Is there a way forward for Brewdog? James Watt has stood down as CEO of Brewdog after seventeen years. He has become ‘captain’ and a non-executive Director. His replacement James Arrow was previously at Carphone Warehouse.
Brewdog started very small scale in 2007 with Watt and Martin Dickie, who had previously had a hand in creating Thornbridge’s Jaipur IPA. The Company managed to persuade Tesco to stock their beers and there followed a range of groundbreaking cask beers, including the flagship Punk IPA. There was nothing else like them in the UK market.
Over time Brewdog opened bars and became associated with a wider public as the leading craft beer brand. In 2024 if you go in any supermarket you’ll find Brewdog beers on sale.
Along with the beer James Watt was also known for publicity stunts. I was there when Brewdog’s first London bar which was in Camden opened in 2011. It was marked by Watt riding around Camden in a tank.
It was Brewdog and the original excellence of its beers that built the interest and market for craft beer in Britain. If you look at craft beer in 2024 you’ll find many who one way or another came into the industry via Brewdog. The experience was quite frequently far from positive employment-wise but the impact was and is undeniable.
Following the departure of James Watt as Brewdog CEO, there was some interesting commentary on what this means for Brewdog The beer writer Pete Brown in the trade paper The Morning Advertiser rightly underlined how groundbreaking the original Brewdog beers were(on cask and in bottle). He went on to argue that James Watt became a sort of punk figurehead to promote the brand, but that the era of Brewdog has now passed.
James Beeson in The Grocer, another trade journal, pondered whether trying to manage the transition from a garage brewer to a multinational one was part of the reason for the numerous issues that followed Watt around. In short Watt may have been an inspired marketing man, but a people manager he was not. This is far from uncommon across the industry.
Beeson noted that despite increasing revenue, Brewdog is not profitable. This is perhaps not surprising – achieving such a status takes time. But time appears to be short. TSG, the US private equity group which owns over 20% of Brewdog, is due to cash in by August 2024. That could mean either a float on the Stock Exchange (IPO) or a sale to another brewer or private equity group.
Recognise the union!
We shall wait and see on that but there is one step the new CEO James Arrow can take right now to set Brewdog on a better path, and that is to recognise a trade union, in this case Unite which already has membership at the brewer.
Workers join trade unions to protect and advance their conditions and so employers have reasons to recognise them – and many large beer companies do. They can make sure there is an agreed and orderly way of dealing with issues so they don’t distract from the business (which is what has happened at Brewdog) and they can also considerably reduce the amount of money required to employ legions of HR managers
Whether it is possible to reform Brewdog by overhauling its employee relations is a moot point. What has not been discussed, mainly because coverage has been confined to the trade, is whether things could have been done differently, and perhaps could be in future.
One model is for ownership to be on a co-operative basis, a mutual relationship between brewer, workers and drinkers. That is probably not something that could be done at the moment on a global scale, but interestingly Brewdog did originally have an similar idea. Its Equity for Punks scheme allowed people to buy ‘shares’ in the brewer which gave them a ‘dividend’ of reduced beer prices.
It was not a share ownership scheme as the Financial Times pointed out, and neither was it really a Co-operative where people had a genuine say in the business. In future though that could be done and it was the kind of idea promoted by Labour Governments in the 1970s, albeit perhaps not entirely satisfactorily.
Bring in the punks!
Another way forward would be for a future Labour Government to recreate something like the Carlisle State Brewery scheme which started during World War One and ran until the early 1970s. The Government owned the only brewery in Carlisle (having shut the others) and all the pubs in the area. The commitment was to produce good quality beer at reasonable prices in decent pubs.
There was in part a temperance focus to the scheme which might also feature in the 2020s. A nationalised Brewdog brewery and its pubs could actually do a lot to fulfil the original dream of Dickie and Watt. Great beer in good pubs would set the standard for others.
Of course it shouldn’t just be left with the state taking control in top-down fashion. There would need to be a structure that created something like the original punk ethos, one where brewers, employees and their union and drinkers all had both a stake and a say.
That could in time develop a model which would be a working alternative to the global big beer that currently dominates the market. The market can’t be abolished in the short term, but an intervention of this kind could promote better beer, better pubs and better conditions for employees.
