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The Honolulu Advertiser
Posted on: Sunday, October 29, 2006

Anchor Brewing stays true to roots, rejects hypergrowth

By EDWARD IWATA
USA Today

Set in a warehouse area of San Francisco, Anchor Brewing makes several beers and ales. But it's a small company as breweries go, supported by founder Fritz Maytag and his 50 employees.

ADVERTISER LIBRARY PHOTO | April 8, 2006

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SAN FRANCISCO In an era of conglomerates and billiondollar bottom lines, Anchor Brewing and founder Fritz Maytag are refreshing throwbacks to a simpler time.

While Wal-Mart, Google and Starbucks storm the world economy, Maytag and his 50 employees shun hypergrowth and global mass markets. They've purposefully kept their company small, rejecting mergers and public offerings.

Why? Because they don't want to lose sight of Anchor's founding philosophy: to make high-quality "craft" beers, the strongly flavored suds made the old-fashioned way from malted grains.

"Big is not always better," Maytag says. "Small companies like ours can still knock 'em dead."

While many executives speak in business jargon, the tall, courtly Maytag sounds like a scholar. Whether discussing the history of brewing or the history of Anchor, he uses words such as "imagination," "grand adventure" and "the utter joy of running a small business."

His business mantras and practices are simple: Take pride in your work. Don't grow beyond your company's means. Treat and pay employees well, even after they've retired. Create a collaborative atmosphere. Give generously to schools, libraries and other neighborhood nonprofits.

Sitting in a hilly, industrial part of San Francisco, the three-floor Anchor brewery resembles a cavernous museum. Century-old photos of San Francisco grace the walls. The building is filled with the sweet, gingerlike aroma of fermentation. Workers check on the brew in gleaming copper pots and vats.

Anchor and 1,400 other small craft breweries and microbreweries make up only 5 percent of the $80 billion beer market in the U.S., says the Brewers Association trade group in Boulder, Colo.

Nonetheless, many beer lovers swear by craft beers, which typically boast fuller flavors, aroma and color than mass-produced beers. In the tradition of European master brewers, the U.S. brewers make different styles of craft beer from air-dried hop flowers, specialty yeasts and malted barley, wheat or rye.

Master brewers such as Maytag, Jack McAuliffe of the old New Albion Brewery and others in Northern California launched the craft beer industry in the 1970s and 1980s.

COMMANDING RESPECT

"Fritz is an icon whose name and brewery are extremely well-known in the industry," says Charlie Bamforth, chairman of the food-science department at the University of California, Davis and author of "Beer: Tap into the Art and Science of Brewing." "A lot of people respect what he's accomplished."

An Iowa native, the 68-year-old Maytag an heir to the Maytag washing machine family moved West in the late 1950s to study English literature and Japanese at Stanford University. After college, he traveled and hung out in San Francisco's North Beach neighborhood during the Beat literary era.

While wondering what to do with his life, Maytag heard that a small brewery in town was going bankrupt. Founded in the late 1800s, it was in a run-down building filled with creaky machinery and stale-smelling beer. "I bought it for a token," he says.

Through years of trial and error, Maytag learned to brew a unique Anchor ale and lager. Rivals poked fun at his funny local beer and company, which initially made only hundreds of barrels of beer a year.

BEER DRINKERS HOOKED

But beer drinkers fell in love with Anchor brews, including the company's signature Anchor Steam Beer, a rich-flavored amber drink.

The privately held Anchor turned a profit in the mid-1970s and has grown slowly each year. Maytag doesn't disclose financial figures, saying only, "If a company can make 10 percent after taxes on its sales, that is a fabulous profit."

Rival beermakers have expressed interest in buying Anchor over the years, but Maytag has politely turned them down.

In the early 1990s, when the nationwide demand for Anchor beer was growing at a torrid pace, Maytag almost went public to sell Anchor shares. But he and his employees feared that expansion would hurt their beer's quality and the special workplace culture they had built.

After much soul searching, they abandoned the public offering.

"We realized we didn't have to sell out and bring in new investors and capital," Maytag says.

A RARE COMPANY

Bo Burlingham, an Inc. magazine editor and author of "Small Giants: Companies That Choose to Be Great Instead of Big," says that Anchor is a rare company with real character and "corporate mojo the business equivalent of charisma."

Burlingham says: "As soon as you set foot inside Anchor Brewing, you realize something different is going on. You can see it, feel it. Everyone wants to be associated with that business."