Speaking to The Morning Advertiser (The MA), Tilray CEO Irwin Simon said BrewDog had spent its first six months under new ownership building “foundations” and was now turning its attention to winning back taps.
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But the brewer could no longer rely on the BrewDog name alone to secure space on the bar, he admitted: “They don’t need us, but why should they have us?”
“If you want to make a hockey team, you got to earn that spot,” Simon continued.
In addition, Tilray president of international operations Rajnish Ohri noted the business had previously lacked the resources needed to win business outside its own bar estate, which had also made BrewDog a competitor to some of the operators it wanted to supply.
The brewer has since put a sales force with “feet on the street” around the country, with around 175 listings secured in pubs since March, 75% of which were new customers.
Ohri told said new taps were being won every day, with BrewDog now targeting greater representation across some of the UK’s largest pub estates.
Pointing to groups including JD Wetherspoon and Stonegate, he told The MA the brewer wanted to work with major operators across the sector.
“We are definitely moving in that direction,” Ohri added.
Service levels had also reached 96% to 97%, he said, adding BrewDog was focused on rebuilding trust with operators through more reliable supply.
The on-trade push comes after six months of overhauling the business, with Simon stating Tilray “went in with mining hats on” to uncover the problems it had inherited.
Understanding issues
Tilray acquired the BrewDog brand and certain strategic assets for £33m earlier this year and has since invested around £50m into the business.
Simon added Tilray examined “every aspect” of BrewDog, including its finances, computer systems, quality, plants and distribution.
“We looked at it from every which way [to] understand where the issues were,” he continued.
The CEO also accepted there had been problems around the quality and taste of some BrewDog beers, alongside shelf-life issues, before the takeover.
Simon said Tilray had moved quickly to tackle the problems rather than spending months assessing the business.
“We didn’t put our toe in the water,” he added. “We jumped in, and it was cold water.”
Work has since focused on operating procedures, cleanliness and engineering, alongside securing fresher hops.
However, Simon stressed quality would not be sacrificed in an attempt to compete on price.
“Anybody can [make and] sell a pint at $2, but then what does it taste like?
“There are price ceilings on everything, and nobody is paying $14 for a pint of beer.
“What I want to do, and what I always wanted to do, was to make brewpubs that are affordable,” he continued.
“I don’t want to be the most expensive but I want to be able to be perceived as a quality, value brand.”
Instead, he said BrewDog would look for manufacturing efficiencies to keep its beer affordable.
Right locations
Alongside winning back taps in other operators’ pubs, BrewDog is also eyeing selective expansion of its own UK bar estate.
Simon told The MA the focus would be on the “right locations”, with future sites needing to be profitable and work for their communities, while smaller venues could also form part of the strategy.
“You could have 500 people in [Waterloo or Tower Hill] and it looks empty,” he said.
Food and activities could also play a greater role, with bowling, darts and simulators among the options discussed.
“We want our [BrewDog] pubs to be profitable,” Simon added, stating the business was “not here just [to] open up and lose money either.”
The turnaround comes against the backdrop of £207m in unsecured creditor claims previously reported against BrewDog Retail Limited, with insufficient funds available for a distribution to unsecured creditors.
The liabilities relate to the former business and were not assumed by Tilray as part of its acquisition.
Asked whether Tilray had a “moral responsibility” towards businesses that had lost money, Simon argued its money was better spent rebuilding BrewDog than settling the former business’s debts.
However, affected suppliers had been offered the chance to work with BrewDog under Tilray and potentially recoup losses through future business.
“So we had a moral obligation, yes,” Simon said.
Reflecting more broadly on his first six months at BrewDog, he admitted the turnaround had been challenging.
Looking ahead to next month’s Autumn Budget, Simon urged the Government to focus on making it easier for businesses to operate rather than increasing taxes.
Businesses were not looking for “a handout”, he argued, but tax reductions could help encourage investment and create a more business and entrepreneur-friendly environment.
Pointing to the jobs created by businesses like BrewDog, Simon added: “The world is not just about AI. It’s about building something, building a brand.”
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