Chobani Founder Hamdi Ulukaya Has Purchased Anchor Brewing

Early this week I got what seemed like an unbelievable tip about a forthcoming announcement. A unexpected buyer was “purchasing Anchor.” Did that mean the brand rights? The expensive downtown San Francisco brewery? My tipster didn’t know. Well, now we do:

[Chobani founder Hamdi] Ulukaya’s pending purchase of the brewery was yesterday disclosed to officials at San Francisco City Hall. It is slated to be announced publicly this morning…. The 51-year-old Turkish-born Kurdish businessman has purportedly agreed to buy Anchor lock, stock and barrel, purchasing its square-block factory on Potrero Hill, its West German-made brewing equipment, and the brewery’s intellectual property. (Mission Local)

Less than a year ago, we learned the shocking—if not exactly surprising—news that Sapporo was shuttering the 127-year-old brewery they’d purchased just six years earlier. It seemed like the death rattle for a company whose main assets were the building and land in downtown San Francisco. They seemed literally too valuable for Sapporo not to sell, given that Anchor had collapsed as a beer brand. Who could afford to buy more than the brand?

Why?

This development is unexpected for a few reasons, but they all lead back to Hamdi Ulukaya. What did he see in Anchor that Sapporo overlooked? Why did he invest in an industry in which he has no professional (or even, it seems, recreational) interest? And mostly: why Ulukaya? He doesn’t live San Francisco and has no obvious connections to Anchor—or any brewery, for that matter. That makes this unusual, but it turns out Ulukaya is an unusual billionaire.

Hamdi Ulukaya comes from a humble background in eastern Türkiye. His Kurdish family owned a small dairy farm where they made cheese and yogurt. He came to the United States in 1994, and after bouncing around at different colleges for a several years ended up farming in upstate New York. In 2002 he opened his own feta cheese company, but it was only a break-even venture. Three years later, he learned of a recently-closed yogurt factory in South Edmeston, NY. That would be the start of Chobani and the company’s meteoric success.

This backstory and what came next are interesting, but are they relevant to Anchor? Possibly so. In 2019, Ulukaya told the story of that purchase and what it meant to him. See if you can identify any parallels:

“The factory was so old, the owners thought it was worthless. I thought they left a zero off, I couldn't believe the price. As I entered in, I stopped noticing things. All I could see were the people. There were 55 of them. Just quiet. Their only job was to break the plant apart and close it forever. I was met with a guy named Rich, the production manager. He offered to take me around, show me around. He didn't say much, but around every corner, he would point out some stories. Rich worked there for 20 years. His father made yogurt before him, and his grandfather made cream cheese before that.

“What hit me the hardest at that time was that this wasn't just an old factory. This was a time machine. This is where people built lives, they left for wars, they bragged about home runs and report cards….There was no anger, there were no tears. Just silence. With grace, they were closing this factory. I was so angry that the CEO was far away, in a tower or somewhere, looking at the spreadsheets and closing the factory. Spreadsheets are lazy. They don't tell you about people, they don't tell you about communities. But unfortunately, this is how too many business decisions are made today.”

“On my way back home, I called Mario, my lawyer, Mario. I said, ‘Mario, I want to buy this place.’ Mario said, ‘Hamdi, one of the largest food companies in the world is closing this place, and they're getting out of the yogurt business. Who the hell are you to make it work?’ I said, ‘You're right.’ But the next day, I called him again, and I said, ‘Mario, really, I really want to buy this place.’”

The quotes comes from a Ted Talk he gave in 2019, called “The Anti-CEO Playbook.” In that discussion, he discusses reorienting a business around the workers and their communities rather than quarterly profits and shareholder profit. He seems to have lived that vision, as well—at least if his Wikipedia entry is accurate. He’s invested in the communities in which his factories are located, pays good wages and offers generous benefits, and he even donated Chobani shares to workers in 2016. On top of that, he devotes a portion of his wealth (somewhere north of $2 billion) to philanthropic work. He seems like a genuinely great guy.

On the other hand, the old beer factory he just bought is different in key ways from the yogurt plant he bought 20 years ago. If he’s willing to dump a lot of money into Anchor in order to save it and, contra Sapporo, is willing to lose money for a long time, perhaps he can build the business up again. But that’s something he hasn’t had to do with Chobani. He found a market segment—strained yogurt—and became the industry leader. There is no such opportunity in beer.

He can afford to be a great boss at Chobani because of the company’s massive success. With Anchor, he’ll have to be a great boss in spite of the business—at least for the foreseeable future. In that Ted Talk, here’s his takeaway from his experience at Chobani:

“The new way of business: it's the consumer we report to, not to the corporate boards. You see, if you are right with your people, if you are right with your community, if you are right with your product, you will be more profitable, you will be more innovative, you will have more passionate people working for you and a community that supports you.”

It’s a wonderful sentiment, and I wish it were universally true. But we know a lot of great breweries that have collapsed despite the best intentions, the most characterful and interesting products, and customer goodwill. Indeed, that described the Anchor Sapporo bought in 2017.

But hey, I am all for billionaires buying historically important breweries as an act of cultural preservation. It’s a lot better use of funds than, say, buying a social media company for $44 billion. Fritz Maytag didn’t wait for Anchor’s owners to shut the company down when he bought it in 1965, but that was a similar nick-in-time salvation for this old treasure. Maybe in a decade or two Ulukaya will have saved Anchor from certain death for the second time in its long history. I hope so!