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Why I can’t get too excited about BrewDog’s big ‘sell out’

The bad boys of brewing recently sold a 22% stake of their company to an investment firm. So?

First, I have a terrible confession to make. Remember when John Lydon made those butter ads? I’m afraid I was partly responsible for that.

It wasn’t my idea or anything like that, but in my role as a planner I was responsible for putting together the research among butter buyers to find out who the best celebrity would be to front the campaign. It was one of the last freelance planning jobs I did before being able to switch to writing and beer consultancy full time.

We tested Lydon against a bunch of other people, and he came out top among Britain’s housewives because they felt he was so uncompromising, he’d never just do an ad for the money – he’d only do it if he genuinely believed what he was saying.

In other words, he was the best person to do what we were paying him to do, because he would never do what we were paying him to do, so if he did that, it’s OK.

Predictably Lydon got some stick for ‘selling out’. Because this is Johnny Rotten we’re talking about, he didn’t give a shit. Where he deigned to give a response, he said that punk was always about grabbing the filthy lucre from the big guys, and that’s exactly what he was doing here.

(If you ever tire of arguing about the definition of craft beer, head over to music and have a go at defining punk. As I witnessed last year at an event to mark punk’s 40th anniversary, it makes craft beer look simple.)

So I’ve witnessed a similar situation before to the one this week where BrewDog announced they were selling a chunk of the company to TSG Investment Partners in San Francisco – the same people who also help finance Vitaminwater, popchips and US beer brand Pabst – and were greeted with cries of ‘sell out!’

I can’t get too excited one way or the other about this.

Firstly, it’s hardly surprising, is it? BrewDog has been on an astonishing growth spurt for ten years. It already has 44 bars around the world and exports to 55 countries, and has double or even triple digit growth every year. The company has always been about rapid expansion, and this is a logical next step, which, if it has any lesson at all, is that, as Martyn Cornell has written, crowdfunding can only get you so far.

Second, BrewDog is maturing. Being ‘punk’ makes perfect sense when you arrive and overturn all the tables in the temple of beer, but they’re ten years old now, and that’s ancient in craft beer years. Martin Dickie and James Watt are in their mid-thirties with young families, and they employ, at the last count, about 450 people. A couple of years ago they did a re-brand that ever so subtly made them look and feel more grown up, less brash.

Before
After

BrewDog stopped being ‘punk’ when they grew into a stable, successful business that supports hundreds of people’s livelihoods instead of putting their foot through the mash tun and throwing the fermenters into a swimming pool before overdosing on End of History in a seedy hotel room. Behind the image and the increasingly infrequent brash stunts, they employ marketers, PR people, accountants, HR managers as well as brewers who all know what they’re doing, because you can’t function as a large business if you don’t. That doesn’t sound very punk, does it?

Thirdly, James Watt individually still owns more of the company than the investment firm he’s sold a chunk of his business to. If you insist on going by the US definition of craft beer, the sold stake is less than the threshold that disqualifies BrewDog from being craft.

I doubt anyone can be truly surprised by this move. I’d be amazed if anyone was genuinely upset by it. I think any outcry is merely the satisfaction of being able to say, ‘I told you so.’

As this spoof makes clear, the one significant part of this is that BrewDog will find it increasingly difficult to get away with grandstanding ‘4 real’ behaviour. I’ve sensed a move away from this over the last few years anyway.

The punk attitude has helped BrewDog build an amazing brand that pays a lot of people’s wages and genuinely does encourage more people to enjoy great beer than would otherwise have been the case.

Punk is dead. But the punks won.

Okay, now you can tell me how the Sex Pistols were never really punk anyway.

11 Comments

11 Comments

Anonymous

If it hadn't been for the butter ads there wouldn't have been the 'This is Pil' album. If there hadn't been that they wouldn't have appeared on Later… If they hadn't appeared on Later I wouldn't have seen them three times live since. Which would be a great pity. So a begrudging thanks from me.

Reply
Bailey

Insofar as they ever had any claim to 'punk' the moment to outraged about hypocrisy (if you're that way inclined) was probably when they started supplying Tesco. That's the one we asked them about when we were working on Brew Britannia and they had no trouble shrugging it off — "Gets craft beer to more people so surely a good thing?" or words to that effect. As you say, nothing since then has been a startling change of direction.

If this recent announcement had been a takeover by AB-InBev, then we might have been a bit surprised, but even then, not that much.

(And can someone let Twitter know that the jokes 'Hur hur, so much for being punk!' and 'Ever get the feeling you've been had?' expired in about 2012?)

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Anonymous

BrewDog lore is that the brewery started with £200,000 of money borrowed from a bank based only on the strength of their business plan, passion in the beer and conviction of founders. Which is clearly utter nonsense, as anyone who has ever tried to get a startup loan will know.

