“I feel very sad, because I’m actually an old beer guy,” says Dan Leese, president and chief executive officer of San Francisco’s Hotaling & Co. “I started with Stroh’s brewery up in Detroit, back in 1981. I was sort of a beer industry junkie, a novice historian, and I always loved Anchor. So, I felt bad, but not nearly as bad as the people who came over from there. Yesterday there was a lot of chatter here about Anchor Brewing and what working there was like.”
By now, we all know that Anchor Brewing ceased production last week. It’s in the news everywhere from CNN to the New York Times — 127 years of tradition gone. The narrative is that the company began in 1896, was purchased in bankruptcy in 1965 by Fritz Maytag (the washing machine family scion), turned into the first “craft brewery” and then sold first in 2014, before being acquired by Sapporo in 2019.
But that isn’t the whole story, because Anchor was actually two companies: Anchor Brewing and Anchor Distilling. Anchor Brewing might have been the first “craft brewery,” but Anchor Distilling was the first “craft distillery” in the Bay Area, beginning operations in 1993. In 2019, when the brewery was turned over to Sapporo, Anchor Distilling was spun off (merging with Preiss Imports) and renamed Hotaling & Co.
“When the Griffin Group (Tony Foglio and that group) decided to sell Anchor Brewing to Sapporo they wanted to keep Anchor Distilling,” Leese says.
Renamed Hotaling & Co. after the famous San Francisco distilling family (for which Hotaling Place in San Francisco also gets its name, as does the ruin of the Hotaling Mansion in San Anselmo’s Sleepy Hollow neighborhood), they continue to produce the award-winning Old Potrero Single Malt whiskey and Junipero gin in San Francisco.
“Most in the industry would consider Bruce Joseph as the first master distiller of craft, and, of course, Bruce is still with us,” Leese says. “He is still our distiller.”
Joseph was recently awarded a Distinguished Service Award by DISCUS (the Distilled Spirits Council of the United States) at their annual gathering in Chicago. And Hotaling itself (as DISCUS’ smallest board member) was instrumental in getting the Tax and Trade Bureau (TTB) to finally codify the specific definition for American single malt whiskey just last July. Before, the definition for single malt American whiskey had been loosely defined, causing some confusion in the industry.
“Bruce was originally a brewer over there, and when Fritz wanted to start distilling and making craft spirits, Bruce moved over to be that master distiller,” Leese says.
Leese, a long-time alcohol industry veteran (and native Iowan, just like Fritz Maytag), says that in hindsight the writing was already on the wall for Anchor Brewing.
“When they pulled back to just California distribution, I thought business-wise that probably made sense, but it was just the precursor to shutting it down,” Leese says. “The signs were all there.”
Unionization for Anchor Brewing employees (the first ever for a “craft brewery”), declining sales and a pandemic all contributed to Sapporo pulling the plug on Anchor Brewing. There have been two things overlooked in most of the recent news coverage. One: Sapporo still owns the Anchor Brewing name and logo, as well as several large breweries throughout the U.S. and Canada. It could easily start up production somewhere else. Two: The closing of the brewery coincides almost directly with the end of that union contract, one which Sapporo had refused to renegotiate.
“They (the Griffin Group) had already made the distinction between those who were on the distilling side and those on the brewing side,” says Leese, who came on in 2019. “Nobody was let go, everyone who wanted to come over, did.”
Virtually the entire distilling team was kept intact. Anchor Distilling had been in the basement of the brewery on Potrero Hill, so when Sapporo took over, it had to move.
“We owned a long-term lease on Pier 50, which had been the old Distillery No. 209. In 2020, we kept Anchor Distilling and merged it with Preiss Imports to create Hotaling,” Leese says. “We are now a distiller and an importer.”
In stark contrast to the sad Anchor Brewing story, Hotaling & Co. is doing better than ever. Since 2019, their sales are up 125%, more than doubling. Last year, they began exporting to Canada (a first), shipped their first American whiskey to Australia this month and are opening up markets in Germany, Italy and France, with Japan slated for later on down the line. Hotaling now has 70 employees and is considering opening a tasting room separate from the distillery, which is behind Oracle Park and across the street from the Chase Center in San Francisco. There is also a new gin in the works, as well as some multiple barrel finishes for the Old Potrero.
“We really believe that Old Potrero, which is solidly positioned as a San Francisco product, will export extremely well,” Leese says. “Our research suggests there’s an opportunity there.”
Anchor Distilling had several experimental products, Old Tom Gin (the original ingredient in the Martinez, the precursor to the Martini), a Dutch-style jenever, apple brandy and several different whiskeys.
“We got rid of all of those,” Leese says. “We wanted to get very focused on our main products, Junipero gin and Old Potrero, and get the Potrero settled as a 6-year-old whiskey.”
Both original Anchor companies were innovative companies made in Fritz Maytag’s image. And of the two, only one still exists in San Francisco, albeit under a different name.
“We haven’t left, there’s still a great history that’s here,” Leese says. “Part of that tradition and history lives on with us.”
For more information, go to hotalingandco.com.