Big Beer snaps up iconic Anchor brewery

Anchor Brewing, a true icon of the American beer revolution, has been sold to giant Japanese brewer Sapporo and yet another independent producer is now owned by what Americans call Big Beer.

Anchor was saved in the mid-1960s by Fritz Maytag, a student at Stanford University. He enjoyed drinking a beer called Anchor Steam but was told one evening that the glass he'd ordered in a bar would be his last as the brewery was about to close. Fritz had the good fortune to be a member of the Maytag washing machine dynasty and he was able to cash in some of his stock and buy the ailing plant.

Anchor Steam dates from 1896 and produced beer to refresh the large army of prospectors who poured into San Francisco in search of gold and wealth. At the time, the city had a mainly Mexican population that drink wine and tequila. The gold diggers wanted the cold, refreshing lager beer they drank on the east coast of the US or in Europe.

But refrigeration had failed to reach the west coast and there was an absence of icy caves to store beer in. As a result Anchor and other local breweries tackled the problem with great ingenuity by fermenting beers with lager yeast cultures but at ale temperatures. They developed shallow vessels that exposed more of the fermenting beer to the atmosphere and encouraged it to cool rapidly. The beer had such a lively level of carbonation inside casks in bars that when they were tapped they gave off a hiss of escaping gas that drinkers said sounded like steam escaping from a kettle or boiler.

Steam beer became a California speciality but it went into decline as a result of Prohibition in the 1920s that led to the rise of giant brewers such as Anheuser Busch who promoted bland, ersatz lagers. The brewery Fritz Maytag inherited was so strapped for cash that it was using baker’s yeast to ferment the beer. Fritz nursed it back to good health though it took 10 years before it made a profit.

Fritz went on a whirlwind tour of Britain and Europe to see and taste traditional beer styles there. In Britain he visited Young’s in London and Timothy Taylor in Yorkshire and acquired a taste for English pale ale. When he returned home, he added Liberty Ale to Steam Beer in 1975: despite its English roots, the 6 per cent beer was named to mark the 200^th  anniversary of Paul Revere’s ride from Boston to Lexington to warn the American rebels that the British Redcoats were marching to arrest them. His ride signalled the start of the War of Independence.

Since then Fritz added porter, Old Foghorn barley wine and annual Christmas ale. More recently the brewery has added several IPAs to its range.

Under his guidance, Anchor inspired a generation of young brewers to set up shop and challenge the hegemony of the giant brewers with full-tasting ales, lagers and wheat beers. But the writing was on the wall for Anchor in 2010 when Fritz Maytag, in his late 70s, sold the company to Keith Greggor and Tony Foglio who had developed and then sold Skyv Vodka. It seemed clear they were not in for the long haul with the brewery when they added a separate Anchor distillery, which they continue to own following the sale of the brewery to Sapporo.

Sapporo say they will improve distribution and packaging of Anchor beers. What is unknown at present is whether the beers and their recipes will change under new ownership where marketing and undercutting rivals is the norm.

The craft sector in the US, with its trade group the Brewers’ Association, is so concerned by the manner in which Big Beer is muscling in on the independent sector that it has launched a Seal of Approval scheme. The seal will appear on labels and the aim is to enable consumers to differentiate between craft beer and the products made by the global brewers who use the names of smaller companies they have taken over.

In Britain, SIBA – the Society of Independent Brewers – has launched a similar accreditation scheme. The American and British organisations have worked closely together, with SIBA’s chief executive Mike Benner visiting the US to discuss the need to combat the rise of Big Beer with members of the Brewers’ Association.

The concern over the erosion of drinkers’ choice is not exaggerated. In 2016, the world’s biggest brewing group AB InBev bought SABMiller, its major rival, for £71 billion. It was the third biggest takeover in corporate history and gave AB InBev control of 30 per cent of global beer production and sales.

The group is the result of earlier mergers between Anheuser Busch of the US, AmBev of Brazil and InBev of Belgium. It owns such mass market beers as Budweiser, Brahma, Beck’s and Stella Artois. The takeover of SABMiller has given the group an important foothold in southern Africa where SAB stands for South African Breweries.

But AB InBev has been busy in both the US and UK markets. In 2016 it bought the Camden Town Brewery in North London for £80 million and built a much-enlarged site for the brewery in Enfield a year later. Before the takeover, SABMiller had bought the leading craft brewery Meantime in Greenwich for the staggering amount of £120 million. When regulators in the US and the EU told AB InBev it had to drop some of its brands to satisfy competition rules it sold off Grolsch, Peroni, Pilsner Urquell and Meantime. The Greenwich brewery is now owned by Asahi of Japan.

