At Anchor Brewing, Christmas Is Canceled and the Future’s in Flux
In 2019, workers at Anchor Brewing Company went public with a drive to unionize the storied San Francisco institution. I covered it at a couple different points, and one of the things that stuck out was how much the workers flat-out cared about the iconic steam-beer producer and its Bay Area history. “The reason I took this job is because I love Anchor Brewery,” one worker, a part-time tour guide, told me when I asked why he was supporting the organizing effort. Safeguarding Anchor’s San Francisco identity within the portfolio of the Japanese brewing conglomerate Sapporo, which acquired the company in 2017, was “almost 100%” of his motivation for going union.
Any labor organizer worth their picket will tell you that unions are no silver bullet antidote to corporate power — they just give workers a seat at the table, a chance at making their collective voice heard. The boss is still the boss, in other words. So despite winning their union election in 2019 and ratifying their first contract in 2020, Anchor Brewing Union workers still found themselves blindsided last week when their bosses told them that Sapporo USA was planning to discontinue Anchor’s historic Christmas ale and scale back distribution of the rest of its portfolio from 50 states down to just its home market in California. And they were pissed.
“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.
A representative for Anchor and Sapporo USA, Sam Singer, declined to address specific critiques about the brand’s management by Sapporo’s U.S. subsidiary, Sapporo USA, or make an executive of either firm available for an interview. In response to detailed emailed questions, he provided only a brief statement citing “challenging economic realities,” inflation, and downward industry trends as factors in the firms’ recent decisions.
There’s no doubt it’s a difficult moment for craft breweries, particularly American heritage breweries like Anchor. But killing Our Special Ale — the official name of the holiday release generations of drinkers know simply as Anchor Christmas Ale — is especially flummoxing. The beer has been produced annually since its introduction by the godfather of craft beer, Fritz Maytag, in 1975. It definitely takes more legwork to produce than “regular” Anchor beers, like developing a slightly new recipe every year, commissioning a new, hand-drawn label, and bottling some of it in holiday-party-ready magnums. But the uniqueness, the tradition, the toil — that’s all part of the point. “There is a lot of love and effort put into the process,” the current Anchor worker tells me. “What a major corporation sees as cost cutting, a lot of us see it as killing one of our most cherished traditions. It’s as if they don’t care.”
“Those seem like cover-your-ass excuses,” agrees Brace Belden, a former Anchor worker who left the brewery in 2020 and now co-hosts the popular leftist podcast, TrueAnon, referring to the companies’ cited reasons of time-intensivity and cost for discontinuing the holiday beer. (Singer says it will be produced in limited quantities this year for Anchor’s taproom, but tells SFGate “it’s unlikely that it will come back” in bottles.) The Christmas ale was never easy to make, he says, “but somehow, the brewery was able to manage this for decades before Sapporo USA.” It’s hard to imagine Our Special Ale was losing so much money each year that it was putting Anchor in the red on its own. And even if it was a moderate loss-leader, pulling it — canceling Christmas, so to speak — vaporizes nearly half a century of goodwill and nostalgia that ain’t never coming back.
Absent a detailed accounting from the companies, we’ll never know for sure. But for the sake of argument, let’s say Our Special Ale has been losing enough money to pose a serious threat to Anchor’s solvency. That just begs another question: How?! No limited release should be able to burn enough resources to destabilize a brewery with a year-round portfolio and a national footprint. But it’s true Anchor’s portfolio has struggled mightily in recent years. Analysis of Circana chain-retail scan data by Kate Bernot for Good Beer Hunting shows that the brewery’s off-premise sales have averaged a 15 percent decline annually since 2015. (NB: That doesn’t include draft, where Anchor has traditionally been stronger. But still.)
Supporting a national sales operation is expensive — much more so than sourcing spruce tips and a new illustration for a small seasonal release. So the logic of retrenching Anchor as a Golden State-only brand is slightly easier to grasp. There are examples of successful, long-running craft breweries that kept their distribution footprint small and focused on deepening local penetration (the New Glarus Doctrine, as it were), or right-sized their approach after going wide and wound up better for it (Allagash comes to mind here.) That makes it slightly more palatable, too. The current Anchor worker eyes the pullback with “an ounce of optimism,” tough pill to swallow though it is. “We used to be in every bar in SF. We’ve since lost that dominance. If staying regional helps us out to get back into every bar, we’re down for it.”
Whether Anchor can reestablish itself as a California-only specialty brand, with out-of-state drinkers thirsting for Anchor Steam the way they currently do for, say, Spotted Cow, turns on how well the company pitches its liquid wares to ombibulous drinkers with more options than ever. Put another way, it’s a challenge that the brewery workers themselves can’t solve; finding new niches for old brands calls for ace marketing attuned to both Anchor’s centuries-spanning legacy and the contemporary drinking zeitgeist.
Sapporo USA’s controversial 2021 rebrand of Anchor is not confidence-inspiring on this front. “That was a major flop and we all know it,” says the current Anchor worker. “Just another mistake[n] corporation thinking they can wipe away history.” Now, with the brand’s singular old-school aesthetic supplanted by a bolder, more generic scheme that makes Anchor’s beers look like so many other breweries’, Sapporo USA is pivoting the brand back to the market where its legacy carries the most weight. Cruel irony, that. “If they’re focusing on the [California] market they shouldn’t have broken with over a century of tradition and tried to homogenize the beer with their generic rebrand,” says Belden, adding that Anchor Steam, in its new yellow-and-blue cladding, looks like Twisted Tea. (I tend to agree.) “I’m no businessman but that seems like Marketing 101.”
What the future holds for San Francisco’s 127 year-old brewery will depend in part on how serious Sapporo USA is about making this homecoming successful. With the 2022 acquisition of San Diego’s much-bigger Stone Brewing Company, and a surging portfolio of non-craft brands, the conglomerate’s continued investment in Anchor is not certain. But the workers still have a seat at the table — and having ratified their second collective bargaining agreement on Tuesday, more time to focus on steering the ship, too. “[B]ased on all the news that’s come out in the last few days we’ve got a long year ahead of us,” Anchor Brewing Union posted to Instagram earlier this week, as votes were being cast. “Let’s get this done and show them why not to mess with union workers.”
🤯 Hop-ocalypse Now
Molson Coors: huge! North America: even huger! And yet I can’t help but wonder where the hell the macrobrewer beverage company went so wrong that it had to take a $845 million partial goodwill impairment charge on its North American business earlier this year when reporting its overall 2022 performance to shareholders. And the company isn’t saying, either: Kate Bernot (who earns double-mention in this week’s column, she’s just that good!) asked the firm whether any of that staggering write-down had to do with its middling Tenth and Blake craft portfolio, and received nary a detail in response. Wait… are founder sell-backs the new impairment charges? Asking for Constellation Brands. And Anheuser-Busch InBev, too. Let me know!
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📉 …and downs
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