Robert Brown|Craft beer pioneer Anchor Brewing to close after 127 years

Anchor Brewing Co. is set to pour its last cold one. The 127-year-old San Francisco brewery, which traces its roots to the California Gold Rush, said it will shut down after years of declining sales.

Anchor was trailblazer in the U.S., brewing craft beers in the 1970s when most Americans were loyal to a handful of major brands. Its unique brewing techniques ignited demand beyond the city borders of San Francisco and it quickly became a sought-after prize by beer geeks everywhere.

In recent years, however, brewers have faced increasing difficulty turning a profit with a proliferation of canned cocktails, crafted drinks, spirits and wines dinging beer sales. Lockdowns during the COVID-19 pandemic pressured brewers further.

Last year, overall beer sales volume slid 3.1% in the U.S., according to the Brewers Association. Craft brewer sales volume ticked 0.1% higher during the period, but imports are rising.

"We recognize the importance and historic significance of Anchor to San Francisco and to the craft brewing industry, but the impacts of the pandemic, inflation, especially in San Francisco, and a highly competitive market left the company with no option but to make this sad decision to cease operations," said brewery spokesperson Sam Singer in a written statement Wednesday.

"Everyone knows Anchor Steam"

Based in the Potrero Hill neighborhood, Anchor Brewing describes itself as the nation's first craft brewery. It was acquired by Sapporo USA in 2017.

"Even before I lived in California, everyone knows Anchor Steam, so it's sort of an American institution and it seems like a shame if that goes away," Kris Leifur, a regular patron at Anchor Public Taps on De Haro Street, told CBS News Bay Area. 

Anchor Brewing had teetered near insolvency before and in the 1960s it was acquired by a Stanford University grad, Fritz Maytag. Maytag implemented new brewing practices such as dry hopping, and began bottling the beer in 1971, according to the brewer.

By the mid 1970s Anchor Brewing had assembled a solid portfolio of respected brews including Anchor Porter, Liberty Ale, Old Foghorn Barleywine Ale, and its first annual Christmas Ale, which became a holiday tradition in locales far from San Francisco.

Jeff Alworth, author of The Beer Bible, said in a blog post Wednesday that Maytag "sparked a revival in small-scale brewing" that would transform the industry and give the emerging craft brewing industry its ethos and attitude.

"He had this approach to beer, which was, 'We're going to use traditional ingredients and we're going to use traditional methods and we're going to be defiant as we do it and we're going to be hyper-local,'" Alworth said. "It served as a blueprint."

Anchor said that it made repeated efforts over the past year to find buyers for the brewery and its brands, but that it was unable to find one. The company said that it is still possible that a buyer will come forward as part of the liquidation process.

Anchor recently announced that it would limit sales of its beers to California and that it would cut production of its Anchor Christmas Ale in an effort to cut costs. The company has stopped brewing and will continue packaging and distributing the beer on hand while available through around the end of the month.

"The fact that they're not going to make these beers anymore is just insane to me, if that happens, I will be devastated," Leifer told CBS News Bay Area. "Going to need to build a vault and start stockpiling."

The brewer is giving employees a 60-day notice and plans to provide transition support and separation packages.

"Anchor has invested great passion and significant resources into the company," Singer said. "Unfortunately, today's economic pressures have made the business no longer sustainable, and we had to make the heartbreaking decision to cease operations."

Anchor Public Taps will remain open to sell what inventory remains, including a small batch of 2023 Anchor Christmas Ale. The batch was brewed prior to the company's decision to cancel the nationwide release.

In:
• COVID-19 Pandemic
• San Francisco