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What the Anchor Brewing deal means for craft beer

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In San Francisco, the emotional stakes are especially high when it comes to Anchor. Steam Not only is it our brewery, it’s America’s original craft beer. 
In San Francisco, the emotional stakes are especially high when it comes to Anchor. Steam Not only is it our brewery, it’s America’s original craft beer. Brant Ward/The Chronicle

From the moment we learned that Japan’s Sapporo had acquired Anchor Brewing, I could already hear the gasps and groans.

The story is so familiar these days that it’s become cliche: beloved craft brewery, squeezed by today’s frenetic beer market and unable to expand without extra help, sells to big company.

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Equally cliche are the all-too-predictable reactions that inevitably follow, bemoaning that the little guys are selling out to greedy corporate interests intent on destroying craft beer.

In San Francisco, the emotional stakes are especially high when it comes to Anchor. Not only is it our brewery — our first, our signature — but it’s America’s original craft beer. It’s an icon of independence, and has seemed, at least we thought, large and established enough to be insulated from the pressures that have forced others to sell.

So powerful is the Anchor legend that Lagunitas founder Tony Magee invoked it when he announced in May that he had sold the entirety of his Petaluma brewery to Heineken: “The revolution in brewing and in beer culture that began at 1705 Mariposa Street in San Francisco has metastasized to every corner of the world,” he wrote in a blog post justifying his own decision to sell.

But let’s keep in mind that this is hardly the first time Anchor has sold. Anchor’s very founding, in 1896 by Ernst F. Baruth and Otto Schinkel Jr., was a buyout of sorts: The father and son-in-law bought an existing brewery on Pacific Street and rechristened it with their own brand. Over the next half-century, that brand saw several owners — Joe Kraus, Joe Allen, Lawrence Steese, all struggling to keep the dismal business afloat. Anchor was on the verge of closure when Fritz Maytag bought it in 1965. You might say Maytag was a harbinger of corporate America himself, heir to his family’s washing-machine dynasty.

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Even if Maytag was the soul of Anchor’s modern era (and I believe that he was) — well, he’s long gone anyway: He sold the brewery to the Griffin Group, a local investment firm, in 2010. Griffin is no AB InBev, but its partners, Keith Greggor and Tony Foglio, are former executives of Skyy Spirits. And Scott Ungermann, who in 2016 succeeded brewmaster Mark Carpenter (with Anchor since 1971), came to Anchor fresh from a nearly 20-year career with Anheuser-Busch.

I mention these things only in the interest of complicating that cliche narrative that tends to pervade the discussions of craft brewery acquisitions. It’s not as simple as David versus Goliath. Anchor already had plenty of Goliath in it.

It’s hardly worth rehashing the reasons why Greggor and Foglio might want to sell Anchor. As with Lagunitas, increasing global distribution has become a top priority, and that requires Sapporo-level muscle. Anchor’s beers are in about 20 countries today, Greggor said; Sapporo will grow that. Expansion, after a certain point, becomes impossible without outside investment.

Maytag himself put this chain of events in motion. He chose as a successor a business with real financial interests. He could have chosen a different successor if he had hoped that emotional ties, rather than dollar signs, would determine the brewery’s legacy. To the investment group, Anchor is just that — an investment.

Luke Neu carts hops at Anchor Brewing, Monday, April 27, 2015, in San Francisco, Calif.
Luke Neu carts hops at Anchor Brewing, Monday, April 27, 2015, in San Francisco, Calif.Santiago Mejia/The Chronicle

As for Sapporo, it’s something of a wild card in this craft-beer-versus-big-beer narrative. It’s a private company, and we don’t know exactly how much beer it makes. Like Anchor’s, its founding dates to the late 19th century. Like Anchor’s, its identity is closely tied to its city of origin. It’s never acquired a U.S. beer company before. Its only M&A activity since World War II was its 2006 purchase of Canadian beer giant Sleeman.

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The public relations line, naturally, is that Sapporo is committed to Anchor’s values of “quality, authenticity and heritage,” in Greggor’s words. What that means in practical terms remains to be seen. They say they won’t expand production beyond the current Potrero Hill brewery, which is currently at only about 55 percent capacity and has plenty of room to grow. Beers won’t change, staff won’t get laid off, Greggor said — but then again, that’s the script for these sorts of press releases.

Will the critical reactions, too, follow their usual script? No doubt the Bay Area craft beer community will bemoan the loss of Anchor’s independence. It should. But it’s hard to imagine Sapporo striking an equivalent chord to AB InBev, or even Heineken. Maybe it’s more like Duvel acquiring Firestone Walker: a sizable foreign player, sure, but one that appears a little less intent on world domination.

Or maybe there’s no script for where things go now. After the nostalgia, a deeper question remains: What is the future of the midsize American brewery? Big Beer, especially with the merger of AB InBev and SABMiller, keeps getting bigger. And craft beer keeps getting craftier. Especially in the Bay Area, micro-size breweries have found a comfortable business model in high-revenue taprooms, self-distribution and the righteousness of their independent-craft ethos. For the guys in the middle — Sierra Nevada, 21st Amendment, Bear Republic, Speakeasy, Anchor, Lagunitas — the Goldilocks principle doesn’t seem to be holding up.

Lagunitas couldn’t do it. Neither could Speakeasy. Now Anchor’s down, too.

Esther Mobley is The San Francisco Chronicle’s wine, beer and spirits writer. Email: emobley@sfchronicle.com Twitter: @Esther_mobley Instagram: @esthermob

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Senior wine critic Esther Mobley joined The Chronicle in 2015 to cover California wine, beer and spirits. Previously she was an assistant editor at Wine Spectator magazine in New York, and has worked harvests at wineries in Napa Valley and Argentina.

She can be reached at emobley@sfchronicle.com.