S.F.’s Anchor Brewing eyes a cooperative future

Good morning, and welcome to the Essential California newsletter. It’s Friday, Aug. 4.

Normally, Wednesday nights at 6:30 are busy at Anchor Taps in San Francisco’s Potrero Hill neighborhood. Trivia teams start arriving 30 minutes in advance to grab their spot among the tables.

But when I arrived on the evening of July 12, passersby snapped photos of a notice on the fences: “Closed Today.”

Anchor’s owner, Sapporo Holdings Ltd., had announced the company’s closure, citing declining sales, the lingering effects of the pandemic and inflation. Employees took that Wednesday day off to recuperate. The closing of Anchor Brewing in San Francisco came as a shock to many.

“It’s like a successful brand. That’s what I don’t get,” said Eli Wopat, a regular trivia goer.

Founded as America’s first craft brewery in 1896, Anchor Brewing survived many disasters: the 1906 San Francisco earthquake, 1920s nationwide Prohibition and a fire that burned down its building in 1933. The brewery changed ownership in 1965 and was acquired by Japan’s Sapporo in 2017.

As the recipes and other assets are liquidated this month, people can now bid for ownership. A group of former employees is also looking toward its next phase: building a worker’s co-op.

What is a worker’s co-op?

A worker cooperative is a business that is owned and governed by and for the benefit of the employees. Through a worker co-op, employees make the decisions and have access to benefits including profit sharing.

Currently, Anchor Brewing is entering a process known as the assignment for the benefit of creditors (ABC). Dozens of investors have come forward expressing interest. Anchor’s former employees will need to successfully align with investors in a bid for the assets.

Part of the motivation for more than 30 former Anchor Union members to shift to a co-op model is to claim ownership of a brand and product to which they’ve devoted their time. They have a wide range of experiences: from production to cellar work, forklift driving and machine operation. The group includes lab technicians, brewers, barbacks and tour guides.

“Breweries by design are collaborative,” said Patrick Machel, a former packaging lead and shop steward for Anchor Public Taps. He cited the brewery’s recent vintage-to-modern rebrand as one of the decisions that many employees had opposed. “With a corporation, you can’t really be collaborative. It’s a top-down kind of structure. We just want control over what’s happening. We want transparency.”

I spoke with Alison Lingane, co-founder of Project Equity, a nonprofit dedicated to providing aid to businesses transitioning into a worker cooperative model. Project Equity is working with the former Anchor Brewing employees.

“It’s not every day a multinational corporation is getting rid of a unit,” Lingane said. “If it had been sold to employees [back in 2017], I think it would be in a very different place today.”

Buying Anchor’s assets is only the first step. Workers will also have to figure out what employee ownership will look like for them.

Anchor would not be the first brewery to seek a member-owned patronage model. Black Star in Austin, Texas, and Fair State in Minneapolis are both consumer cooperatives. Although the ownership is different, questions about culture and process remain the same.

“Governance can get very complicated and thorny and difficult,” said Evan Sallee, chief executive of Fair State, which was established more than nine years ago. A democratic system “can be a lot more churn, a lot more different ideas coming to the forefront.”

Another challenge is awareness. “It’s not in the normal business lexicon or taught in business school,” Lingane said.

Sallee said a lot of state and federal business programs are not written with cooperatives in mind.

The California Employee Ownership Act went into effect this year, establishing a hub at the governor’s office to support companies that are pursuing worker-owned business models. The employee ownership movement is growing across the country.

The money and the cultural foundations for a co-op

The employee effort to buy Anchor has seen support from a wide range of sources, including locals and other breweries. According to former employees, more than five breweries have reached out to the Anchor Union Instagram account to propose what are known as “solidarity ales” — different beers sold to raise proceeds that will in part go toward the union and its attempts buy the assets.

Pedro Mancilla, a former Anchor tour guide, spent Wednesday, his first day unemployed, helping with the solidarity ale brewing process. The idea behind the recipe came from his extensive knowledge working with local historian Dave Burkhart as well as access to former Anchor owner Fritz Maytag’s personal library archives.

“We always talked about what Steam beer would look like before Prohibition,” Mancilla said. Instead of malted barley, they’re using corn. He hopes that over the next few months, people will come to the Bay Area to try these new ales.

For generations, San Franciscans and people elsewhere in the Bay Area grew up drinking Anchor Steam. Mancilla was no different. His dad and grandfather drank Anchor Steam beer before he got his start at Anchor six years ago, washing kegs.

“We need that positive energy, sense of community right now. And everyone in the Bay Area, they’ve all been super receptive,” Mancilla said. The relationship between a cooperative and the community will also be a factor in its success.

“The way [Anchor] has survived is [because] it has passed down the knowledge from one generation to the next,” Lingane said. “[If] they know what it takes and they’re in the position to make those business decisions, the chance of success is greatly boosted.”

As the grains ferment, Anchor Union members and San Franciscans hope they can preserve this culture of support and legacy that’s prevailed for generations.

“And then if it fails, it’s on all of us, you know?” Machel said.

And now, here’s what’s happening across California:

Note: Some of the sites we link to may limit the number of stories you can access without subscribing.

L.A. STORIES

Hotel strikes hit the LAX area as Taylor Swift arrived. Here is what you need to know if you’re heading to SoFi. Los Angeles Times

Chatworth’s beloved Pacific Theatres in the San Fernando Valley will be turned into a Tesla service center. One resident walks down memory lane. LAist

POLITICS AND GOVERNMENT

Former President Trump pleaded not guilty Thursday to four federal charges in connection with accusations that he engaged in a multi-part conspiracy to overturn the will of voters in the 2020 election. Los Angeles Times

Another strike? Some of California’s highest-paid public employees are ready to walk out amid an intensifying labor battle with Gov. Gavin Newsom’s administration. They argue that staffing shortages at state prisons and hospitals are endangering them and their patients. CalMatters

CRIME, COURTS AND POLICING

The Biden administration will expand a program that places families who cross the border without authorization under a home curfew. This will affect migrant families in San Francisco, San Diego and San Jose. Los Angeles Times

HEALTH AND THE ENVIRONMENT

Environmental advocates are trying to enshrine a state law called Measure Z, banning new gas and oil wells near homes, schools and hospitals. At the same time, the California Supreme Court just ruled that Monterey County cannot enforce the ban. Here’s what voters could decide on the November 2024 ballot. Associated Press

Across Los Angeles, the county has tried to reimagine a new system aiding vulnerable residents — one that relies less heavily on law enforcement. What can be done? Tune in Aug. 9 to a talk moderated by Los Angeles Times’ staff writer Lila Seidman. Register here.

CALIFORNIA CULTURE

Despite the continuing actors strikes, some independent film projects are getting the greenlight for production via interim agreements with producers. Their cast lists include A-list celebrities, sparking allegations of favoritism and spurring debate about whether the deals have helped or hindered the actors’ cause. Los Angeles Times

AND FINALLY

Today’s California landmark is from Marta Spargur of Arroyo Grande, Calif.: Antelope Valley. We’ve featured this landmark before, but Marta’s photo was too delightful not to share.

A dog jumps through an Antelope Valley poppy field.

(Marta Spargur)

Marta writes:

What are California’s essential landmarks? Fill out this form to send us your photos of a special spot in California — natural or human-made. Tell us why it’s interesting and what makes it a symbol of life in the Golden State. Please be sure to include only photos taken directly by you. Your submission could be featured in a future edition of the newsletter.

Please let us know what we can do to make this newsletter more useful to you. Send comments to essentialcalifornia@latimes.com.