The Anchor way: ‘Big is not always better’

If you, like I, think fresh Anchor Liberty is still one of the best beers on earth then the announcement that Anchor Brewing has been sold makes a difference on a very personal level.

In terms of the Future of Craft Brewing overall? Not so much.

Not like it would have between 1965 and 1977, when Anchor accounted for 100 percent of sales of what we now call “craft beer.” In 1980 Anchor sold 81 percent of craft beer and still more than half of it in 1984, just before Jim Koch and Samuel Adams beer arrived. Five years later Koch’s Boston Beer Co., at the time contracting to have its beer brewed at struggling old-line breweries with excess capacity, vaulted past Anchor into the No. 1 spot.

Anchor production peaked at 108,000 barrels in 1996 and began to slip a bit by 1998, at which time it accounted for less than 2 percent of “craft” production. Today Anchor brews less than 5 percent of what Boston Beer makes and about 1 percent of the craft beer.

To be clear, Fritz Maytag and Anchor cast outsized shadows. Maytag’s place in history is, well, Maytag’s place in history. We can only guess what beer choices American beer drinkers would have today had he not saved Anchor Brewing in 1965. But whatever the new owners do — and as Jay Brooks writes this new stewardship begins somewhat oddly — it hardly seems likely any changes will reshape the craft beer landscape that Maytag shares great responsibility for creating in the first place.

I’ll leave it to others to speculate about that and to recount much of what Maytag, who remains as chairman emeritus, and everybody he worked with at Anchor accomplished. Instead I suggest considering something he didn’t do.

In 1992 Maytag investigated the possibility of a direct public offering to raise funds for expansion. At the time the five largest small breweries in the country were Boston Beer (273,000 barrels sold), Anchor (82,654), Sierra Nevada Brewing (68,039), Redhook Ale Brewery (49,000) and Pete’s Brewing (35,700).

Bo Burlingham provides the history in “Small Giants: Companies That Choose to Be Great Instead of Big,” writing, “Besides, the company would eventually have to move up to the next level. It was the natural order of things. Every business has to grow or it dies, right?”

Then Maytag changed his mind. “I realized we were doing the IPO out of desperation — because we thought we had to grow,” Burlingham quotes Maytag. “It occurred to me that you could have a small, prestigious, profitable business, and it would be all right . . . So we made the decision not to grow . . . This was not going to be a giant company — not on my watch.”

By 1996, when Anchor sales peaked, Boston Beer had grown to 1.2 million barrels a year. Pete’s Brewing, which also sold beer brewed under contract, rocketed to 425,600 (its top), while Sierra Nevada (265,000) and Redhook (224,578) both more than doubled Anchor.

Ten years later Maytag was interviewed by USA Today. “Big is not always better,” he said. “Small companies like ours can still knock ’em dead.”

25April2010: Beer linkorama

Before moving on to beer-related links here’s one about one of my favorite topics I try not to bore you with too often: the state of journalism.

The synopsis: 18 years ago a librarian penned a tongue in cheek “survey” about librarians and sex for a humor column in a library bulletin. Nearly two decades he’s retired and blogging. Blog readers suggest he publish the “survey” again. Now it’s being treated as new news (it is neither) by bloggers and more traditional media alike. Will Manley has stirred up craziness on many levels, and it seems to still be growing tentacles in the blog world, on Facebook and everywhere else. So here’s one of his questions:

Here’s what really blows my mind. The newspapers are following the lead of the bloggers in presenting this story. In other words professional journalists are getting their news from blogs that may or may not be reliable. Don’t they care that this survey was a tongue in cheek attempt at humor? Does this worry you about the news industry and journalists in general?

Back to (mostly) booze:

  • Bill at It’s Pub Night in Portland examines “The Bomber Price Penalty.” He doesn’t pull any punches, concluding “The fact that no other product is priced with a volume penalty instead of a volume discount leads me to believe that bomber pricing is simply a swindle.” He backs this up with numbers, comparing bomber prices to a six-pack equivalents.
  • And because Oregon has a beer blogging culture as rich as the beer scene Patrick at the Oregon Economics Blog riffs on Bill post by examining Beeronomics: Non-Linear Pricing. Put on your thinking cap and learn about high demanders (probably you when it comes to beer), low demanders and how high demanders may benefit from price discrimination.
  • Beer styles. Still in Oregon, Jon Abernathy examines indigenous American beer styles, linking to this from Mario Rubio and “600 Words About Beer Styles” by Brian Hunt of Moonlight Brewing in California.
  • Beer history. Ron Pattinson compares brewery output in in London and Vienna in 1865. “Of course, Vienna’s breweries were later overshadowed by those of Bohemia and Bavaria. Their role in the development of European brewing, in particular the spread of bottom-fermentation, has been largely forgotten. Much as the Viennese style of amber Lager has retreated into obscurity.”
  • More connecting the dots. Brewers on the continent, particularly in Belgium and even more particularly those who brew and blend lambics, often lament the growing appeal of sweet drinks. Yvan De Baets put it quite succinctly in Brew Like a Monk: “One of the main goals of Belgian brewers should be to fight against the Coca-Cola flavors and those kind of gadget tastes. We should be about cultural tastes, not animal tastes.” This link is a couple of months old — some items get bookmarked and not read for a while, sorry — but Salon gets right to the point in Sugar high: Why your food is getting sweeter. Bottom line: “Regardless of everything we have learned, however, our food just keeps getting sweeter and more sugary.”
  • Last Call: The Rise and Fall of Prohibition. This review calls Daniel Okrent’s book “the most persuasive and best-documented explanation as to why and how America decided to ban alcohol.” And you thought all he knew about was fantasy baseball.
  • For the record. The best place to be in America on Saturday was not Munster, Indiana. It was in New Orleans for Jazzfest. The festival continues next week, but getting a room will be a challenge because a big convention is also in town: it’s Digestive Disease Week. I imagine they chose New Orleans for the restaurants.
  • Beer magazines, circa 1994

