The holidays are almost here, but missing from this year’s season of light, hope, and travel delays will be Anchor Brewing Company’s Our Special Ale. First brewed in 1975, the iconic, beloved beer met an unceremonious end (in packaged form, at least) this past June at the hands of Sapporo USA (SUSA), then the parent firm of the San Francisco institution on Potrero Hill. Anchor itself would meet a similar end roughly a month later, when SUSA pulled its plug while gesturing vaguely at “macroeconomic headwinds.” The last beers rolled off its line in early August 2023, and the historic brewery has been quiet ever since.

As I’ve reported in this very column, things have been anything but quiet behind the scenes. SUSA handed Anchor off to an intermediary, known as an assignee for the benefit of creditors (ABC), to manage its liquidation. As the assignee, SierraConstellation Partners evaluated the assets and prepped them for sale, a cadre of former brewery employees hoping to buy the brewery and resurrect it as a worker-led cooperative blitzed through the logistical hurdles necessary to mount a proper bid in the anticipated auction. The group named itself the Anchor SF Cooperative (ASFC), secured legal representation, and raised over $100,000 on GoFundMe to cover the considerable administrative costs of launching a multimillion-dollar fundraising effort.

As Thanksgiving looms, these two storylines — the liquidation and former employees’ Hail Mary efforts to save it — will once again converge. On Wednesday, ASFC launched a WeFunder campaign with the goal of raising at least $2.5 million from rank-and-file investors, which Patrick Machel, the ASFC’s chairman, says will help position the outfit to make a competitive bid for the Anchor brand. And not a moment too soon: The investment bank managing its sale is soliciting “non-binding indications of interest” by Nov. 17. In other words, the bidding process is about to begin in earnest. Both Anchor’s future and workers’ long-shot bid hang in the balance.

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In its newsletter Tuesday, Brewbound reported on the offering, which is outlined in this pamphlet issued by Hilco Corporate Finance, the bank that’s been deputized by SierraConstellation Partners to run this part of the ABC process. As we’ve discussed, Anchor’s assets fall into three main buckets: the brand and intellectual property (IP), the real estate, and the machinery and equipment. “The Company will consider offers for all of the assets (allowing for a ‘status quo’ re-launch of operations), or for any individual asset or group of assets,” reads the pamphlet. “We are highly confident the brand will survive,” Teri Stratton, Hilco Corporate Finance senior managing director, tells Hop Take.

Just a day after that report, Anchor SF Cooperative launched their equity fundraising campaign on the WeFunder crowdfunding platform, as well as a website outlining the business plan they’d implement if they manage to pull off their longshot bid. Unlike the GoFundMe campaign, this one offers unaccredited retail investors (read: non-millionaire normies like you and me) an opportunity to purchase actual shares in the cooperative for $100 apiece. Anchor SF Cooperative’s board is comprised of five former brewery employees, including Machel and Dane Volek, the final brewmaster to make Steam Beer on Potrero Hill. The group’s business model calls for 40,000 barrels in its first year (roughly 25,000 fewer than Anchor’s 2022 volumes under SUSA), a tight, Bay Area-only distribution footprint, and 10 percent growth annually after year one. Returns on investment will come in the form of a 5 percent annual dividend, with a potential for a buyback after five years at the board’s discretion. As for the fundraising goal: “As much as we can possibly get,” Machel tells me in a phone interview, but “at least $2.5 million.”

That’s a staggering figure for a handful of brewery workers who are still learning the ropes of fundraising to scrape together, but it’s pocket change compared to the $85 million that SUSA paid for Anchor in 2017. Anchor’s primo real estate alone is currently priced to move at $40 million, according to an October report in the San Francisco Chronicle, and could fetch far more depending on how the auction unfolds. But the ASFC isn’t aiming to buy the land the brewery sits on, or the equipment within it, says Machel. “We’re guessing [$2.5 million] is the lowest number the IP is going to be sold for.” If they can raise that sum from small-dollar investors, their thinking goes, they’ll be able to attract bigger sums from deeper-pocketed ones, or leverage it to draw a bank loan — or both, to be as competitive as possible in securing Anchor’s recipes, trademarks, and branding. Bringing back the old label, which SUSA replaced in 2021 in a widely panned rebrand, is a top priority for the co-op. As is reinstituting Our Special Ale, says Machel. “That’s a ‘for sure.’”

