What do we know about the Brewdog IPO?
Brewdog is has been preparing to hold an IPO for the better part of two years. But according to James Watt, the craft beer company is still aiming to list on either the London Stock Exchange or New York Stock Exchange in 2023.
While London is still the Scottish Brewery's ideal location for the listing, given the slump in the UK market, Watt has said they won't rule out a US IPO.
When is the Brewdog IPO?
There's no set date yet for the Brewdog IPO, but Watt is still aiming for later this year. So far the listing has has been delayed for a number of reasons, some more general - such as the coronavirus pandemic and ongoing volatile market conditions caused by Russia's invasion of Ukraine - while others are Brewdog specific, such as the scandal over treatment of workers.
The company has until August 2024 before it will need to seek fresh funding to support it's listing. The US private equity firm TSG Consumer, which owns 22% of Brewdog, extended its repayment terms until next summer to give management more time to list. But, if market conditions don't improve Watt said they'd consider new investment rather than forcing an an IPO.
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How much is Brewdog worth?
Brewdog could be valued at around $2 billion in its upcoming IPO, based on its most recent valuation. The firm sold shares to 220,000 customers through a crowdfunding round at £25 per share, which raised £7.5 million and gave the firm a market cap of £1.8 billion.
Watt’s 24% stake was estimated to be worth around $480 million, and co-founder Martin 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.
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 taxidermised 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.
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?
No, Brewdog made an operating loss of £24 million off adjusted earnings before tax of just £600,000 over the financial year ended 31 December 2022. The brewery's annual report did reveal revenue growth, however, up 13% to £321 million from £286 million in 2021.
The losses came as increasing costs impacted the firm, together with investments in people, the brand and infrastructure. Management said that the firm was still growing with beer volume growth up 66% on pre-pandemic levels.
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.
- James Watt, Captain and Co-Founder
- Martin Dickie, Beer Pirate and Co-Founder
- Neil Simpson, Finance Director
- Andrew Statham, Bar Hunter
- Allison Green, The Crew Master (People Director)
- Cameron Robertson, Commander in Chief of the Equity Punk Army
- David McDowall, CEO Retail
- Nicolle Sinclair, Head of Talent
- Sarah Warmna, Media Enquiries
- Martin Keith, Openings and Projects Manager
- Marissa Urbank, Events Enquiries
- Victoria Scott-Lewis, Bars Partnership Manager
- Steve Ricketts, Head of UK Sales
- Paul Cowdery, Impulse Channel Controller
- Ben Sanderson, National Field Sales Manager
- Colin Mowat, National Account Manager - On Trade
- Dan Buckle, National Account Manager - RTM