Charlotte Rogers: BrewDog is a lesson in how to scale up without losing your ‘craft’

Having secured over £1m of crowdfunded investment in 48 hours, the irrepressible rise of BrewDog tells us a lot about how to grow a successful business while maintaining a ‘craft’ ethos.

BrewDog is officially a big deal. Over the past two days the self-styled Scottish punk brewer has raised more than £1m as part of its latest investment round, which sees it poised to become the biggest equity crowdfunded business of all time.

More than 1,000 new investors came on board in just 48 hours, helping take BrewDog towards its short-term target of £10m and further stretch goal of £50m. Describing this latest funding round as the beginning of a “new era of business”, BrewDog will use the money to fund the construction of new breweries in Australia and Asia, as well as increasing the capacity of its brewery in Ellon, Aberdeenshire.

The investment will also fund the opening of 15 new craft beer bars in the UK and the development of its first sour beer facility – The Overworks – which is scheduled to launch later this year.

To date the wider BrewDog empire spans 47 bars worldwide, a second brewery in Columbus, Ohio and its Lone Wolf Distillery for gin and vodka, all supported by £41m of crowdfunding generated since 2009.

Such is the brewer’s success that in April BrewDog sold a 22% stake in the company to private equity firm TSG Consumer Partners, valuing the business at £1bn.

How then can a company valued at £1bn, which has been the UK’s fastest growing food and drinks company for the past five years and whose flagship Punk IPA is the number one selling beer in UK supermarkets, still call itself an independent craft brewer?

READ MORE: BrewDog wants to ‘reclaim craft’ with LoneWolf spirits launch

How to stay “craft”

The tug of war over the term “craft” rages on. In September Ab InBev-owned Camden Town Brewery said it wanted to transcend its “craft beer tag” as it went live with its first above the line campaign. The reverse was true for Danish beer giant Carlsberg, which in August positioned itself as the “original craft brewery” in a bid to premiumise its offering.

BrewDog waded into the debate over the meaning of “craft” back in April, saying it wanted to reclaim craftsmanship with the launch of its new gin brand, LoneWolf. At the time Doug Bairner, managing director of LoneWolf, blamed other spirit brands for tinkering “at the edges” in order to sell their product as craft.

Despite adopting this strongly pro-craft stance, BrewDog has been accused of losing its anti-establishment mentality, especially in March when news broke the brewer had threatened independent Birmingham-based pub The Lone Wolf with legal action due to a clash of names with its LoneWolf brand.

READ MORE: How brands can bounce back from disaster

The backlash on social media was swift and fierce, labelling BrewDog a hypocrite for putting pressure on an independent family business, while at the same time being such a vocal critic of corporate organisations.

BrewDog LoneWolf

However, instead of responding via PR companies and lawyers, BrewDog co-founder James Watt tackled the issue head on. He addressed the criticism via a blog post, showing the company was quick to apologise for its actions and ready to admit fault.

Watt explained: “This is a mistake that hurt a lot, but like all mistakes it made us better. This will not happen again. All companies make mistakes, and we fixed this one quickly, openly and honestly.”

The use of social media and readiness to bring people into the brand has helped BrewDog negotiate the growing pains of becoming an established brand that still wants to retain its craft status.

In August, for example, the brewer launched its Unicorn Fund, which will see the company give away 20% of its profits every year. Some 10% will be shared equally among its staff and 10% will be donated to charities chosen by its 1,000-strong workforce and community of investors. BrewDog hopes the Unicorn Fund idea will challenge “outdated CSR policies that have zero consideration for their real-world impact”.

The brewer firmly positions itself as a strong supporter of the wider craft world. Now in its fourth year, Collabfest is an annual, multi-venue craft beer festival that sees BrewDog join forces with 35 craft breweries across the UK and Europe. Kicking off today (20 October), the festival will take place simultaneously across 25 cities in the UK, Sweden and Germany.

Taking this concept still further, BrewDog also plans to invest £2m of the crowdfunding money into the establishment of a TV network dedicated to craft in all walks of life, following the success of its TV show, Brew Dogs, which aired on the Esquire Network in the US.

Ultimately BrewDog has a difficult line to tread between its pursuit of global growth and its core ambition to retain the spirit of the punk inspired, craft beer brand fans fell in love with a decade ago. So far, however, the company has proved adept at maintaining its human touch through a clever use of social media, a crowdfunding focus and continued involvement in the wider craft community. Any disruptor looking to scale up, it might be worth taking note.

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