One of America’s oldest breweries may really be shut down forever | Official Website of Louis Velazquez, entrepreneur, finance guy and tech innovator

Anchor Steam Brewing Company survived the 1906 San Francisco Earthquake, prohibition, two world wars, and several periods of social unrest.

But the pandemic and the inflation that followed were just a touch too much.

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So in 2023, and after 127 years in operation, the company announced it would shut down, making it just one of many craft brewer to shut its doors that year.

However, Anchor Steam is unique in the sector. It’s one of the oldest breweries in the U.S. and widely regarded as one of the first modern craft breweries here, so its closure hurt more than most.

Beer lovers around the world (including me) were devastated because the beer was delicious. One of the best things about living in San Francisco was how easy it was to find on tap.

But the brewer’s sales had been declining since 2016, and in 2017, Japanese beer giant Sapporo acquired Anchor Steam for around $85 million.

Shortly after the announcement, Hamdi Ulukaya, founder of the yogurt company Chobani, purchased Anchor Brewing’s recipes, brand, and intellectual property from Sapporo and promised to “bring Anchor back the right way.”

There was much hope that the brewery would get a second chance at life, but now, two years after Ulukaya’s public commitment, those plans are on pause.

Craft breweries like Anchor Steam in San Francisco have been closing at a rapid pace.

Image source&colon; Shutterstock

Anchor Steam beer will be made offsite

Despite a promise to restore Anchor Steam Brewing Company’s production facility and return brewing operations to the city where it began in 1896, Ulukaya’s team recently told The San Francisco Standard that they have no intention of reopening the original brewery or reestablishing a physical taproom in the city — at least for now.

Instead, the beer will now be brewed by a contract partner outside the city. While the brand may live on, its deep roots in San Francisco — and its significance to the American craft beer movement — appear severed.

One challenge may be that a dormant facility, such as the one in San Francisco, would take some time to become operational.

The traditional production methods that make use of San Francisco’s ambient yeast mean you can’t just a flip a switch and start pumping out bottles of Liberty Ale or Anchor Steam.

Maintaining Anchor’s adherence to old-style methods, including the use of open-air fermentation tanks and copper equipment, may require a learning curve for new employees.

Brewing Anchor Steam the way “California common,” as it is known, is brewed requires a craftsman’s touch and a lot of patience. This style of brewing is the only one to have originated in the U.S.

The brewing industry has been in crisis

Anchor’s halted comeback underscores a larger shift in the U.S. craft beer industry, which is facing declining sales, brewery closures, and rising costs. In 2024, more than 500 craft breweries shut down, according to the Brewers Association.

Even legacy brands like Anchor, credited with jumpstarting the modern craft beer movement, are struggling to survive. Consumers are drinking less beer overall, and younger drinkers are opting for hard seltzers, canned cocktails, or alcohol-free options instead.

Meanwhile, inflation has driven up the cost of raw ingredients, labor, and rent, especially in pricey areas like San Francisco.

Contract brewing, where brands outsource production to third-party facilities, has become an increasingly common survival strategy. But it often comes at the expense of authenticity and community connection — two values that once defined craft beer.

Anchor Steam’s planned shift to contract production highlights that tension. While Ulukaya’s team says they still intend to honor the brand’s legacy, some industry observers say a beer brewed hundreds of miles away and served without a taproom presence lacks the soul of the original.

Still, hope springs eternal, and I look forward to the day when I can visit my favorite taproom again.