Go Ahead Punk IPA. Make My Day. A Blogpost on James Watt, Founder of Brewdog.
It always starts with a mission and a dog!
Back in 2009, just after we’d issued the world’s first retail mini-bond at King of Shaves, I started to read about a new company on the brewing scene, Brewdog. Founded by James Watt & Martin Dickie in 2007, and accompanied by their faithful dog, they set out to fundamentally change the face of brewing.
It seems ALL great businesses are created in the teeth of a recession. The world blew up financially a year after they founded, they were going into a market dominated by a handful of massive brewers (SAB Miller, InBev, Diageo) and had — well — a product (Punk IPA) and a Mission (to bring drinking lovingly crafted ‘craft’ beers to the people).
Just over seven years later, they’ve crafted a business valued at an astonishing £300m+, they’ve just done the biggest ever crowd-fund raise (Equity for Punks IV) on their own website, and with CrowdCube. They’ve raised further money via a retail mini-bond. And, they’ve COMPLETELY up-ended the world of brewing, for ever. For example, I was in Portland, Oregon last year — and seeing people drinking Bud or Miller Lite was the EXCEPTION in bars, not the norm.
James has just published a book, ‘Business For Punks’ — launched last night by those other ‘Mission Men’ in business, Michael Hayman and Nick Giles of Campaigning Company, Seven Hills. I’ve ordered the book, but am yet to read it (‘urry up Amazon Prime). But, I don’t really need to. I think I can tell the story now, based on my experiences at King of Shaves between 1993–1999 and again in 2009–14.
It’s all about being an ‘Up-Start Start-Up’.
As my parents regularly tell my wife Tiger, “When Will was a baby, he rattled his cot incessantly, to get attention and what he wanted”. I have no recollection of that of course, but when I look by on my experiences with King of Shaves, and look at what James and Martin did, there are huge similarities.
- King of Shaves launched a ‘zag’ (different) product to what the majors were selling (a tiny shaving oil versus a big steel can of shaving foam)
- Brewdog launched a small batch craft beer in a bottle with a jumping dog on it, with punk style/design references, a ‘zag’ product to what the brewers were selling, yellow lager in a brand name bottle.
- King of Shaves agitated for change for years, railing against the shaving duopoly of Gillette and Colgate-Palmolive, with their chemical cans of shave foam, offering consumers the ‘King’ of shaves with a natural blend of exotic and essential oils, great for sensitive skin).
- Brewdog agitated for individuality, personality, humanity and quality to be poured from the bottle, rather than slickly advertised anodyne lager and beer that tasted the same, and with little or no differentiation between brands. In short, they genuinely gave a Castlemaine XXXX for the drinker.
- King of Shaves defined the men’s grooming market, between 1993–2003 with an ever-growing range of products, that catered to men’s skincare needs, before the men’s skincare market existed. Today, we take for granted the hundreds of brands in the sector. Then, there were a handful of same. When you define a market, you grow it and for a while, enjoy little, no competition. Big companies are slow to react (It’s so small, why bother? you can hear the CEO opining…)
- Brewdog defined, and now OWNS the craft-brewing market, not just bottling a huge variety of craft beers, but then selling them in Brewdog bars around the world, so they control the experience of what being a ‘Brewdog Punk’ means. The supremely successful fashion equivalent would be Ted Baker, who’ve never advertised, put all their money into their bespoke store formats, and given the customer a shopping experience like no other.
- King of Shaves continually innovated with new product. Brewdog continually innovate with new product. Witness the press coverage around their latest ‘No Label’ LGBT beer… If you create a new product, with a new angle and story, news hungry journalists will pick up on it, ‘rate or slate it’ and get you the invaluable oxygen of publicity. Without you dropping a dime on an ad campaign.
- King of Shaves was the first to launch a retail mini-bond — our ‘Shaving Bond’. And, in 2009, when I saw Brewdog launched their first ‘Equity for Punks eIPO’ (a platform based opportunity for Brewdog punks to invest in their with money) I knew the world was changing, fast and for the better. Arguably, King of Shaves and Brewdog kicked off what is now regarded as the ‘Crowd-Funding’ sector. So, no surprise they’re now on CrowdCube, founded in 2011. The ‘cool’ here is that, like us, they engaged their fanbase in the DNA of the business. We hadn’t mooted an eIPO (having just raised £4m from a shareholder) but Brewdog did. Arguably, we SHOULD have done one.
- Brewdog then EXPLODED in terms of growth, both in product, bars and international reach. They’ve done a TV show in the USA. They have a bar, or more in Japan. They’ve consistently gone to their fanbase of punks to help them drive a craft-beer drinking community sticking two fingers up, in the most ‘cot rattling way’ to the big brewers.
In short, Brewdog represent (in my eyes) the future of FMCG or consumer brands in the age of the sharing, tech driven economy. As we get more ‘tech’ so people reminisce about ‘the old days’ — think the growth of analogue vinyl over streaming, think the growth of shaving with a DE razor over a multi-blade — it’s all about connecting your brand with the individual. After all, we ALL want to be individuals, don’t we? Yes, being part of the crowd might make sense if coming together to fund or buy something (keep an eye out on Conga by the way) BUT we all dress individually, define ourselves as individuals. We all want to ‘Be the Best Me’ don’t we? (Brad Burton?)
I’ll leave this post here. I reckon in 5 years, Brewdog could be worth an astonishing £1Bn. I say COULD. Right now, it’s revenue run-rate is tracking (I guess) £50m. It’s market ‘cap’ is £330m. So, it’s on a 7 times sales and a massive EBITDA multiple. As long as it keeps growing, or ‘hockey-sticking’ as they say in the unicorn searching world of the Uber or AirBnB, it’s onto a winner. But, the big dogs fight back. You’ll have seen Guinness going back to the archives, searching out new and different ‘craft’ formulas. Others will attempt to slow Brewdog’s growth. Expect the Unexpected as they say.
But, as a company defining the ‘Mission Based Campaigning’ strategy as we look to 2016, these guys are absolutely bang in the moment, defining the market, they have it all to win, or lose. I’m sure they’ll keep humble, and ensure their Punks are well served.
They’ve crafted their own success. And if a couple of Scottish guys with a faithful dog can, you bloody well can too.
Go ahead Punk IPA. Make his day.