Home / News / How Sapporo USA Sank Anchor Brewing Co.

How Sapporo USA Sank Anchor Brewing Co.

May 18, 2023May 18, 2023

This Wednesday morning in San Francisco, Anchor Brewing Company’s familiar navy blue flag could be spotted flapping in the breeze atop the House that Steam Beer Built just as usual. But upon closer inspection, something was amiss. The banner was flying upside down — an orientation that the United States’ flag code reserves exclusively for instances of “dire distress.”

That tracks.

By now you probably already know that Anchor Brewing Co. is closing its doors after 152 years brewing beer in the City by the Bay. The company announced as much in a press release issued around 2 a.m. local time Wednesday morning, citing rising costs, pandemic challenges, and sliding sales. “Unfortunately, today’s economic pressures have made the business no longer sustainable, and we had to make the heartbreaking decision to cease operations,” Sam Singer, a local crisis-P.R. heavyweight who suddenly began answering my press inquiries to Anchor about a month ago, states in the release. (Singer declined multiple requests for comment.) The company will cease brewing at its venerable Potrero Hill plant immediately, and sell through its remaining beer in the next month or so.

Unmentioned among the press release’s list of factors precipitating Anchor’s demise was Sapporo USA. The stateside subsidiary of the Japanese conglomerate that acquired Anchor in 2017 isn’t named once in Singer’s overnight dispatch, but workers say it should be. After all, as far as they’re concerned, the parent company ran America’s first craft brewery into the ground.

“Sapporo sunk Anchor,” says Nate Dias, a former production worker at Anchor who left the brewery last month. His perspective comports with the stories I heard from his former colleagues while reporting this column. By the time news broke in early June 2023 that Anchor planned to kill off its Christmas seasonal, brewed annually since 1975, and discontinue national distribution of its portfolio (the flagship of which, Anchor Steam, serves as the foundational entry of the beer style now known as California Common ale), workers tell Hop Take that Sapporo USA had already undermined, overplayed, and generally cocked up its brief time at the helm of the historic firm.

Dias thinks the Japanese macrobrewer’s biggest mistake was purchasing the company in the first place. “Sapporo tried to [upgrade the facilities] to brew Sapporo,” its eponymous flagship rice lager, he says, even though Anchor, with its roster of ales, specializes in open fermentation. “We can’t brew Sapporo. We just don’t have the capacity to do that. I don’t know how they didn’t f*cking realize that.”

From that foundational gaffe flowed others. Dias, who worked at Anchor from March 2021 to June 2023, and two current workers who spoke on background for fear of retaliation, describes the tragicomedy of brewing errors. Execs postponed necessary plant maintenance, fought workers’ successful union drive in 2019 and stalled on the follow-up (and eventually successful) contract negotiations this year, and demonstrated an “extremely novice” grasp of Anchor’s brewing cycle. “Production schedule is a joke,” one worker tells me. “It changes week of, on a constant basis. It used to be ‘because of our workforce,’ which was the excuse. Now it’s something else, tomorrow it’ll be something else. It’s almost as if [bosses] can’t figure out how to manage our inventory or what we can produce.”

Sapporo USA also invested in costly automated equipment in hopes of modernizing the urban manufacturing landmark — something workers agreed was desperately needed. It didn’t go well. “Automation is cool to an extent,” says Dias, and at first Anchor’s workers were excited by the prospect of the labor-saving devices, viewing them as an opportunity to develop new skills and upgrade the aging brewhouse, which produced ~65,000 barrels of beer in 2022, according to a Brewers Association estimate reported last month by Good Beer Hunting. But the commissioning process dragged out over half a year, with the new bottling line “ripping bolts out of the concrete because it wasn’t installed correctly,” he says. “Then you’d have to wait for however long for it to be fixed again. We went from 500 barrels a day” to just around 200 by the time he left.

“Fuck those robots,” he adds.

When Dias came on as a cellarman in March 2021, Anchor was just two months removed from what may have been Sapporo USA’s biggest single mistake while running Anchor: the rebrand. In January of that year, the brewery rolled out a new look for Anchor’s packaging and logo, apparently designed to bolster the brand’s since-discarded national sales strategy. It was a technicolor disaster. Potential customers threw a fit on social media. One current Anchor worker, speaking on background for fear of retaliation, tells me that Anchor’s famed brewery tour guides fielded hundreds of questions from attendees begging to know if and when the old logo would be reinstated. “That was a major flop and we all know it,” another current Anchor worker told me last month. “Just another mistake[n] corporation thinking they can wipe away history.”

With morale flagging, turnover at the brewery — once a place that instilled fierce loyalty in workers who’d stay on for decades — increased dramatically with Sapporo in control. Dias, a former Anchor Brewing Union shop steward, estimates that the production team saw a replacement rate of 60 percent between 2021 and 2022. On the floors above the brewhouse, employees began to leave their white-collar roles and were never replaced. “What needs to be taken into account is the gradual change in numbers,” one current worker tells me. “The main people we’ve seen leave are from upstairs. It’s a ghost town up there.” And whether pulling Anchor’s national distribution back to California-only was a good idea — I think it had some merit, and wrote as much last month — it had to happen, because the brewery’s entire national sales staff had been laid off by that point, workers tell me.