The stage was set for the takeover of independent brewers by Big Beer in 2011 when Molson Coors bought Sharp’s of Cornwall. Molson Coors is a Canadian-American company that occupies the former Bass breweries in Burton-on-Trent. It has invested £7.5 million in Sharp’s, boosted production from 60,000 barrels a year to 200,000 and turned Doom Bar into the biggest-selling cask and bottled beer in the UK.

Heineken, another global giant, owns the Caledonian Brewery in Edinburgh where Deuchars IPA is a leading brand in cask and package. Carlsberg has just bought London Fields Brewery in Hackney and has said it’s on the look-out for further acquisitions.

The reason for this activity by Big Beer is caused by declining sales of their mass market lager brands in traditional markets. In the US, AB InBev has bought a raft of craft breweries, including 10 Barrel, Blue Point, Breckenridge, Devils Backbone, Elysian, Four Peaks, Golden Road, Goose Island and Shock Top. It has substantial stakes in a number of other breweries.

Miller Coors, now wholly owned by Coors, has taken Blue Moon, Leinenkugel’s and Saint Archer under its wings while Heineken has turned a 50 per cent stake in Lagunitas into complete ownership.

British consumers will have noticed that Goose Island and Lagunitas beers are now widely available here in major supermarkets and at remarkably cheap prices of around £1.70 a bottle.

They can sell their brands at low prices as a result of being able dramatically to reduce the costs of production. As a result of their sheer size, the global brewers can buy malt and hops in vast bulk and can drive down the prices they pay. It’s estimated that Big Beer has 40 per cent lower costs than even big and medium sized brewers.

When AB InBev bought Modelo in Mexico, it stripped 20 per cent of costs out of the company. With Beck’s in Germany it reduced costs by 15 per cent. It’s estimated that in the long term buying SABMiller will generate cost savings of $1.4 billion.

Low production costs enable the global brewers to advertise on TV, posters and social media at prices smaller brewers cannot afford. While British national and regional brewers have to match supermarket prices with those of the globals, smaller independents can’t afford such low prices if they are to stay in business. As a result they have to confine their sales to specialist beer shops.  

Consumers will also have spotted that Goose Island has been rebranded Goose by AB InBev. What has happened to the brewery is an object lesson in the behaviour of global brewers when they buy smaller ones. Goose Island started out as a brewpub in Chicago in 1988 and later moved to a bigger brewery at Wrigley Field. In 2011 it was bought by Anheuser Busch, the American arm of AB InBev. The main beers – IPA, Honkers Ale and 312 Urban Wheat – are now brewed in a giant AB factory in Fort Collins, Colorado, and at two Labatts plants in Canada, also owned by the group, which has built what it calls a new ‘facility’ for the beers on the East Coast of the US.

The recipe for Goose IPA has changed. AB no longer imports Saaz hops from the Czech Republic as a result of the long-running trademark dispute between the American and Czech version of Budweiser. A different yeast culture is used as the original yeast wasn’t suitable for big batch brewing in conical vessels: yeast makes a vital contribution to beer flavour.

AB InBev has moved into others areas of the beer world. In June 2017 it was announced that ZX Ventures, a wholly-owned subsidiary of the global giant, had taken a substantial minority stake in RateBeer. This is an online scoring and rating system for beers that drinkers find useful and illuminating. The involvement by AB InBev caused such outrage that several leading craft breweries said they would no longer allow their beers to be tested by RateBeer. The breweries include Dogfish Head, Harpoon, Black Project Ales and Prison City in the US and the renowned brewer of Belgian lambic beers, Cantillon. The arrogance of the giant brewers can be seen from the response given by RateBeer when Black Project asked for its beers to be taken down: ‘Nope’.

In the UK in 2017 the online beer retailer Beer Hawk went into partnership with AB InBev. In a statement, Beer Hawk said it had ‘hooked up’ with the global group, which would bring a ‘new dimension to the scope’ of its work by bringing a new set of beers from ‘some of the best and toughest to source breweries on the planet’.  It will be interesting to see how Beer Hawks’ portfolio develops but expect to find some Brazilian beers on offer.

Big Beer not only seeks to dominate what we can drink but is also attempting to control the ingredients used to make beer. In June 2017, the German campaign group No Patents on Beer revealed that Carlsberg and Heineken had had patents granted to cover two strains of barley, with a third patent that will allow the two strains to be used together: the aim is to develop strains of barley with low levels of the type of enzymes that create a cardboard flavour in beer, a problem usually associated with lager brewing.

No Patents on Beer raised a petition to implore the European Patents Office in Munich to cease granting patents on beer ingredients on the grounds that beer and brewing have been in the public domain for thousands of years and should remain so.

