BrewDog IPO: Everything you need to know about Brewdog

Craft beer luminary Brewdog has gleefully courted headlines focused on everything from taxidermied animals to Elvis IP disputes. Discover more about the colourful Scottish brewer ahead of its planned IPO.

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What is Brewdog?

Brewdog is a UK-based craft beer and pub chain business. Founded in Scotland in 2007, it began producing various ales and lagers for retail and online purchase, but expanded into the bar trade in 2009 after purchasing an outlet in Aberdeen. Since then, it has grown its bar portfolio globally to 78 sites as of 2018, and also has a range of hotels, including one in Ohio, USA that has claimed to be the ‘world’s first craft beer hotel’.  

The company has achieved notoriety for its audacious marketing initiatives, including the founders changing their names to Elvis in a response to an IP battle over the company’s Elvis Juice product, naming a beer after a heroin and cocaine cocktail, and parachuting taxidermied cats over Wall Street.

As of March 2021, the company has raised some $100 million across various crowdfunding and private equity rounds, exports to more than 60 countries, has a turnover of around £200 million as of its 2020 accounts, and employs close to 1,000 people worldwide.

In June 2020, the company was hit by criticism from 60 ex-staff members over its 'toxic' working culture and staff fears over speaking out about their concerns. In response, founder James Watt expressed regret and said that such claims would help make him a better chief executive.

How does Brewdog make money?

Brewdog makes money through product sales and via its chain of bars and hotels. A 12-pack of its signature 5.4% ABV Punk IPA product retails at £14 on the company’s website, with a 24-can selection including a New England IPA, a session beer entitled ‘Clockwork Tangerine’, and a range of other iterations, costing £27.95 as of March 2021.

The bar and hotel trade was naturally hit hard by the coronavirus outbreak of 2020, which contributed to the company suffering a loss of £9.2 million for the period between 31 December 2019 and 30 June 2020.

Is Brewdog profitable?

Brewdog made a pre-tax profit in 2020 of £1.1 million in the year to December 31, after having lost £576,000 the previous year. Despite the significant expenditure required for its 100th craft beer venue in Dublin and a brewing facility in Berlin, founder James Watt said the company enjoyed its ‘biggest year to date’ in terms of profit.

Gross revenue also grew from £171.6 million to £214.9 million, according to its latest accounts. Boosted online sales, against a backdrop of hospitality closures, helped make up for Brewdog’s loss of bar and hotel revenue during the coronavirus pandemic. 

Who are Brewdog’s competitors?

Brewdog has a wide range of competitors in the craft beer space, from the US-based Stone Brewing, Bell’s Brewery, and Sierra Nevada Brewing to the UK rivals Camden, Innis & Gunn and Verdant. Many competitors pair a retail and/or online service with other initiatives such as local bars, merchandise and collaborations with other food and drink enterprises.

The potential IPO valuation is likely to place Brewdog above independent rivals in the craft beer space, but the company naturally is still vastly smaller than the giant multinational ‘mainstream’ beer manufacturers such as Anheuser-Busch InBev and Heineken.

What is Brewdog’s strategy?

Brewdog’s strategy at the beginning of the company’s journey was underpinned by the philosophy of ‘making others as passionate about great craft beer as we are’, a mission that still holds true for the business today. This involved a focus on quality and bringing founder James Watt’s beer epiphany, experienced following an early taste of a Sierra Nevada Pale Ale, to a UK audience.

To enable Brewdog to build its strategy, a key source of funding has been its crowdfunding program ‘Equity for Punks’ which launched in 2010, has attracted almost 150,000 global participants, and has raised some £80 million. The scheme has served to create a vested interest among the company’s userbase, making them more like advocates than mere customers.

Brewdog open-sourced its recipe collection in 2016, a move that was seen by some as an exciting shake-up of commercial norms, but by others as just another of the company’s marketing gimmicks.

In time, the strategy expanded to cover more bar openings and product launches, but also heralded a new, broader vision to diversify into sustainable initiatives. The company’s carbon-negative targets involved a switch to wind-powered breweries, together with a plan for a ‘Brewdog Forest’ to be planted on 2,050 acres of Scottish land purchased by the company and earmarked for sustainability retreats and workshops.

Who are the directors of Brewdog?

Brewdog was founded in 2007 by James Watt and Martin Dickie. In addition to the core founders, there are a number of key personnel who hold influential positions in the company.

Position

Name

Captain and Co-founder

James Watt

Beer Pirate and Co-founder

Martin Dickie

Group COO

David McDowall

CEO of Beer (Global Sales and Marketing Head)

Andy Shaw

Finance Director

Neil Simpson

Bar Hunter

Andrew Statham

The Crew Master (People Director)

Allison Green

Commander in Chief of the Equity Punk Army

Cameron Robertson

When is the Brewdog IPO?

Brewdog is preparing to IPO on the London Stock Exchange, possibly in 2021, although the ongoing coronavirus pandemic has made judging the right market conditions and timing of the flotation somewhat difficult.

In October 2020, the company raised £7.5 million via a fresh crowdfunding round; a transaction that was expected to be the last of its kind before the expected listing. However, in turbulent economic times it may be a while yet before the IPO date is disclosed. Accordingly, the potential IPO price is murky, although shares currently cost £25 through Equity for Punks.

Take a look at some of the other top IPOs for 2021.

How much is Brewdog worth?

Brewdog is worth some $2 billion according to its most recent valuation, with Watt’s 24% stake estimated to be worth around $480 million, with Dickie’s 20% share around $400 million. However, the figures are small fry compared to the valuations of the largest beer companies; for example, Anheuser-Busch boasts a valuation of around $95 billion.

How to trade Brewdog shares

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