s very first independent craft brewery. It’s sad news, but perhaps even sadder was the announcement that the company will cease production of Anchor Christmas Ale.
In 1965 Fritz Maytag III used a small portion of the Maytag family’s fortune to purchase a historic, but then-struggling, brewery and transform it into the kind of brewery that we eventually came to know as an independent craft brewery.
In 1975, Anchor introduced Christmas Ale. For the next 48 years, Anchor produced this seasonal ale based on the same recipe but with variations each year.
In 2017, Japanese brewing giant Sapporo acquired Anchor Brewing for a reported $85 million.
Apart from the heartache surrounding the nostalgia of it all, what can we take away from Anchor Brewing’s (Sapporo’s) decision?
Sapporo purchased Anchor Brewing in 2017 and Stone Brewing in 2022 with the intention of increasing production and expanding those breweries' distribution footprints. If not stated directly, that's the way most folks interpreted Saporro's statements at the time. With news of this massive contraction, it seems the company is rethinking its strategy, though this story is about Anchor and not Stone.
Here are some things about which Sapporo executives are probably uneasy. Anchor Brewing’s sales were down 3 percent last year. The brewery’s production levels are already well below capacity, and now it is reducing its distribution to just one state. Anchor’s employees are unionized and the company’s contract with the union is expired. The contract is currently in limbo. How those negotiations proceed will tell us something about Anchor’s future.
We don’t know how this will play out, but it probably won't be smooth sailing for Anchor. We don’t know what kind of reward Big Beer expected from meddling in the realm of craft beer, but if it was unbridled growth and market domination, it’s not happening.
Maybe another Fritz Maytag will show up to purchase Anchor Brewing from Sapporo and once again make it a craft brewery unincumbered by the aspirations of Big Beer. That would complete the circle.
The Un-Acquisition of Flying Fish
A couple of months ago we wrote about the merger of two New Jersey breweries: more directly, we told you about Cape May Brewing’s acquisition of Flying Fish Brewing. Today we share news about the deal falling apart.
Cape May president Frank Stempin told Brewbound, “After extensive analysis during the diligence phase, Cape May Brewing Company has determined it will not complete the planned acquisition of Flying Fish. As a result, all plans associated with the close have halted, and the acquisition will not proceed.”
Flying Fish president Frank Rio told Brewbound that after the deal fell apart a couple of weeks ago, it’s all business as usual. “We're keeping our employees employed and keep brewing beer after 30 years. What the next steps are, we'll see. But for us, we're pressing on.”
This one deal falling apart bucks the trend. Mergers and acquisitions are an inescapable reality in the craft beer biz these days. We’re seeing so many of them lately that it’s difficult to decide which ones to share with you here on The Tray.
Around the Web
It's not all about breweries merging. As we've pointed out previously, these days consolidation is a trend in the world of beer distribution too. For example, this story of acquisition involves two So Cal distributors.
And the merger/acquisition thing isn't just about breweries and beers. Cannabis is getting in on the action. The largest cannabis operator in Texas has acquired Houston's 8th Wonder Brewing. It's not the first time a cannabis company has acquired a brewery, nor will it be the last. We may delve deeper into that in a future issue of The Tray.
In regards to last week's story about the smaller River Horse Brewing taking over the larger DuClaw Brewing, stevejzoo@... said: "There must be more to the story when the smaller enterprise purchases the larger enterprise. Owner desire to grow versus owner desire to step back? Relationship of owners and managers, assuming they are different especially in larger breweries..."
Indeed, there is often more to the story. In this case, the owner’s desire to step back was a factor. We should have provided a link to an article with more details. So here it is.
So how did we do this week?
Select whichever answer best applies. You'll have a chance to leave additional feedback once your vote is recorded.
This week's Taster Tray was composed by Kendall Jones.