Anchor's Away — Sapporo Acquires America's "First Craft Brewery" for a Sinking Sum

Michael Kiser

THE GIST
Japan’s Sapporo Holdings Ltd.—which is known globally for its light Lager—has today announced the purchase of San Francisco’s iconic Anchor Brewing Company. The deal, announced early this morning via a press release from Sapporo, is reportedly worth $85 million—according to Bloomberg Tokyo correspondent Gearoid Reidy via Twitter—and is expected to close by Aug. 31. Anchor was the 22nd largest craft brewery by volume last year according to the Brewers Association. 

WHY IT MATTERS
This deal has come along at a time when the global beer industry is seeing an increasingly high level of interest from the Japanese market. Less than a year ago, Kirin purchased a 24.5% stake in Brooklyn Brewery, and in the fallout of the merger between AB InBev and SABMiller Asahi, added numerous brands to its portfolio, including Pilsner Urquell and London’s Meantime Brewing. As sales of Japan’s domestic beer brands continue to wane, this interest in the Western beer market from the country’s biggest players is seemingly only set to increase.

Anchor itself is no stranger to investment and acquisition. After being founded in 1896 and eventually falling on hard times it was famously acquired by Frederick “Fritz” Maytag in 1965, who is often credited with establishing America’s first craft brewery. In 2010 Anchor was purchased by The Griffin Group, which then re-established the California brewery as Anchor Brewers & Distillers LLC. Throughout this series of acquisitions Anchor has remained true to its core brands such as its famous Steam Beer. But more recently, it's been attempting to maintain a semblance of relevance in the modern market with a range of new IPAs and fruited Lagers and ales.  

The valuation of this transaction will come as a shock to some because it’s considerably lower than that of other recent brewery acquisitions—$85 million is just 2.5 times that of the company’s 2016 annual sales total according to Sapporo’s press release. It’s a figure that feels somewhat insignificant when compared to the billion-dollar valuations that both Lagunitas and Ballast Point commanded in their own acquisitions by Heineken and Constellation Brands respectively—especially when you consider the heritage and legacy that Sapporo will be adding to its portfolio.   

But how will America react as one of the darlings of its craft beer scene eschews its independence? Since the introduction of the somewhat controversial seal of independence released by the Brewers Association earlier this year, who-owns-who is at the forefront of many a beer consumers mind. The vitriol that was spat when AB InBev acquired Asheville’s Wicked Weed back in May is an ever-present reminder of this.

For Anchor's part, they seem to anticipate some of the judgement that will come from the hardcore base of craft and decided to fire the first shot. In speaking with the SF Gate's Alyssa Pereira, president and CEO of the company said “Anchor has been making handcrafted beer since long before ‘craft’ was coined. I would argue (Anchor’s beer) is more handcrafted than any of the craft beer out there today. However, while it might not fit the definition of some self-appointed organizations, we’ll always be the original, and we’ll still be handcrafted in San Francisco.”

But is that what lies ahead for Anchor, a brand that, for some, likely doesn’t register as craft at all given its traditional status and ubiquity in America, even as it remains an iconic trailblazer for others? Anchor has been a cornerstone of the American craft beer movement for several decades. The last time Sapporo bought a small, independent brewery in North America, which was Unibroue in Quebec, people threw their bottles and glassware into the streets in protest. Only time will tell if this acquisition will result in America’s independent beer movement setting it adrift.

—Matthew Curtis


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San Francisco’s Anchor Brewing acquired by Sapporo (via SF Gate)