Former Anchor Workers Move Forward With Efforts to Resurrect Beloved SF Beer

For the first time since 1975, Bay Area beer lovers will be forced to forgo a holiday staple this year: Anchor Brewing’s Christmas Ale. Japanese brewing giant Sapporo — which acquired Anchor, the nation’s first craft brewery, in 2017 — shut it down in the summer, leaving fans hurting and a handful of unionized employees motivated to bring it back.

Earlier this month, Anchor fans flocked to San Francisco’s BuzzWorks sports bar, just a five-minute drive from the recently closed brewery. They came to drink the last of the bar’s Anchor Steam beer kegs and to bid on the 11 Christmas Ale magnum-sized bottles the bar had stockpiled.

To beer fanatics Noel Hansen and Andy Beresford, the holidays aren’t the holidays without Anchor Christmas Ale.

“My cousin would be bringing the turkey in a cooler full of ice water, and he’d have the magnum next to it. Chilling. That’s the tradition, you know, in an igloo cooler out on the patio,” Hansen said.

Beresford flew in from Scottsdale, Arizona, to try to score some Christmas Ale at the SF BuzzWorks event.

Some former Anchor workers were also in attendance, passing out flyers to inform people of the Anchor SF Cooperative — a group of five previous workers vying to bring back the beer they once brewed now that the 127-year-old company’s assets are up for auction.

After Sapporo announced in July that they were going to shut down Anchor, employees only had a few weeks to get organized. By September, a team of former brewers, production workers and bartenders assembled the Anchor SF Cooperative with the mission of keeping the beer brewed in the city by an employee-owned company.

Anchor’s employees have a history of banding together. In 2019, Anchor employees became the first unionized craft brewing company in California.

The new co-op started a GoFundMe on Sept. 1 to help pay for legal services and employee business ownership counseling — and they surpassed their $50,000 campaign goal by more than double.

To Patrick Machel, board chair of the Anchor SF Cooperative and former beer packaging lead, Anchor is much more than a brewery.

“Anchor Steam, at this point in time, is a San Francisco institution,” he said. “We’re so tied in with what the history of San Francisco is. We’ve survived earthquakes, two world wars … if you talk to anyone that’s worked there, it’s one of the best times in their life.”

Brewery cooperatives, while rare, are not unheard of — but operating them can mean dealing with some unique regulatory and licensing challenges. As California’s first co-op brewery, Umunhum Brewing in San Jose encountered some of these challenges, which Anchor and any other brewers looking to operate as a co-op are likely to face.

Umunhum Brewing Board President Travis Alexander said brewing cooperatives can be challenging due to the communal nature of ownership. When applying for licenses to make and distribute alcohol, California’s Alcoholic Beverage Control board requires a list of people who have more than 10% ownership in a company. In the Umunhum cooperative, there are over 500 members who have an equal share.

“We are different from what everyone else is doing, and so we have to get the approval from agencies who are saying, ‘Why don’t you look like everything else coming through?’ ” Alexander said.

Alexander notes that cooperatives can take different approaches to funding. Umunhum started out by offering anyone in the state of California a lifetime membership for $150.

A member-ownership model funds most cooperatives. Sacramento brewery New Helvetia Brewing Company is also fighting to stay alive by switching to an employee-owned model. According to their website, a $300 membership fee includes becoming a legal part-owner of the brewery, as well as product discounts and decision-making power about the brewery’s future.

The Anchor’s cooperative’s effort to get off the ground is a unique case due to the additional burden of needing to bid on the company’s assets.

Unlike Umunhum, Alexander said Anchor does not have the luxury of time.

“They’ve got a time constraint, first of all. If they don’t act quickly enough, they lose the opportunity. They can’t do our method,” Alexander said. “But also because they have the expertise and all the tools they need, I think the method they’re doing is the right approach.”

‘It’s all about the bidding process’

The cooperative launched a crowdfunding effort on Wefunder on Nov. 17. Investments begin at a minimum of $250, which gives an investor a stock certificate of ownership. The plan is to start by leveraging those funds to buy Anchor’s intellectual property, which includes recipes and trademarks, with the goal of eventually securing a lease in San Francisco at either the old De Haro Street brewery location or elsewhere and to begin brewing again in early 2024.

