USA: Anchor Brewing bought by Sapporo Holdings

Anchor Brewing from San Francisco/California, the leading pioneer of the craft beer movement and an icon in American brewing history, announced on Thursday that it was bought by Japan’s Sapporo Holdings effective on August 31, 2017. Although exact terms of the deal were not revealed, a Sapporo spokesman said the price was approximately $85 million. This would be about 2.6 of yearly sales of $33 million, a bargain in comparison to the 8.7 multiple, which Constellation Brands paid in 2015 for craft brewer Ballast Point from San Diego/Caifornia.

Anchor Brewing is currently “running at about 55 to 60 percent” of the capacity of 180,000 barrels of its Potrero Hill brewery, says Keith Greggor, who bought the brewery together with his partner Tony Foglio in 2010 from Frederick Maytag III (called “Fritz”), a heir to the washing machine company with the same name, who saved the brewery from bankruptcy in 1965.

The two new owners announced a major expansion plan at San Francisco’s Pier 48 in 2013, but structural work for seismic upgrades and making the aged pier strong enough for a new use could easily top $25 million, even before Anchor Brewing starts construction of the new brewery. Therefore, the project was delayed to 2019 or might be even cancelled.

”Sapporo committed to investing in the Potrero Hill brewery until we exceed capacity of that brewery, but I have no idea when that would be,” says Greggor. And he adds that further investments are needed “in much better canning equipment. We have a rather difficult, labor-intensive management of our glass (bottles). Automatic palletizing, things like that, will be looked at.”

The reasoning for Sapporo to purchase Anchor Brewing is outlined on their website:

“Sapporo Group is pushing forward a distinctive plan that designates North America its business base and the rapidly growing “Southeast Asian” region as its highest-priority markets. In the US where the SAPPORO brand has maintained its position as the No. 1 Asian beer in the country over 30 years, the Group has been considering expanding its beer business through the acquisition of a new brand as well as further growing the SAPPORO brand.

Anchor is a prominent and historic US beer producer founded in 1896 in San Francisco. “Anchor Steam Beer,” its flagship brand, is said to be an icon that ignited the current craft beer boom in the US. Armed with its strong brand power primarily in San Francisco, where it is based, as well as other areas across the US, it has been enjoyed by countless beer lovers throughout the years.

The addition of Anchor’s strong brand power and network to the Sapporo Group’s US beer business portfolio through the conclusion of this agreement is expected to accelerate its speed of growth in the US.”

The company that became Anchor started in 1872 in San Francisco/California as American Brewing when the west coast city was booming after the gold rush. In 1896, the steam-beer brewery was sold and renamed Anchor Brewing. As such it survived the 1906 San Francisco earthquake, which killed about 3,000 people and destroyed over 80% of the city, the prohibition from 1920 until 1933 and even a near-bankruptcy after the Second World War when the American beer market was dominated by a few monopolistic breweries and there were less than 100 breweries left in the country. Today there are again more than 5,000.

Anchor Distilling, a microdistillery opened in 1993, which produces a single malt rye whiskey, named Old Potrero, Junipero Gin and other spirits is not involved in the deal and will become a separate company.

Before buying Anchor Brewing, Keith Greggor and Tony Foglio, were executives at Skyy Spirits and and were jointly responsible for growing Skyy Vodka and eventually selling their stake in Skyy Spirits LLC to Campari in 2007. In 2009 the two invested a minority stake in Scottish brewer BrewDog, when the two-year old start-up brewery was still based in Fraserburgh/Scotland. They joined BrewDog’s management team, with Greggor becoming a non-executive director.

Speaking on his reasons for investing in a Scottish company, Keith Greggor said by that time: “During our many years in beverage alcohol, we have only seen a few game-changing players come in fresh to the industry.  BrewDog is one of them.”

Anchor Brewing, started importing the BrewDog brand to the US in 2010 after Greggor and Foglio purchased Anchor Brewing but the San Francisco based company sold the exclusive distribution rights again, when BrewDog announced plans to build its own brewery in the mid-western city of Columbus/Ohio (inside.beer, 4.9.2016).

 

Newsletter

Please subscribe here for your free weekly newsletter!