Behind the scenes at BrewDog

By Emily Sutherland contact

- Last updated on GMT

James Watt speaks to Equity for Punks investors at the 2016 AGM
James Watt speaks to Equity for Punks investors at the 2016 AGM

Related tags: Beer, James watt

BrewDog’s meteoritic success story has captured the beer industry – and the public’s – attention. Love them or hate them, the self-styled punk brewers rise to the top has been hard to ignore since it launched nine years ago in rural Scotland by co-founders James Watt and Martin Dickie.

In 2015, company revenue hit £45 million, (a figure Watt says would have been higher had the brewery been able to meet demand) it opened 16 new bars; six in the UK and 10 internationally and raised £600,000 in one weekend through its crowdfunding scheme Equity for Punks.

But not everyone is sold on BrewDog. Critics have questioned whether investors will ever see a return on their money and asked whether the fast-growing brewer, whose beers have gone mainstream and are now available in Tesco, Sainsbury’s and Wetherspoon’s, can still be calling itself craft.

Watt argues his concern is getting good beers to people and not how it gets there. “We’ve got no issues selling to anyone. We don’t want to be owned by these guys, but Carlsberg do some distribution for us - that’s a mean to an ends. We want to change perceptions and get the beer into the hands of as many as possible,” he said. “To do that we need to sell to Tesco, we need to sell to Sainsbury’s, we need to sell to distribution companies. All that does is facilitate more people getting their hands on our beers.”

watt.and.dickie

Making even more of that beer is a huge focus for BrewDog. Its Ellon-based brewery, built in 2013 with money raised through Equity for Punks, has been hamstringed by capacity. Unable to meet demand, BrewDog was forced to pull out of several export markets but the co-founders are hoping a recent £25m expansion will solve the problem.

“We took the decision two years ago, when we’d just sold 50,000 hectolitres, to invest to bring us up to a million HL. It’s proved a good decision as currently we’re so constrained by capacity. The site was working flat out but we were only able to fulfil 65% of orders.”

ellon.brewery

BrewDog might be prepared to sell its beer to the big guys, but it has been adamantly opposed to being owned by what it calls ‘monolithic purveyors of bland industrial beer’ since the early days. At its AGM (in BrewDog-speak short for ‘Annual General Mayhem’) last month, 6,000 of its Equity Punks voted to amend the company’s articles of association to prevent it ever being sold to a larger beer company. For Watt, staying independent is more important than ever, thanks to a recent rash of buyouts.

“We’re focused on independence, especially given what’s happened recently in the industry in the past six to 12 months with Meantime, Camden Town and Lagunitas. We believe independence is important to making fantastic beers. The intentions of big beer companies are absolutely clear. It’s bastardising and monetising, it’s not what we aspire to and it’s not how we want to do business.”

'American epicentre'

BrewDog is keen to expand in the US, having invested over $30m building a new brewery in Columbus, Ohio that will become the “epicentre” of its state-side operations. It’s a decision that - in typical fashion - Watt claims “we definitely didn’t overthink”.

BrewDog-the last year in numbers

Invests 30 million in its American brewery

Reaches number 10 in the Sunday Times​ Fast Track 100 companies

Profit increases by 48% to £17m

UK sales up 131%

He said: “We decided to build there after spending fewer than 24 hours in Columbus - it just had a good vibe. I was scouting different locations and every time I landed in a new place I’d send a message asking where to go for a good beer. I sent a tweet when I landed in Columbus and my phone just exploded, so we thought people here care about good beer, so let’s do it here.”

Considerably more thought has gone into making the brewer’s fast-growing chain of craft beer bars a success.

“It’s not easy, but it comes down to who we select to work with,” Watt said. “Everything we’ve done internationally has been partnership sites and they’ve all been awesome, but they’ve been awesome because we’ve taken so much time to choose people that have the experience in operating bars and understand how we do things. We’ve said no 50 times to a partner for every time we’ve said yes.”

Dog Eat Dog 

BrewDog put a rare foot wrong with hotdog and craft beer concept Dog Eat Dog at its London Islington site, which angered some fans after it closed unexpectedly just five months after opening last October. Watt says the site will reopen, but will drop the hotdog offer and instead work with local food pop-ups.

“It’s (Dog Eat Dog) hibernating at the moment. We always take on a lot of sites that don’t have a bar licence, so we took on that site thinking we would be able to change the licence and we couldn’t. We were forced to open a restaurant, which we’d never done before and it didn’t quite work. It’s going to come back but we’ll work with some of the best pop-ups in London, we’ll provide the beer and they’ll provide the food.”

BrewDog may have courted controversy in its time (previous stunts include dropping taxidermy cats from a helicopter and a poorly received video in which the co-founders pretended to be homeless), but a recent appearance by Watt on BBC ​TV series Who’s the Boss​  earlier this year  proved even more divisive.

Viewers branded the BrewDog co-founder ‘nasty’ ‘obnoxious’ and in one tweet that particularly sticks in his memory, said they’d rather drink Heineken following his appearance on the show, which sees bosses hand over power to staff to recruit a new manager. However, Watt argues he thought taking part would genuinely benefit the business.

“I said yes to Who’s the Boss​ because I thought it would be really good for the team to be involved with something like that, and when they sold it to me it sounded like an amazing concept. They told us we’d get three fantastic people but from the get go there was no way we could win. The candidates had poor skills, didn’t fit with our company and I always say to the team the most important decision we can make is who we add. I should have been smarter and seen what was happening sooner, but yes, Twitter was brutal the next day.”

Having left the craft beer market in a considerably healthier state than it found it, BrewDog is slowly starting to set its sights on the spirit market with its new Lone Wolf distillery. Supplies of its gin will be limited to its own bars initially but consumers have been misled by the recent boom in craft spirits according to fellow co-founder Dickie. 

long.wold

“Currently 95% of white spirits on the market don’t make their own base. All they’re doing is taking someone else’s cheap spirit, putting in some juniper and lemon peel, selling it a huge price and calling it craft. The main reason we started the distillery is because we hate that, calling something craft when it’s not,” he said. 

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