Machel calls this phase “testing the waters.”

“Essentially, it’s opening [funding] up to everybody, seeing how much we can get and if there’s a viable path this way,” he said. “With this phase, there’s a lot more legal language around it because we’re dealing with bigger securities, big investments.”

Machel said the cooperative hopes to raise a minimum of $2.5 million — but ideally, they hope to get the Wefunder maximum of $5 million. They see this as the best strategy forward if they want to keep the beer brewed in the city where it was born.

If the cooperative successfully obtains the IP, they would be the only ones able to brew Anchor beer recipes, potentially attracting investors who could support their plan to continue brewing.

That said, intellectual property lawyer and patent law professor at the University of San Francisco Michael Dergosits said most cases like this come down to money and that the background interest of bidders is generally irrelevant.

“It’s all about the bidding process,” Derogsits said. “And the company who is responsible for selling the assets probably has some fiduciary obligation to Sapporo to get the best price for as much as possible for as many of the assets as possible.”

Sapporo tasked financial services company Hilco Global to handle asset liquidation and the private bidding process on Anchor’s intellectual property, real estate and brewing equipment.

The cooperative and other potential bidders are unclear on the timeline of negotiations. A Sapporo spokesperson said that discussions on how assets should be divided up would happen this month and could run into the new year.

Although the cooperative only intends to begin by bidding on the IP, Machel believes their experience incentivizes potential partnerships with other buyers.

“We have the knowledge and the people that understand those machines more than anybody else would,” he said. “This isn’t a normal brewery. You can’t just hire a packager or a brewer or whoever and just expect them to go in and it be turnkey.”

While Machel is confident in their strategy to buy the IP, co-op board treasurer and former brewmaster, Dane Volek sees things going differently.

“I don’t think we’ll get it. I think someone else will, but I think we’ll be working with that person. So no, but yes, maybe. Who knows?” Volek said.

Volek, 37, has worked for Anchor Brewing since he was a 19-year-old sophomore studying kinesiology at San Francisco State University. He started in the packing department. By the time he graduated, he had no plans of leaving Anchor and wound up working almost every position at the brewery until becoming the master brewer in 2022.

Although Volek isn’t sure their bid will actually be successful, he is optimistic about Anchor’s future.

“We’ve had some conversations with a couple different parties that are making bids… for the entire kit and caboodle, as they say,” Volek said. “They’ve been positive conversations.”

Some of those conversations have been with venture capitalist Mike Walsh, a long-time Anchor fan who has been looking at ways to save the brewery since its closure.

“[The co-op] wanted us to submit a bid with them, but we didn’t want to rush into the work needed. We thought we needed to evaluate exactly how the co-op would work,” Walsh said. “But we certainly want every former employee that wants to be involved, involved.”

Walsh and his team of investors submitted a bid on Nov. 17 for all the assets, including the real estate and machinery, and feel confident in their offer. He said he’s less interested in profit and more interested in keeping the first craft brewery in the nation alive.

“I’m not a native, but I built my career in San Francisco, and with the incredible beating it’s getting right now, I just think that this can’t be another dead soldier in the battle of the pandemic,” Walsh said. “It’s kind of my way to give back to San Francisco.”

Walsh said he expects the buyer to be announced at the end of January.

If the cooperative is successful, Machel said they’re ready to get back to brewing dad beer.

“It’s what we are, what we’re good at,” he said. “People, when they think of Anchor Brewing, they think of steam beer. They think of California lager, porter, fog horn, the classics. And that’s kind of what we’re gonna focus on.”

Volek has always been a fan of both brewing and drinking the Anchor Christmas ale. Anchor’s previous owner, Fritz Maytag, who saved Anchor from closure in 1965, once told him that making the Christmas Ale was like making a curry: spice-rich for both the mouth and the nose.

“As soon as the spices go in the kettle, or when they’re doing the strike in the hop separators, spitting the hops out, multiple floors of the brewery would be filled with these spicey elements,” Volek said.

This Christmas, he’s anticipating opening a few bottles he’s stockpiled.

“I still have magnums going back to 2008 Christmas ale. I’m sure this year, we’ll do a big vertical with people and open a few bottles. Make some room in the beer cave,” Volek said.

He still has about a case and a half left.

This story has been updated.