Brewdog finds it's a dog eat dog world
There’s a standard bearer for the British craft beer movement that recently carried out an extraordinarily successful crowdfunding campaign. It’s 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 producers’ 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 its investment target.
Sounds bit like Brewdog, doesn’t it? But it’s not – and the chances are that unless you’re not at the top end of take-home beer retailing or don’t spend a lot of time drinking in self-designated urban 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.
It’s achieved 100% growth for each of the last four years and exports to 22 countries. Yet Wild Beer has largely flown under the radar so far because it hasn’t made a big song and dance about what it does – 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 itself been on the receiving end of stick 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 such accusations by including a rebuttal in the press statement it put out to announce the deal – perhaps, 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 – from starting in co-founder Martin Dickie’s mum’s garage to £1 billion valuation in 10 years – couldn’t 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 aren’t marketing. And what is courting supermarkets and pub chains if it’s not the same sales strategy of the global brewers it professes to stand apart from?
There is, of course, nothing wrong with any of this. Drinks Retailing News, trade readers of this article and its freelance author are all in business as complicit cogs in the same machine. The difference is they haven’t spent the last decade claiming to be a rampaging mutant robot out to smash the system’s 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 “selling out”, 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 company’s “no sellout” 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 can’t support its case as empirically as it could before. But in doing so, it’s shown that it’s well aware – as it has been all along – of an enduring motto of the media world: don’t let the facts get in the way of a good story.