Brewdog finds it's a dog eat dog world

on 11 April, 2017

Thereís a standard bearer for the British craft beer movement that recently carried out an extraordinarily successful crowdfunding campaign. Itís a brewer that is at once innovative, experimental and exciting in its approach to making beer and has embarked on opening top-notch specialist bars to bring both its own and other producersí best brews to significant urban locations. Its fundraising effort to ease its expansion plans attracted enthusiastic investors going into four figures and achieved 179% of investment target.

Sounds bit like Brewdog, doesnít it? But itís not Ė and the chances are that if youíre not at the top end of beer retailing and donít spend a lot of time drinking in self-designated craft beer bars, you may not have heard of Wild Beer Co.

Founded in Somerset by Brett Ellis and Andrew Cooper in 2012, as the name suggests it specialises in wild yeast fermentation, coupled with barrel-ageing, to make complex and intriguing beers that provide it with a real USP and have gained it wide respect among specialist bars and beer shops that have their antennae tuned to detect more than just 50 shades of IPA.

Itís achieved 100% growth for each of the last four years and export to 22 countries. Yet Wild Beer has largely flown under the radar so far because it hasnít made a big song and dance about what it does Ė its 2,044 investors are a reflection of genuine admiration for and belief in what it does, not a response to a grand-standing tendency to stick it to the man. †

Ah yes, Brewdog, the self-styled maverick brewer which for a decade now has carried out regular verbal attacks on major brewers and denounced marketing as if it were the eighth deadly sin.

But this week Brewdog has been on the receiving end of stick itself from some quarters of the hipster beer world after its £213 million sale of a 22% stake to TSG Consumer Partners, a US private equity firm that has or once had shares in all manner of consumer brands including health clubs, snacks, bottled water, coffee, skincare products, cooking sauces, wine, frozen food and wart creams.

Some commentators have questioned whether Brewdog is selling out by taking the corporate shilling. Brewdog anticipated the question by including a rebuttal in the press statement it put out to announce the deal Ė indeed, some might say, giving the impression that it doth protest too much.

But really the deal comes as little surprise to many in the industry who have struggled to accept that such a juggernaut of a business building exercise Ė from starting in co-founder Martin Dickieís mumís garage to £1 billion valuation in 10 years ≠Ė couldnít have been fuelled, at least in part, by some sort of long-term corporate buy-in and/or founder exit strategy.

In truth, Brewdog has long been more prepared to play the traditional corporate finance and marketing game than it was prepared to admit. After all, what is crowdfunding if not a small scale IPO? What are whacky PR stunts, a willingness to appear on reality-style TV docs, the feeding of controversial soundbites to grateful journalists, entry into industry awards schemes and gimmicky pieces of branding and packaging, if they arenít marketing. And what is courting supermarkets and pub chains if itís not a strategy associated with the global brewers it professes to stand apart from?

There is, of course, nothing wrong with any of this. Off Licence News, trade readers of this article and its freelance author are all in business as complicit cogs the same machine. The difference is they havenít spent the last decade claiming to be a rampaging mutant robot out to smash the systemís inner workings, however much they may occasionally find them dispiriting, demeaning, distasteful or plain daft.

If Brewdog feels genuinely aggrieved at claims that it is ďselling outĒ, then it might have been better served biting its media lip in the past and shown a bit more humility about its place in the brewing world.

Of course, the companyís ďno selloutĒ defence of the deal is more likely just another calculated opportunity for the company to restate its independent spirit, even if the substance of the TSG deal means it canít support its case as empirically as it could before. But in doing so, itís shown that itís well aware Ė as it has been all along Ė of an enduring motto of the media world: donít let the facts get in the way of a good story.

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