Bud Light is far from the only beer brand with big trouble. Anchor Brewery, purchased in 1965 by washing machine heir Fritz Maytag and turned into a national phenomenon by marketing its distinctive rich, amber suds widely, sparking a national craft beer movement, is calling it quits.

I am so old that I vividly recall the appearance of Anchor Steam Beer and bought many a six pack because it was so obviously better than the pale, somewhat watery American beers that dominated the market. I resented needing to buy imports from Holland, Germany, Mexico, and other lands to get a beer that satisfied. I was actually proud that America was producing such a beer and grateful for its wide availability in the places that I lived: metro Boston and San Francisco.

Anchor products tap handles at a San Francisco pub (YouTube screengrab)

But the more than half a century that followed saw many changes in the beer market that have not been kind to the pioneer. Beer brands have proliferated while overall consumption is stagnant to declining, as the population ages and concerns over obesity and carbohydrate consumption grow. There are now more craft beers available than I can keep track of, and when I buy beer, I often try something new. It’s been many years since I bought any Anchor beer, and it looks like I have plenty of company among former fans.

Anchor was acquired in 2017 by the parent of Japan’s Sapporo Breweries for a reported $85 million, an investment that followed by an even larger craft beer purchase of Stone Brewing in 2022 for a reported $168 million.  Although Sapporo is large, with multi-billion-dollar sales in Japan, the fourth largest beer market in the world, the brand has not been growing there, and now ranks fourth in the industry, down from second place (as I remember from 1967 when I first began living in Japan). And the Japanese beer market is not healthy due to a shrinking population and consequent low numbers of young people coming of age and starting to drink lots of beer.  

Anchor has foundered under Sapporo’s ownership:

In a press release, Anchor Brewing spokesperson Sam Singer said that economic pressures made business "no longer sustainable," and that employees were given their 60-day notice Wednesday. In June, Anchor Brewing limited distribution to California and axed one of its most popular beers.

“The inflationary impact of product costs in San Francisco is one factor,” Singer told SFGATE at the time. “Couple that with a highly competitive craft beer market and a historically costly steam brewing technique. [They’ve] probably been mulling over this decision for a year. It’s not something they take lightly.” (snip)

“This was an extremely difficult decision that Anchor reached only after many months of careful evaluation,” he said in a statement. “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.” 

The 61 employees at the San Francisco brewery were not impressed with Sapporo’s management of its acquisition, according to this year-ago article in Vinepair, an industry-oriented publication:

“Sapporo has made rookie mistakes left and right, they have destroyed what this brand was,” says one current Anchor employee, who requested anonymity to speak with Hop Take due to concerns over possible retaliation from the company. “Upper management ran this company not understanding how craft brewing works in America.” Now, the venerable brand — which has survived two World Wars, a handful of owners and name changes, and innumerable minor calamities since its founding in 1896 — faces a potentially existential threat. And workers past and present say the call is coming from inside the house.

Two and a half years ago, the company dropped its nostalgia-laden labels and went modern, losing whatever sentimental appeal the industry pioneer may have been able to exercise. At the time, it issued the sort of PC promises so common in corporate America:

In looking ahead to the next 125 years, Anchor has also announced new sustainability initiatives. These include completing a water treatment facility that will allow the brewery to recycle industrial use water and reduce its overall water usage. The brand also plans to continue working with Baykeeper, a non-profit focused on preserving the San Francisco Bay, and recently forged a new partnership with the California State Parks Foundation.

But these moves didn’t help and the brand continued to lose money:

Anchor Brewing lost $10 million in 2022 and $22 million in 2021, while sales shrank during the period, according to figures from Sapporo.

Sapporo’s pulling the plug on this flow of red ink is understandable. Even worse, the business environment offers no signs of easy opportunities to improve. As the chief economist of the Brewer’s Association, Bart Watson, told NBC News:

"While the longevity of the brand is a testament to its innovation, the craft brewing market has radically grown and shifted over recent decades, with that change only accelerating in recent years," he said.

"A competitive distribution market and rising costs mean that even strong brands may be struggling to find growth in a slow growth environment that now includes nearly 10,000 breweries nationwide. Anchor’s announcement partially reflects this new maturing era for craft and should be taken in the context of the large and competitive market that Anchor helped create," he said.

It is a sad day for American beer drinkers, Anchor’s employees, and quite a number of people at Sapporo Breweries who championed the investment and took a role in managing it.