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After Deal To Sell Off Its Brewing Arm, Anchor Distilling Is Now A Stand-Alone Spirits Company

August 4, 2017

Yesterday, SND reported that Japan’s Sapporo Holdings Ltd. had acquired San Francisco-based Anchor Brewing Company. The deal leaves Anchor’s spirits side, Anchor Distilling, as an independent, stand-alone company.

Anchor Distilling will remain under the ownership of Tony Foglio and Keith Greggor and will continue to be led by current president and CEO Dennis Carr. The transaction, whose price-tag is $85 million, is expected to close on August 31.

For now, Anchor Distilling will continue operating out of the San Francisco facility it shares with Anchor Brewing, but Foglio tells SND that his company will be relocating. “We’re going to move out of the building, but we’ll stay in San Francisco,” he says. “We’re going to do a distillery and a new visitor center.” Foglio adds that Anchor Distilling plans to keep its existing equipment when it moves to the new site.

The Anchor Distilling portfolio includes a mix of owned brands, such as Old Potrero American whiskey and Junipero gin, and agency brands including Kavalan whisky, Nikka whisky, Luxardo liqueur and Hine Cognac, among numerous others. Impact Databank estimates Anchor Distilling’s total U.S. volume at around 233,000 nine-liter cases.

Anchor Brewing, meanwhile, is best known for its flagship Anchor Steam Beer and sells roughly 1.9 million cases in the U.S., according to Impact Databank. Its annual sales are about $33 million, according to Sapporo. After the deal closes, Sapporo plans to invest in Anchor Brewing’s operations and support the upcoming opening of a public Anchor Brewing taproom, as well as introduce the brand to new international markets.

The Anchor Brewing acquisition comes amid a flurry of foreign M&A activity within the U.S. craft beer market. Late last year, Japan’s Kirin Group took a 24.5% stake in Brooklyn Brewery, with Kirin pledging to support its growth and the pair partnering on a joint marketing venture in Japan as well. Likewise, Heineken gained full ownership of Lagunitas Brewing Co. in May, acquiring the 50% stake in the California brewer it didn’t already own and providing Lagunitas with a path to international expansion.

These deals have occurred as the U.S. craft beer category—which until 2016 had enjoyed years of double-digit progress—is in the midst of a slowdown, leading some brewers to eye growth potential overseas. A recent forecast from Goldman Sachs predicts that U.S. craft beer growth will decelerate to a 2.5% gain for 2017, versus a 5.1% increase the year prior.—Christina Jelski

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