After 127 Years, America's Oldest Craft Brewery Is Closing
In an announcement issued the morning of Wednesday, July 12, 2023, San Francisco's Anchor Brewing announced that the brewery would be ceasing operations and closing its doors for good. The company's 61 employees were given a legally mandated 60-day notice and are expected to receive "transition support and separation packages." Although production has stopped, the remaining beer the brewery has made and has on hand will be sold through the remainder of July.
The release cites the economy and the cost of doing business in San Francisco as the main culprit, but the brewery has been in economic trouble since 2016. The brewery sold to Sapporo, a Japanese beer brand, in 2017 as a result.
In an email to retailers, Mike Minami — the president of Sapporo USA — noted that the brewery's "unique steam brewing technique is costly." Inflation increased production costs further, compounding what seemed to be an already tipsy business model. Minami also notes that its main source of revenue has long been bar and restaurant sales rather than off-license distribution, and the pandemic all but eliminated that revenue for two years. Minami says the company made repeated efforts to find buyers but couldn't. Per the company press release, rather than filing for a Chapter 7 (liquidation) or 11 (reorganization) bankruptcy, which would be court-monitored, Anchor is in the process of negotiating an arrangement under the California Assignment for the Benefit of Creditors. The entire business, including the brewery, will be liquidated to pay off creditors.
Trouble has been brewing for craft beer
In June, the brewery announced it would be cutting all distribution outside California and ceasing production of its fan-favorite winter Christmas Ale. At the time, Anchor Brewing employees raised concerns to VinePair, saying that Sapporo didn't understand craft beer in the U.S. and blaming it for mismanaging the company, making "rookie mistakes left and right." Workers unionized in 2019. The union released a statement via Twitter today about the brewery closure, saying the move is "the tragic consequence of a multi-billion dollar, transnational corporation, headquartered across the Pacific Ocean, taking over a local institution and failing to understand how to market, sell, and distribute a great product that has been loved for generations."
In 2022, CNN reported that the year would likely be a "make-or-break" year for struggling craft brewers. The lingering effects of the pandemic, the war in Ukraine leading to disruptions in wheat and barley supply, scarcity of aluminum for cans, and climbing cost of production, operation, and distribution were all cited. Though there was an industry-wide bump in 2021, which Anchor also benefited from, and craft beer's share of the beer market grew by 13.2% in 2022, the overall beer market shrank 3% last year. 319 breweries closed in 2022, outpacing 2019 as the record year for brewery closures. With Anchor's closing in 2023, 127 years after it began fermenting the craft brewing scene in the U.S., it calls to question what the future of the craft beer business will look like.