Founder Profile: BrewDog

 

Summary

Craft beer has been wildly successful in the US. However, that impact hasn’t been mirrored abroad. In 2007, BrewDog was founded in Scotland as an answer to the UK’s lack of craft beer. With a punk ethos and an expanding business model, BrewDog has seen major growth and media coverage.

We recently sat down with Jason Block (CEO of the American BrewDog branch) to discuss BrewDog’s vision, their one-of-a-kind hotel, and where they are headed…


Kingscrowd
For those who don’t know, what is the genesis story of brewdog?
Jason

BrewDog was started by James Watt and Martin Dickie in Aberdeenshire, Scotland. James and Martin traveled the US in the early 2000s and were amazed by America’s extensive craft beer scene and culture. They started making beer in a garage when they returned to Scotland and realized they were onto something when one of the world’s leading craft beer critics, Michael Jackson, tried the beer and told them to quit their day jobs. They took his advice and BrewDog was born. While craft beer was on the rise for some time in the US, BrewDog was ahead of the curve in the UK and Europe. In BrewDog’s early days, growth was organic and funded by cash flow and bank financing. The equipment needed for brewing beer is capital intensive, and although the business was growing, lack of available capital became a constraint on how much and how fast the business could grow. BrewDog turned to equity crowdfunding in the UK to fund its future plans. Over nine Equity for Punk (EFP) raises both in the UK and US, we’ve raised ~$80MM. These funds were used to open over 100 bars and restaurants around the world and to invest in and open 4 breweries in Ellon, Scotland; Columbus, Ohio; Brisbaine, Australia; and Berlin, Germany. At our core, BrewDog is built on amazing, high-quality craft beer, elevated bar experiences, community and being a force for good.

Kingscrowd
How do you plan on allocating funds raised in this round to scale the business?
Jason

Funds raised in this round are going towards further expansion in the US. We have over 15,000 equity holders (EFPs) in the US business who live all across the country. We’re driven to bring BrewDog bars and distribution to markets from coast-to-coast — especially with our built-in ambassador EFP base. Funds will also be used to continue investing in our Columbus brewery. We’re always looking at growing capacity, functionality and improving the visitor experience. In addition to the brewery and our world-class tap room, we have the world’s first craft beer hotel on-site. Continuing to make the campus a one-of-a-kind destination is a never-ending goal for us. We’d like to open more hotels in other markets as well. 

Kingscrowd
Can you tell us about your hotel, the traction it has garnered, and how it fits into your overall business model?
Jason

The hotel started as a crazy (and awesome) idea. When BrewDog added bars to the mix, we came to appreciate how important the hospitality piece of the business was to our future. There is no better embodiment of an immersive, hospitality experience than a hotel. The experience starts at check-in. Naturally the reception desk is a bar,  every guest is greeted with a check-in beer; kegerators are in every room; the hotel is built around our Overworks sour brewery; guests get tours of the breweries; the soap in the room is Elvis Juice scented (our flagship US beer–a grapefruit infused IPA); the showers are all equipped with a beer fridge because who doesn’t love shower beers; and breakfast is served with beermosas. What we thought would be a loss leader is a profit center for us. The hotel finished 2019 at over 85% occupancy. In 2019, TIME magazine named our DogHouse hotel one of the 100 places in the world people need to see! Oh yeah, and the hotel was made possible by the US’s second crowd equity round.

Kingscrowd
How do you differentiate from the competition?
Jason

Our quality, our elevated bar experience, our EFP community and our commitment to be a force for good in the world is what sets us apart. We have quality labs at all of our breweries. We test the beer at every phase of the brewing process.  When you buy one of our beers in a bar or at a grocery store, it’s always going to taste great and be consistent. Our bars frequently surprise people. People come in expecting a sports bar but are met with a bar all about the beer and great food. Our kitchens are scratch kitchens–everything is made in house. We have some extensive and amazing vegan options as well. Many of our bars have experiential elements from shuffle board to outdoor spaces with awesome fire pits. We actually don’t have TVs in our bars. We’re focused on bringing people together to interact and enjoy a great beer — we also offer ‘beer schools’ at our locations where we teach people about the brewing process and beer styles. What started as an investment vehicle with our EFP rounds quickly turned into a community of our most adamant supporters (and often our harshest critics — which we welcome as a great way to keep us honest and on-track). Our global investor community of over 140,000 EFPs is a huge built-in advantage for the brand. We have literal owners all over the world who are excited to frequent our bars and tell their friends about us — it’s incredible! Finally, we take the force for good bit seriously. From providing profit sharing opportunities to everyone on the team with our Unicorn Fund to offering paw-ternity leave to our team members when they get a dog to pushing sustainability initiatives hard, we continue to find ways to make a difference to our team members’ lives and to our communities. (More on the force for good in the COVID-19 section below.)

Kingscrowd
Five years down the road, what do you hope to have accomplished/where do you see brewdog?
Jason

In 5 years we hope to be not just the largest craft brewer in Europe, but the largest craft brewery in the world. We want BrewDog bars in major markets throughout the world and specifically here in the US. We’d love to see a number of new hotels as well. We want to introduce as many people as possible to craft beer and make them as passionate about craft beer as we are. 

Kingscrowd
How has brewdog been affected by covid-19 and what is your plan moving forward?
Jason

Like so many others, we were hit hard by Covid-19. Our bars are a huge part of our business and they drive a lot of revenue and profitability. When we closed our bars and the on-premise distribution business dried up, we lost 70% of our revenue overnight. Without any insight on when we would be able to open back up, we acted swiftly to protect the business and downsize our expenses. We made the incredibly difficult decision to let roughly 70% of our team go. We did this in a way where we were able to keep the team on our health insurance. We also wanted to act quickly so our team could be at the front of the line for any government assistance programs. We’re fortunate that we have a substantial grocery distribution business. This was a huge lifeline for us over the past couple of months. While our grocery distribution and eCommerce lines of business just had their best months ever, it did not make up for what we lost on-premise. During the depths of the crisis, we focused on being a force for good where we could. Our distillery produced sanitizer (over $1M worth of it) and donated all of it to front line workers in the UK and US. In the US we canned water for retailers who struggled to keep bottled water on the shelves and donated it to food pantries and homeless shelters who needed it. We used our delivery vehicles to deliver meals to people in isolation who needed food. Finding ways to give back was a great motivator for our teams when we need something positive to work on. With our US bars beginning to open this week, we’re thrilled to be bringing back a substantial portion of our team. We feel we’re positioned well to bounce back and come out of this a stronger, leaner business. 

Kingscrowd
As you think about the business 5-10 years down the road, what do you see exit opportunities/returns for investors looking like?
Jason

Our goal is to maximize returns for investors whether that is through distributions or an eventual IPO. We’re open to finding the best outcomes for our stakeholders and aren’t married to any one path. Until that day comes, we are committed to staying true to who we are and growing our business and community by making others as passionate about craft beer as we are. 


We at KingsCrowd are excited to see where Jason and the team take the company. BrewDog is currently raising on Equity for Punks USA.


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About: Olivia strobl

Olivia comes to KingsCrowd with a background in venture capital and technology. She spent time at Glasswing Ventures, an AI-focused venture fund in Boston, before joining the KingsCrowd team. There she helped develop machine learning algorithms for the opportunity qualification of preseed and seed-stage startup companies. Prior to her time at Glasswing, Olivia worked in a lab studying the neural correlates of attention. She holds a degree in Neuroscience from Wellesley College.

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