First Big Beer buys up a swathe of independent breweries. Now it’s attempting to control the ingredients used to make beer. The power of the global behemoths is frightening and has to be resisted.

Mike Siegel of Goose Island Brewing Co writes:

In response to your article posted August 5th about Anchor brewery, you mentioned Goose Island, and there was some incorrect information that I would like to take the opportunity to correct (your words in italics): 

Consumers will also have spotted that Goose Island has been rebranded Goose by AB InBev. 

It is true that many of our bottle labels now say GOOSE at the top, but we are still Goose Island Beer Company.   We have our own Marketing department, and we make these decisions on our own behalf, ABI was not involved in this decision.   

What has happened to the brewery is an object lesson in the behaviour of global brewers when they buy smaller ones. Goose Island started out as a brewpub in Chicago in 1988 and later moved to a bigger brewery at Wrigley Field. 

1988 was indeed the original brewpub’s opening year, with the production brewery (where I work) opening in 1995 on the West Side of Chicago.   Both still exist.  There was a second brewpub near Wrigley Field from 1999-2015.  

In 2011 it was bought by Anheuser Busch, the American arm of AB InBev. The main beers – IPA, Honkers Ale and 312 Urban Wheat – are now brewed in a giant AB factory in Fort Collins, Colorado, and at two Labatts plants in Canada, also owned by the group, which has built what it calls a new ‘facility’ for the beers on the East Coast of the US. 

Goose IPA and 312 Urban Wheat are brewed at AB breweries in Fort Collins, CO for the western U.S., and Baldwinsville, NY for the eastern U.S., and for some export markets (including the UK).   We have always stated this on the labels for transparency. Honker’s Ale has been brewed at Baldwinsville, but it is currently being brewed in Chicago only, including export to the UK.   There is only one brewery in Canada making Goose beers, that is Montreal, and they are doing a fantastic job.    Now that we are exporting all over the world, our near term goal is to brew our best-selling beers closer to the place of consumption, so we are working on brewing in China, Mexico, Australia, and other countries, rather than export to them.   This, of course, will result in fresher beer in those markets.   

The recipe for Goose IPA has changed. AB no longer imports Saaz hops from the Czech Republic as a result of the long-running trademark dispute between the American and Czech version of Budweiser. 

The recipe has not changed.   Saaz hops were never a part of Goose Island India Pale Ale.    This is from Greg Hall, Brewmaster from 1991-2011.  It uses Pilgrim, Celeia, Cascade, and Centennial.   Greg did mention that Fuggles (replaced by Pilgrim as a bittering addition) and Styrian Goldings (by Celeia, in the whirlpool) were originally used, 20+ years ago, but I do believe your concern was in regards to changes made since the ABI acquisition in 2011.    For clarity, we do occasionally use Czech Saaz hops in other beers and have never been told to stop using them or any other raw material, for any reason, certainly nothing related to trademark disputes.   

A different yeast culture is used as the original yeast wasn’t suitable for big batch brewing in conical vessels: yeast makes a vital contribution to beer flavour. 

Goose Island continues to use the same yeast that it always has for the core beers: IPA, Honker’s Ale, 312 Urban Wheat, Bourbon County Stout, and many other beers (somewhat painstakingly, as it’s not an easy yeast to manage).   And we have always used conical fermenters, going back 29 years to the original brewpub vessels.    We use many other yeasts (Belgian, German, Czech, British) for new beers that we make, probably 10 or more a year, but again, our “house” yeast is most definitely the same.  

Thanks for allowing me the time and space to set the record straight.

Roger Protz comments:

I'm grateful to Mike Siegel for his response. When I included Goose Island IPA in my book 300 Beers to Try Before You Die (2005) I checked the recipe with the brewery. I do this as a matter of course -- you can't make them up or guess. I wrote: 

"The |Halls [the then owners of the brewery] don't stint on ingredients for their beers, using both North American and European malts, and Cascade and Mount Hood hops from the US, Czech Saaz and Styrian Goldings...Yeast strains are imported from Europe to ensure the correct aromas and flavours."

When I later wrote about the changes to the IPA's character, I spoke by phone with a member of the Goose Island brewing tream who told me the yeast culture had changed as the original one didn't work well in the tall cylindro-conicals at Labatts. The same informant told me the beer was brewed at two Labatt's breweries in Canada. I saw the fermenters at the Chicago brewpub, which were small. Yeast acts differently in tall cylindro-conicals. I recall visiting the Staropramen Brewery in Prague when it was owned by Bass. When Bass built a second brewhouse, the company installed identical fermenters to the 19th century originals and told me it didnt choose modern conicals as the yeast would work differently and faster, turning too much malt sugar into alcohol.