INSIGHT

The little mermaid won't ever call
Darth Vader 'Daddy'

BrewDog - going against the grain

We’re dedicated to helping you disrupt your markets. Or cope with it when the inevitable happens. And to help with a little insight and inspiration of how it’s done, we’ve created the Virgin Media Business Disruptor 10 list, in conjunction with Fast Track 100 – as published in The Sunday Times.

Here, in the fourth part of our 10-part series, we discover what happens when a dowdy product is given a disruptive edge to find a new market.

Telling the pin-striped vultures where to go

Not many firms can claim to have taken on Putin, the Advertising Standards Authority and Westminster.

BrewDog can. So confident is this leader among the ten-a-penny craft ale crew that it’s phasing out the beer bottle while taking on the might of Russia - James Watt is banned from the country over its controversial My Name is Vladimir brew.

Its success has left the drinks industry stirred. And thoroughly shaken. Not least because BrewDog was born in 2007, just before the hurricane of 2008’s global recession. Not a time for investors to sink cash into something as hipster as microbreweries. And yet, they found a way.

After failing to secure investment from conventional sources, BrewDog launched Equity Punks, an online crowdfunding scheme.

 
 

Seven years on and the craft beer specialist has raised £30m as part of the biggest crowdfunding campaign in the world, with 2016 sales forecasted in the region of £73m. Punk IPA is now the best-selling craft beer in UK supermarkets.

The culture's as disruptive as the beer

James says: “We’re so glad we couldn’t get money from the banks because now we have a far more compelling business model with 50,000 investors. It came out of necessity. We had no money. There was a global recession. Banks were a no-no and venture capitalists are pin-striped vultures, so we had to find another way. We wanted to turn small business finance on its head, which we have done. We have a kind of punk DIY ethic in how we run our business.”

BrewDog’s disruptive culture inspires everything it does. Three years ago it got a ticking off from the Advertising Standards Authority for posting "BrewDog is a post Punk apocalyptic mother fu*ker of a craft brewery” on its homepage. Challenging the status quo has earned BrewDog its place on the Virgin Media Business Disruptor 10. From two men and a dog in the beginning, the company now has 750 employees – 250 at its Aberdeen headquarters and 500 in the 35 BrewDog bars across the UK. Huge importance is placed on recruiting the right personnel in order to maintain the irreverent approach – and the ultimate decision is made not by managers, but by fellow staff members.

Goodbye to the beer bottle

People director, Allison Green, says: “Getting a job here is very tough. We get thousands of applicants every year and have had people apply twelve times before we’ve recruited them. If you came to work as a brewer, you’d work a couple of shifts, we’d take you out for pizza, drink some beer, and then three or four members of the team would talk about whether the person is right for the company. Our Charter is about believing in craft beer, being passionate, uncompromising and part of a business where everyone is as important as each other.”

As the saying goes, where there’s disruption, there’s tech. Or something like that. BrewDog’s rise has been assisted by technology, which has helped create the range of premium beers. They’ve pioneered a technique known as “Ice Distillation”, used to make their strongest tipples, including End of History at 55 per cent. After successfully campaigning to overturn a 300 year old law in order to introduce two-third pint measures, BrewDog is even bidding goodbye to the beer bottle due to cans being lighter to ship, better at preserving the contents and having a lower carbon footprint.

Next stop USA

The next milestone on their journey is an imminent launch in the States, where the craft beer market is five times bigger than in the UK. BrewDog’s 100,000 sq ft brewery in Ohio cost $35m and will commence production next year. Closer to home, over £20m has been invested in the Aberdeenshire site, with plans to start distilling gin, vodka and whisky.

James says: “We are going to invest just as much in the next three years as we have in the last ten. That is quite scary, but we are coming in with our sleeves rolled up and a smile on our face. We don’t get to determine how big we get. We get to determine the beers we make and how we treat our employees and everything else is out of our hands.”

Changing the market

Clearly the excitement will continue for as long as the BrewDog brand keeps growing. While many entrepreneurs enjoying the same success might be forgiven for cracking open a beer and taking a step back, James isn’t that way inclined.

He says: “Being disruptive is absolutely everything. It’s about challenging how you think you should do things or how you did things before. We’re getting the mass market to move a bit towards us – we’re never going to move towards the mass market. There have been approaches, but its independence or death. Selling out would be like the Little Mermaid being adopted by Darth Vader.”

Here, here James. We’ll raise a craft beer to that.

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