    BeeR the MagazineInspired (again) by “The 5 Most Boring Topics in all of Beer Journalism” here’s a glimpse at what appeared in three magazines at the end of 1994.

    I picked 1994 because BeeR the Magazine was new (and not long for this world) and because many the breweries that claim a lot more ink (or bandwidth) these days than do the founding pioneers weren’t yet in business. Although they are deserving, I didn’t include brewspapers (such at Celebrator, Ale Street News and the Brewing News family) because our archives were destroyed in the Flood of ’06.

    All About Beer, BeeR and American Brewer were then the big three of glossy magazines. About the time BeeR died Beer Connoisseur I passed through town (lasting not even as long as BeeR). These days, of course, we have DRAFT, Beer Connoisseur (unrelated to V1.0), Beer Advocate and Beer Magazine, plus Imbibe offering regular beer features. You’ll spot many of these on the top row at Barnes & Noble or Borders, safely out of the reach of children. (American Brewer lives on, by the way. It always targeted the beer trade but in the 1990s also served information-thirsty beer newcomers.)

    ALL ABOUT BEER (November)

    Features
    * Born to Brew – A look inside the brewing dynasties.
    * Vietnamese Beers
    * Pubcrawling Toronto

    Columns
    * Michael Jackson’s Journal – Czechs & Balances.
    * Fred Eckhardt – Brewspeak: A Beginner’s Guide to Craft Beer.
    * Alan Eames – On Groaning Beer and Babies.
    * Byron Burch – Stylistically speaking, Oktoberfest.

    Departments
    These included news, homebrewing, Lucy Saunders on festival foods, collectibles, brewpub visits, book reviews and “Beer Talk.” The beers reviewed: Abita Amber, Labatt Blue, Purgatory Porter (it was spoiled), Redhook ESB, Berghoff Dark, Christoffel Blond, JJ Wainwright’s Select Lager, Red Tail Ale.

    BEER (November)
    That’s the cover at the top. BeeR was the brainchild of Bill Owens, who also published American Brewer. From the beginning Owens, himself a well known photographer, attracted very talented illustrators and photographers, although the magazine lasted only about a dozen issues.

    Table of Contents
    * A Question of Taste – A sensory exploration.
    * The Art Guys – Using beer stuff to create art.
    * The New Art of Ale – Randy Mosher on America’s innovative ales.
    * Smuggler’s Brews – Snagging a few pilsners in Iraq.
    * Garbage Pail Willie’s Last Great Batch – A story of homebrewed beer in Chicago.
    * Plastic, Fantastic Brewpub – Northwestern Brew-Pub & Cafe in Portland, Oregon.
    * Biere Au Naturel – Organic beer.
    * A Glass of Wendy – Written by Garrison Keillor (yes, that Garrison Keillor).
    * Proclaiming & Declaiming – Two Scottish musicians prefer stout.
    * Eat Me, I’m on Irish Time – Kelly’s Irish Times in Washington, D.C.
    * Das Münich Bierfest ist Goodt – Oktoberfest in Munich.
    * Germany’s Other Brewfest – Oktoberfest in Stuttgart.
    * Sing a Drinking Song – Beer at music festivals.
    * Europe on a Gallon a Day – Tips from Tim Webb.
    * A Really Cold One – Beer ice cream recipes.
    * Book Reviews
    * Michael Jackson – “On Meretricious Myths and the Sweet Taste of Truth.”
    * Homebrewing – Charlie Papazian.
    * Beer Festivals – Various reviews.

    AMERICAN BREWER

    Features
    * 1994’s Best Tap Handles
    * Financing on Tap – Tips for raising capital.
    * Reviving Cincinnati’s Brewing Heritage
    * Beer Engines in New England
    * Interview with Paul Shipman of Redhook. Headline “Dark Clouds Over Paradise.”
    * Rogue Ales in Japan
    * Star Union – An Illinois brewery reborn.
    * The Perennial Hop – In the American Northwest.
    * Music Festivals – A different story than in BeeR. Bill Owens sometimes asked writers to rework pieces to suit his two magazines.
    * Micro Goes Macro – Gordon Biersch.

    Departments
    Regular features included a column by Dick Cantwell (who still has a column in AB), a report on festivals, classified ads for brewing equipment, and BeerScopes (as stupid as the name implies).