In August, Sapporo USA unceremoniously shuttered Anchor Brewing Co., the iconic San Francisco institution it had acquired in 2017. You probably heard about it, and perhaps from this very column: Thanks to hot tips from Bay Area and brewing industry sources, your humble Hop Take columnist was able to break a bunch of news and generally cover the shit out of the closure and its lead-up all summer.
But summer is over. On Aug. 2, Sapporo USA (SUSA) transferred Anchor’s assets to a third-party fiduciary, known as an “assignee for the benefit of creditors,” to manage the process of liquidating the venerable old brewery, which had until then been producing beer in San Francisco in one capacity or another since the late 1800s. The process itself is called an “assignment for the benefit of creditors,” or ABC, and it’s currently afoot, meaning that even though Anchor no longer exists in a legal sense, it may in the future.
For now, though, the House That Steam Beer Built sits idle on Potrero Hill. Anchor is in liquidation limbo.
“It’s kind of like a pause, or hitting the pause button as we figure out the future of the assets that were part of Anchor before,” says Larry Perkins, the founder and chief executive of SierraConstellation Partners. The firm is managing Anchor’s ABC process via a specially spun-up LLC, ABS OpsCo. “My job is almost to be agnostic to the process,” he tells Hop Take in a phone interview. “This is the business that we have right now. How do I turn that into the most dollars possible so we can pay back as many of the creditors as possible?”
Though ABCs and court-managed Chapter 7 bankruptcy proceedings aren’t the same thing, they share a goal in salvaging cash for — in roughly this order — secured investors, vendors, employees, and anyone else left holding the bag when a business goes belly up.
Speaking of Anchor employees: You may recall my report from July 19 that roughly 40 of the brewery’s workers planned to mount a Hail Mary bid to save Anchor from liquidation and run it as a cooperative. The group had called on SUSA to delay transferring the brewery to the liquidator, but the firm demurred the request, suggesting the ABC process was inevitable. Whether the now-former employees would be able to acquire the brewery “will be in the hands of the liquidator to make that decision and is dependent on what is offered by potential purchasers,” Sam Singer, SUSA’s spokesman, told The New York Times in a July 20 article that credited my reporting.
(Singer, a high-powered spin doctor, has ignored or declined my requests to comment for every story I’ve published about Anchor since June. Because of that, and the fact that SUSA has legally washed its hands of Anchor’s fate, I didn’t bother this time around.)
Whether such a stay-of-liquidation from SUSA was actually possible is immaterial now. But rather than throw in the towel once the initial public thrill of their longshot bid subsided, the group formally registered itself as the Anchor SF Cooperative, Inc. (ASFC), and began slogging through the legwork to mount a formal bid in the eventual liquidation process.
“We’re figuring it out as we go along,” says Patrick Machel. The former production worker and shop steward of Anchor Brewing Union has since been elected by the cooperative’s members to one of the group’s five board seats, and filled in Hop Take on what the co-op has been up to in the intervening month and a half in a recent phone interview. Settling on the right type of corporate structure, getting an employer identification number (EIN), getting the right kind of bank account — this stuff takes time. But it’s important: “We’re trying to work as a company and be as legal as possible,” Machel says, because it’s the group’s best shot at pulling off a miracle.
If the intervening month and a half since its inaugural announcement hampered the ASFC’s momentum, you wouldn’t know it based on the noise it’s made lately. In late August, the group began releasing collaborative “Solidarity Ales” with local breweries to raise money and awareness for its gambit. And on Sept. 6, the group created a GoFundMe page to raise donations to help cover the various legal and operational costs associated with entering a bid during Anchor’s ABC process. The initial goal was $50,000; in five days the effort cleared $80,000 on the backs of 1,300 donations.
Almost all of those are under $500, too, which Machel and co. argue is indicative of just how much ordinary San Franciscans want Anchor workers to reopen and run its Art Deco plant in the same neighborhood it has occupied since the ‘70s. As I write this, the fund stands at a little over $98,000, and the last five donations average just $28. “It’s been f*cking awesome to see that,” says Machel.
Of course, SUSA acquired Anchor half a dozen years ago for some $80 million, and while the firm has indisputably lost considerable dollar and volume sales under its ownership, the brand remains strong. Plus, the real estate the brewery sits on is extremely desirable; as fiduciary to its creditors, Perkins will be legally obligated to evaluate bids based in part on whether they offer the “highest and best use” for the land under the brewhouse floor. All of which is to say, ASFC is going to need a whole lot more than $100,000 in order to mount a competitive bid. Machel says the co-op has been talking with potential investors who might be interested in helping to fund its offer, and aren’t in the hunt for quick, easy, or big financial returns on their investment.
That’s a difficult pitch that requires finding the exact right kind of capital. And even the most sentimental and sympathetic financier is going to want to see an actual business model with real numbers — something that ASFC has so far struggled to get its hands on. Prior to SUSA’s spin-off of Anchor, the International Longshore and Warehouse Union’s Local 6, which repped the brewery’s workers, alleged in a July 27 press release that the firm was withholding financial information from the then-coalescing co-op that it had already provided to other prospective buyers. A month and a half later, the ASFC still doesn’t have it.
“We know that there are at least two serious potential buyers that have received access to the data room,” Machel tells me, using the finance world’s term for the real or virtual cache of sensitive information about a company in liquidation. ASFC has not. “It puts us in a Catch-22. How do we [pitch] investors if they don’t know what the f*ck we have?”
Perkins tells Hop Take that “not to [his] knowledge” has any prospective buyer been granted access to Anchor’s financials, but that he can’t vouch for anything that happened before he took over. Still, he’s aware of the ASFC’s frustrations. “If we can put in an organized process that allows [the co-op] to participate in that process with the same level of access as anybody else, that’s literally my job,” says the liquidator. “I want to make sure that they can participate.”
As of yet, Perkins says there’s little for the ASFC to participate in. No formal bids have yet been entered, and he isn’t even soliciting them yet, telling Hop Take he hopes to go to market with a comprehensive offering “in the next couple weeks.” Besides the co-op, pre-offering interest has come mostly from brewing industry players and wealthy private individuals, though Perkins of course declined to name names. But he emphasizes that he sees a real opportunity to sell Anchor as a going concern. “There’s going to be a future for Anchor Steam.”
As to who, where, and how much? Those are answers that only the future holds.
🤯 Hop-ocalypse Now
Woke-ism: urgent social crisis, or catch-all authoritarian distraction? It’s hard to say. Just kidding, it’s definitely the latter! But as Bud Light can readily attest, American reactionaries’ red-assed hysterics can have unpredictable and wide-ranging implications. One such consequence is that conservatives in other countries are now smearing policies that they don’t like as examples of “wokeness” run amok — like, for example, in Munich, Germany, where “traditionalists” (ahem) are mad at the introduction of vegan sausages and organic chicken at this year’s Oktoberfest. Some Germans are calling the 2023 event “Die Woke Wiesn,” or “the woke Oktoberfest.” That’s right, folks: Oktoberfest has gone woke.
📈 Ups…
Congratulations to the latest crop of Michael Jackson Foundation scholarship recipients… Hop water was up 142% in volume between 2020-2022 (small base, but still)…
📉 …and downs
Coors Light is taking another crack at the Super Bowl after whatever this was last year… SweetWater Brewing Co., the Georgia-based jewel in Tilray Brands’ craft-brewing crown, faces a $31 million copyright lawsuit…
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