If there were any justice in this cruel world, ASFC would have access to all the cash it needs to acquire Anchor outright and throw open its doors once again under workers’ stewardship. (No other former employees are involved in the co-op’s bid directly, Machel says, but the board is in communication with them about its progress. If successful, ASFC hopes to hire back any former colleagues who want a job as worker-owners.) More realistically, though, the co-op will have to team up with another bidder who’s got access to enough capital to buy Anchor’s physical property, or secure a lease on it from whoever eventually wins it at auction. “We don’t think we’re gonna get $40 million in such a quick turnaround time,” Machel says, laughing.

By focusing on Anchor’s intellectual property, ASFC believes it has the best shot at acquiring direct control over the future of America’s original craft beer brand. The brewery has moved around San Francisco a handful of times in its century-plus history, and if the co-op isn’t able to broker a deal with whoever winds up with the Potrero Hill property, it could move again. Moving it out of San Francisco, though, is out of the question, says Machel. “That’s a non-negotiable with the team we’re working with.”

The outpouring of support and angst over Anchor’s closing virtually ensures that there will be other bidders for all the assets listed in Hilco’s circular, very much including its intellectual property. Machel tells Hop Take that ASFC has had conversations with several of those interested parties to examine potential partnerships and compare notes, though he declines to name them. “Big players are going to come in [and bid on Anchor], ones that we already know about,” he says. There are also other bidders that have discussed equity crowdfunding components like the one ASFC is relying on (though as far as I know there are no other such campaigns currently running). Some may put in full offers on Nov. 17; others, like ASFC, will submit their “indications of interest” as they continue to line up investors, and hope Hilco doesn’t receive a bid that Anchor’s creditors feel is too good to pass up in the meantime.

On the clock and scrambling for cash is a nerve-wracking way to live, and the former workers at the center of this underdog effort have been doing it for months. But the ASFC’s pitch to would-be retail investors is two-fold, and completely unique. As former workers, they know best how to make San Francisco’s steam beer, and as future worker-owners, they can be trusted to ensure Anchor’s next chapter is written with the dignity deserving of one of America’s longest-running breweries.

The co-op’s investment materials are thoughtful, professional, and totally void of references to “white-space innovation,” “national scalability,” or any of the other things that get beverage-alcohol investors excited these days, which is sort of the point. The workers are hoping that their promise to slowly and steadily restore Anchor’s former glory resonates with patient investors who are content with a small, steady return from an ownership team hell-bent on protecting the Bay Area institution’s legacy.

“With the co-op, all of us have skin in the game, and we have way more to lose,” says Machel. “This is the biggest thing any of us have ever done in our lives.”

🤯 Hop-ocalypse Now

I’m not mad about this, I swear. But less than three years after Jim Koch, the eminently quotable co-founder and chairman of Boston Beer Co., sent a letter to beer trade groups warning that “For twenty years, spirits companies have eaten our lunch. … Let’s not let them eat our dinner,” the firm announced it would release yet another liquor-based offering. Sun Cruiser, a vodka iced tea, is slated to hit shelves in March 2024. It’s a smart move that should enable BBC to build on Twisted Tea’s dominance on the sugar-based side of the marketplace. But it gives lie to the idea advanced by Koch and other beer-industry honchos that fermented and distilled drinks are inherently different products, and never the twain should meet on level playing fields of taxation or accessibility. Right? Right?!

📈 Ups…

Heineken USA is putting up another $100 million to make 2024 the year super-premium Heineken Silver finds a lane… Next year should be “easier” than the past few for input costs, says the vexingly named craft beverage logistics firm Agrowgate… Congrats to the Brewers Association’s newly elected slate of board members… Applications are open for the Craft Maltsters Guild’s 2024 scholarship program…

📉 …and downs

Anheuser-Busch’s chief marketing officer in the U.S., Benoit Garbe, will resign at the end of December after just two years on the job, one of which was, well, y’know… A federal judge denied Olympic Eagle’s second effort to block Constellation Brands’ tone-setting move of its portfolio to another wholesaler… Constellation’s best idea beyond Mexican imports is Shyft, a “first-of-its-kind, patented, flavor-shifting” malt beverage (lolwut?)… Beer tax-paids for September 2023 look uuuuugly, man…

*Editor’s note: This piece has been updated to include a comment from Hilco Corporate Finance.

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