News Reactions: Chobani Founder Buys Anchor Brewing
Anchor Brewing finally has its new owner. After a long drawn out bidding process that was supposed to end in January, the new owner revealed himself today on LinkedIn. His name Hamdi Ulukaya, a Turkish billionaire and founder of Chobani. He also more recently became the majority owner of La Colombe Coffee Roasters. I’m going to share what I like about the news, what I don’t like, and a few things I would do if I were him.
What I Liked 👍
I like that Anchor Brewing is now in the hands of a made person, purchased through a Family Office. That doesn’t mean he’s doing this for charity, but it likely means he’s not in a rush to profit off the purchase. I worked for a very large Family Office for 8 years and their money is very patient compared to say, Private Equity. That’s the exact mentality that it will take for Anchor to orchestrate a turnaround given all the beer brands they’re up against and the off-trend styles they are known for.
Secondly, there’s just a lot to like about the guy himself and the story behind his resurrection of the yogurt factory in upstate New York that was left for dead, turning it into Chobani. He’s got the long term approach needed here, illustrated by his giving of 10% of Chobani’s ownership to his employees in 2016. Make your employees act like owners, by actually making them owners and giving them the opportunity to generate wealth via retention. Want to fall more in love with the guy? Thank you for coming to his Ted Talk 👇
What I love ♥️
I love that the $40M San Francisco land and production brewery were included in the purchase, versus just acquiring the IP and brewing the beer elsewhere. For Anchor to regain/remain it’s status as a San Francisco icon, it had to be made there. I was worried that this land would be bulldozed and turned into fancy condos and am very thankful that the brewery’s soul remains in tact.
I’m personally not sure how you run a brewery like Anchor in a city as expensive as San Francisco, pay your people the proper living wage, and compete on price with brands like Sierra Nevada made much more cost effectively up north in Chico. Perhaps a much higher % of sales in the future needs to come from direct sales and through hyper local distribution. More on that below…
What I Did Not Like 😒
Beggars can’t be choosers, but if I had to mention a negative, I didn’t love hearing that Hamdi essentially learned about Anchor Brewing at the time is closed down and became available to purchase. I do appreciate his love of San Francisco and belief in it’s future. I like that he fell in love with the story and that turning around a brewery and brand left for dead by Sapporo is right up his alley. There’s a lot of work to do and challenges to overcome, so I wish his connection to Anchor Brewing was a little more personal.
For example, it’s personal to me because I dated my wife long distance for years, traveling to San Francisco every 6 weeks on average to see her. Anchor was that beer that I associated with my visits between 2007-2010. So when we got married in Golden Gate Park in 2012, Anchor Steam was the beer that we proudly served our guests. There’s MUCH stronger stories out there from those native to the Bay Area and I didn’t have $40M+ lying around, which was the asking price of the property. I’m guessing they settled on a price in that ballpark for both the land, building, and IP but that’s just a guess.
What Would I Do? 🤔
Inch Your Way Back - Anchor became a small fraction of it’s size before being closed down in 2023 where it had brewed 15,000 BBLs before shutting down mid Summer. To ever climb back over 100,000 BBLs I’d be sure to not try to get it all back in 1 year, or even 3-5 years, because it’s just not going to happen with the styles of beer they’re known for. Do it slowly so that the growth is sustainable.
Stay in California - Ideally just the Bay Area, for a long time. Before their final attempt to find a buyer last Summer, all distribution was pulled back to California to simply everything. Keep it that way, focus on the backyard, give the brand some allure again.
Find a Focus - Go hard in one particular area as far as sales focus, for example, making it a goal to be on draft in every San Francisco restaurant. Re-establish the brand in the on-premise, on draft, while reestablishing that sense of pride. Kegs are also much more profitable given the concerns I mentioned above.
Make Employees Owners - There’s no more perfect time to establish an Employee Stock Ownership Plan (ESOP) then when there’s opportunity to grow and pass down wealth to your employees. Take the strategy at Chobani and, not immediately of course, but give a piece of the company back to the people who will make it run while there’s still plenty of meat on the bone.
Packaging - Take every record of this rebranded packaging, permanently delete every file and burn any remaining labels and boxes. Wipe away it’s existence and bring back the original labels
I am very long on beer, but believe in many cases it just needs fresh eyes and fresh leadership. That’s exactly what it about to happen in San Francisco. Long live Anchor Brewing
I’d be looking hard at growing a network or small scale brew pubs in Northern California to 1) create brand homes that reestablish what Anchor stands for, 2) grow associations outside of Steam and Christmas, and 3) benefit from on-premise margins and drive package sales.
Good points as per usual. Perhaps the focus on home will work. But NorCal is a very saturated, very challenging market with numerous highly credentialed local brands attempting the same strategy. Suspect the local chains will give the brand another shot, but distributor network there will be tough and crucial to success. Perhaps the glory days of Anchor Steam are sufficiently far in the past that the next generation of drinkers will discover it as their own as something other than a legacy brand. As mentioned how one competes with such a high cost facility operating far below its capacity has to be troubling. All that being said a rich, accomplished, passionate billionaire as the new owner is far from the worst outcome. Big tell will be who he hires to run things. Are you looking to move back? :)