The oldest craft brewery in the United States is shutting down after 127 years

Pour one out for Anchor Brewing: America's oldest craft brewer is shutting down after 127 years in business.

The San Francisco-based company announced Wednesday it's ceasing operations and liquidating the beloved business "following a combination of challenging economic factors and declining sales since 2016," a press release said. Craft brewers, in particular, have been struggling for a variety of reasons including changing consumer habits, rising costs and lingering supply-chain challenges.

Another problem has been Sapporo, the Japanese beer company that bought the brand in 2017. Employees complained to VinePair last month about Sapporo's alleged mismanagement and lack of understanding of craft beer in the US. In addition, a 2021 rebrand of Anchor was also criticized for pivoting too far away from the brand's classic look.

"This was an extremely difficult decision that Anchor reached only after many months of careful evaluation," said Anchor Brewing spokesperson Sam Singer. He added that the "impacts of the pandemic, inflation, especially in San Francisco, and a highly competitive market left the company with no option but to make this sad decision to cease operations."

Workers at Anchor, which employs 61 people, were given a legally mandated 60-day notice Wednesday and will receive "transition support and separation packages." Brewing has stopped immediately and beer on hand will still be sold through the end of July.

Last month, Anchor cut national distribution, limiting its sales to just California, and announced it was ending production of its fan-favorite Christmas Ale after nearly 50 years in production. (A "small volume" of its Christmas Ale is now being sold at its tap houses until it runs out.)

Anchor said that those decisions were made to "reduce costs while final attempts were made to evaluate all possible outcomes," however, "in the end, expenses simply continued to outstrip revenues, leaving the company with no other viable choice."

Sapporo has made "repeated efforts" over the last year to sell the business, Anchor said. But those efforts have failed, though Anchor did say it's "possible that a buyer will step forward for the brewery as part of the liquidation process."

Anchor got its start in 1896 in San Francisco, becoming the nation's first-ever craft brewery. Fritz Maytag, a descendent of the Maytag Corporation, bought Anchor in 1965 when it was on the verge of bankruptcy and helped usher in the craft beer industry in the US. Its most notable brew was Steam Beer, a pale ale.

Under Sapporo's ownership, production of Anchor's beer has largely declined every year (except in 2021), according to the Brewers Association. Brewbound, a beer industry website, previously reported that Sapporo's recent purchase of craft brewer Stone Brewing sparked concerns among Anchor's employees of how their brewery fits into Sapporo's plans.

Sapporo didn't respond to a request for comment.

The state of craft breweries hasn't improved this year. NIQ data given to Craft Business Daily showed the category's sales are down nearly 4% year to date and volume is down more than 7%, showing that "craft has had a tough start to 2023," the publication said.

"This is a sad day in the history of craft brewing in America," Harry Schuhmacher, Craft Business Daily's publisher told CNN. "I know Fritz must be heartbroken. He literally nurtured that brewery from insolvency in the 60s to becoming San Francisco's hometown beer and symbolic of America's craft beer resurgence."

Anchor's closure "highlights the sustained economic headwinds" facing craft brewers, Brian Crawford, CEO of the Beer Institute, told CNN. "Between unnecessary and harmful tariffs imposed on aluminum, to continued supply chain disruptions, to dubious tax loopholes for hard liquor products, the beer industry faces significant challenges."