Sapporo acquires Anchor Brewing for $85m
Japanese brewing giant, Sapporo, has announced it has bought one of California’s leading craft brewers, the Anchor Brewing Company, for US$85 million.
The deal between Japan’s oldest brewer and the venerable San Francisco-based company that makes Anchor Steam was announced yesterday (Thursday 4 August) and marks the latest acquisition of the first wave of ‘craft’ breweries by a macrobrewer.
The deal will be completed by the end of the month and there are no plans to move the brewer from its current site in San Francisco.
“Sapporo shares our values and appreciates our unique, time-honoured approach tobrewing,” remarked Keith Greggor, Anchor Brewing’s co-owner.
“With both a long-term vision and resources to realise it, Sapporo will keep brewing Anchor’s beers in San Francisco while expanding to new markets worldwide.”
One of Anchor Brewing’s major shareholders is British fine wine merchant Berry Bros & Rudd.
CEO Dan Jago said in a statement: “As a shareholder of Anchor Brewing Company, Berry Bros. & Rudd can confirm its agreement to sell the brewing business to Sapporo Holdings Ltd, Japan’s oldest beer brand.”
He added further that the sale only included the brewing arm of Anchor and that its distilling business had been separated from its parent body in the sale and is now an independent company in its own right.
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“Anchor Distilling Company, which formed part of Anchor Brewers & Distillers, has been made an independent company and Berry Bros & Rudd continues as a significant shareholder of the business,” Jago explained.
Anchor Brewing is just the latest craft brewer to be snapped up by a bigger competitor, other recent big purchases being Heineken’s acquisition of fellow California brand Lagunitas and AB InBev’s purchase of Goose Island.
It is also the second high profile move by a big Japanese brewer in recent years with Asahi having acquired Peroni, Grolsch, Meantime and Pilsner Urquell in a multi-billion euro deal late last year after the brands were sold off by AB InBev following its takeover of SAB Miller.
As reported this week by the drinks business, a Goldman Sachs report pointed to the slowing growth of the US craft beer scene.
Business Insider, picking up on the same thread, postulated that Sapporo was therefore able to pick up Anchor Brewing “on the cheap”, having bought the brand for 2.6 times its revenue whereas Constellation paid 8.7 times the revenue for the less well-known (internationally at least) Ballast Point in 2015 when the craft beer market was booming.
Founded in 1896, Anchor Brewing is one of the oldest breweries in the US and one of its craft ‘originals’. Last year it sold a reported 1.75 million cases and generated revenue of US$33m.
With the U.S. being one of the most prominent consumer markets (across several industries), it becomes extremely apparent why these Japanese brands are seeking out partnerships and acquistions (pre-established distribution channels, marketing and brand recoginion platforms in which they can then introduce their domestic products into the US market). However, the concern from the disposition of the US consumer should be: will this bring a greater variety / diversity or consolidation of brands and drinks? Wlll US brands lose their intrinsic identities and explicit flavor profiles? Will the previous owners of the acquired brands use this newly obtained capital to begin different ventures within the industry? Does this continue to promote creative offerings for the customer, or merely entry incentives for monetary gain?
Only time will determine this I believe. (IG: King Block Dean)