After brewing beer for an impressive 127 years, San Francisco's Anchor Brewing Company, often credited as America's first craft brewer, has announced it will cease operations and liquidate its assets due to prolonged declining sales.

The beer-maker, established in 1896, was purchased by Japanese brewing titan, Sapporo, in 2017. Despite their best efforts to resuscitate the fading brand, Sapporo declared their attempts unsuccessful.

Anchor Brewing Company, frequently dubbed the "godfather" of America's craft beer resurgence, has become an unfortunate casualty of changing industry dynamics and unforeseen global challenges.

Announcing the closure, Anchor Brewing spokesperson, Sam Singer, expressed the difficulty of this inevitable decision. He acknowledged Anchor's significant place in San Francisco's history and the craft brewing landscape. Still, he emphasized the impact of the pandemic, skyrocketing inflation, especially in San Francisco, and intense market competition, left them no choice but to shutter the business.

In a country once dominated by brewing heavyweights such as Miller and Anheuser-Busch, the craft brewing industry has seen a remarkable boom since the 1980s. Anchor Brewing Company, with its rich Gold Rush heritage, stood as a beacon for this renaissance.

Through the 1970s and 1980s, the brewery elevated its reputation beyond San Francisco, bolstered by support from an heir to the Maytag appliance fortune, and a memorable association with Arnold Schwarzenegger in the television drama, "The Streets of San Francisco".

A 2017 Eater profile recognized Anchor Brewing for offering a unique, "bubbly, malty, kind of bittersweet" beer—a flavorful respite from the pervasive "watery pilsners" that had monopolized the market for years. This unique taste originated from their 'steam' brewing style, one of the few indigenous brewing methods in the U.S.

However, despite its rich history and unique offerings, the brand faced increasing difficulties in recent years, especially with a significant portion of its sales coming from bars and restaurants.

According to Sapporo, the company's turnover dwindled from $12 million in the previous year to just $10 million last year, reflecting its diminishing fortunes. Despite investing in product revitalization and other initiatives, Sapporo couldn't mitigate the pandemic's devastating impact on the brand.

Sapporo indicated that the prolonged effects of the COVID-19 pandemic in the San Francisco region significantly impacted Anchor's sales. As a result, Sapporo is bracing for a ¥6bn ($43m) financial blow from the decision.

Although craft beers accounted for 13% of the total beer sales volume in the U.S. last year and approximately a quarter of sales by value according to the Brewers Association, the industry has faced mounting pressure due to the rising popularity of pre-packaged cocktails.

With overall beer sales in the U.S. dipping by 3% last year, and sales volume remaining largely stagnant for small, independent brewers, the brewing landscape has clearly been challenging.

In the wake of this announcement, Anchor Brewing, which employs around 60 people, expressed their ongoing search for a potential buyer. The company has halted brewing operations but will continue packaging and distributing its remaining stock in California until the end of July. Additionally, its local pub will temporarily stay open to liquidate the remaining inventory.