BrewDog has achieved a heck of a lot. They have acted as a catalyst for the changing face of beer in this country by becoming the default gateway hoppy pale ale, and in so doing they have inspired many to start their own breweries and bars. In part this was due to the beer, but the marketing was the real star of the show. Those who were unfamiliar with Stone, and so unaware of BrewDog's almost verbatim plagiarism of the California brewer's schtick, lapped up the sanitised idea of rebellion in beer form, resplendent with expensive stunts involving tanks, freeze-distilled beers and baiting The Portman Group. But behind this, the beer was contract brewed, a large chunk of the company was sold to a private equity house and new arrivals started to make BrewDog look a bit…well…old. BrewDog responded by building a shiny new brewery at great expense, rebranding, rolling out their bar concept and generally pushing the idea that their beer still encapsulated the fight against 'the man'. And the craft beer revolution was over, with a small brewery and a dedicated craft beer bar in every town, not to mention cans of Punk in every Tesco at £1.50 a pop. BrewDog had won. So they did what a lot of companies do in their position – they carried on the 'fight' and in so doing became irony impaired caricatures. They dropped stuffed cats on The City from a helicopter; provided numerous awkward moments on a BBC programme about collaborative hiring; and most recently they sued a pub in Birmingham for their name. (It must be noted that James, a lawyer by training, blamed the company's lawyers, suggesting that people who bill significant sums by the hour just start doing work for their clients without instruction from those clients.)

We should not belittle what this company has achieved, both in terms of their product (which is now more consistent, better quality and easier to get hold off than ever) or as a business. However, we should remain realistic about the fundamental disconnect from the outset between the 'punk' rhetoric and the ruthlessly driven business brains behind it.

Reply
Phil

Punk is dead. But the punks won.

ITYM "Punk was dead all along, and the irritating blowhards who turned it into a brand while making completely spurious claims to adhere to its values of anti-establishment authenticity are laughing all the way to the bank." People aren't angry with BD because we ever believed they were for real – we're angry because they now look like successful con artists.

Also, what happened to nailing our motherfucking colours to the mast by writing into BD's articles of association that they wouldn't sell a single share to a corporate brewer? Oops, sorry, that's a 404. Must never have happened.

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Anonymous

Ah right. So if they're 'paying someone's wages' that makes the crinegeworthy cultural appropriation cash-in OK, yes? What an insufferable Tory boy you are.

Reply
Cooking Lager

Depends what you think craft beer is eh?

A fair number of producers sell it as much on the basis of it's "values" as any intrinsic feature of the product being better or desirable. Those values may vary between producers but each one tends to be vocal about their own. No more so than Brewdog.

When a producer fails to live up to values they previously stated they did, then that's hypocrisy and we then understand the product and company no longer has those values and even question whether they ever did. Those that bought into those values are bound to be annoyed as much as those of us who have long mocked those values are amused.

It's on a par with Labour MP's sending their kids to posh private schools whilst making it more difficult for the rest of us to do that. The question ceases to be the actual values or even the merit of those values but the hypocrisy in failing to live up to values you previously publicly advocated.

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Anonymous

They had 7,000 people at their AGM this weekend. Not a single one of them appeared to take this investment news negatively, preferring to lap up the plans for 20 Brewpubs, expand in Ellon, build breweries in Asia and Australia, and continue to develop in Ohio.
They haven't sold their whole business. They'll still make the decisions. And their fans, who are pretty mainstream remember, will continue to love them.
He word hypocrisy is only being cried by those who weren't fans in the first place. Like with a lot of things in life at the moment, the most offended appear to be the ones the least involved. Fair play to them I say.

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Anonymous

"If you insist on going by the US definition of craft beer, the sold stake is less than the threshold that disqualifies BrewDog from being craft. "

And if you listen to James & Martin back in 2013 they sold more than the threshold.
https://www.brewdog.com/lowdown/blog/defining-craft-beer
(They also opened up this discussion a couple of months ago, but for some strange reason i can't locate this blog entry.)

Also note that in "Nailing Our Colours…" they call they buyers of Nøgne Ø "a mega beer corporation".
This is Hansa Borg, with a production close to the capacity of BrewDog….

Reply
Simon

As you say, BrewDog has been around for some 10 years or so now. I was around 18 at the time it was beginning to break through and I have to say that at the time I didn't rush to the pub to get involved with the offering of craft beer. But the company did pave the way for more local craft beer in my home town. And that's where I take my hat off to BrewDog.

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Anonymous

Everyone knows Greg Koch is an ass. He said similar things then fired his long time and loyal folks. If BrewDog are going that direction, it's troubling for all. Koch sold out and now BrewDog has done the same. No surprise, really…

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