By Spring 2023, communication between Sapporo USA brass and Anchor’s workforce, which was never good, became especially strained. Information would trickle down “to a certain point, then stop,” Dias says, voicing frustration with a middle-management layer that, in his view, was paid handsomely to “just answer emails and forward information to other people” while production workers were being paid a pittance and grilled for supposed inefficiencies. One of his former colleagues described a bureaucratic paradigm wherein management would “go into five different meetings about what to do” about a given issue, rather than address specific problems head-on.

If rebranding Anchor was Sapporo’s most unpopular decision, its most fateful one for the San Francisco brewery may have been its acquisition of San Diego’s Stone Brewing Co. about a year ago. “Sapporo had a brand new toy with Stone. They have more up-to-date facilities. They can produce Sapporo, we couldn’t,” says one worker. As union contract negotiations stalled at Anchor in mid-April 2023, Dias (then still employed at Anchor) told Brewbound that despite Sapporo’s claims to the contrary, “they’re the ones pushing the money” to fund an expansion of Stone’s Richmond, Va., brewery while workers in San Francisco bargained for livable wages. After five years of disappointment and embarrassment trying to run a brewery they never seemed to understand, you gotta figure that “new toy” — what with its culture of bravado and enormous, more modern facilities — was gleaming pretty bright in Sapporo USA execs’ eyes by then.

There’s more to this story, and your humble Hop Take columnist expects to be unpacking it for the next few weeks. (If you’re a current or former Anchor, Stone, or Sapporo USA employee, get in touch with tips! Email me at [email protected]. You can stay anonymous, thank you very much!) In the meantime, I’d encourage you to be wary of insistence that Anchor was doomed before Sapporo USA took over, or that workers’ 2019 decision to unionize precipitated this, when in reality it’s probably the only thing ensuring many of them a dignified severance. Expect opportunistic breweries trying to buy Anchor’s recipes and intellectual property to brew its beers elsewhere more cheaply, without the union labor, and opportunistic political hacks to hold up the brewery’s demise as more evidence of San Francisco’s woke-induced decay. Hope for a white-knight buyer to swoop in with enough cash to rescue San Francisco’s steam beer brewery once again, and enough wisdom not to try to bulldoze the idiosyncrasies and people that made it great.

And above any of that, remember this: Anchor survived everything — fires, depressions, recessions, everything — for nearly a century and a half before Sapporo USA came along and drove it into “dire distress” in less than half a dozen years. The company says it did everything it could; workers say it did too much, when it wasn’t doing enough.

Forget a navy flag flying upside-down. That’s a red one, flapping right in front of your face.

Look, I know the United States’ beer business is complex to the point of bizarre at times, but would it absolutely kill mainstream media outlets to ask some follow-up questions to put things in proper context? Last month, everybody went hog-wild over reports from The Wall Street Journal and Reuters showing Modelo Especial had unseated Bud Light as America’s best-selling beer, even though the underlying data pertain to a single four-week period of off-premise sales measured in dollars, not volume. I’m not trying to downplay it, but those are important caveats!!! Anyway. Sorry for losing my cool. Now, to take a big sip of coffee and open up this new Reuters article titled: “Modelo Especial tops Bud Light as most-sold US beer for second consecutive month”…

Congratulations to Funkytown Brewery on winning Sam Adams’ long-running “Brewing the American Dream” accelerator program this year… Reason Magazine (yes, the libertarian one) rebutted “underage drinking via booze-delivery” concerns with new data, imagine that…

Though the N.J. legislature unanimously delivered a brewery relief bill to Gov. Phil Murphy’s desk in late June, he’s now playing coy on actually signing it… It’s all over but the crying at Bang Energy, where new owner Monster is planning mass layoffsMay’s tax paids posted the worst year-over-year slide of 2023 so far, yeesh… Some of California’s biggest craft breweries are having foreboding flagship woes

This story is a part of VP Pro, our free content platform and newsletter for the drinks industry, covering wine, beer, and liquor — and beyond. Sign up for VP Pro now!

Published: July 13, 2023

Modelo EspecialBud LightAmerica’s best-selling beersingle four-week period of off-premise sales measured in dollarsmost-sold US beer for second consecutive monthFunkytown BrewerySam Adams’“Brewing the American Dream” Reason Magazinelibertarianunderage drinking via booze-deliverynew dataN.J. legislaturebrewery relief billGov. Phil Murphy’sJuneactually signing itBang EnergyMonstermass layoffsMay’s tax paidsworst year-over-year slide of 2023California’sflagship woesThis story is a part of VP Pro, our free content platform and newsletter for the drinks industry, covering wine, beer, and liquor — and beyond. Sign up for VP Pro now!