BrewDog goes global as bar empire expands

City Editor

Tuesday 29 January 2013

SCOTTISH beer company BrewDog is preparing to extend its burgeoning bar empire into locations including Belgium, Brazil and Japan to reap the benefits of its new beefed-up brewery.

WIDENING HORIZONS: BrewDog founders James Watt and Martin Dickie are preparing to extend their burgeoning bar empire.

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TIM SHARP CITY EDITOR

The company, known for beers such as Punk IPA, will kick off its overseas drive with the opening of a bar in Stockholm, Sweden in March, with another launching in Sao Paolo in Brazil in June, and a third in Brussels in September.

It also has plans to open up a bar in Tokyo. BrewDog, which is already present in 32 export markets, is planning to use its links with long-established Anchor Brewing of San Francisco to extend distribution of its beers in the US. It is also holding talks about expansion into South Korea, India and China. Co-founder James Watt told The Herald: "The beer market is changing. More and more people are rejecting the mass-market monolithic beers. It is a very exciting time to be in the beer industry." Mr Watt said the company has hitherto been constrained by capacity, even cutting supplies to parts of the on-trade so it could meet demand elsewhere. However, its new £7.8 million brewery near Ellon, Aberdeenshire, opened earlier this month and currently has the capacity to produce 100,000 hectalitres, the equivalent of 25 million bottles, a year. There is scope to expand this to 250,000 hectalitres, giving BrewDog the opportunity to develop new markets. The brewery was part-funded via a £2m online share issue dubbed Equity for Punks. BrewDog's original Fraserburgh plant is to be retained for experimental brews. The overseas bars will be run with local partner companies, with BrewDog workers likely to go overseas on three-month rotations. Since opening its first bar in Aberdeen two years ago, BrewDog has built a 10-strong network in the UK, including outlets in Glasgow and Edinburgh. It plans to open another five or six, including bars in Leeds and Liverpool. BrewDog, which was formed in 2007, is expected to have doubled turnover to £12m last year. As it continues to grow, BrewDog's workforce is anticipated to rise from 160 people to 230 by the end of the year. Exports are an increasingly important part of its growth with 58% of sales from overseas. Of the places where it plans to open bars, Sweden was one of BrewDog's earliest export destinations, while Japan and Brazil are already big markets for BrewDog. Mr Watt said. "No-one can obsess about something like Japanese people can when they like it." In the US, Mr Watt hopes to expand distribution through chains such as Wholefoods as well as independent retailers. Distribution there is overseen by Anchor, the 117-year-old mainstay of the US craft brewing scene. Anchor's owners have a stake in the Scottish brewer. Meanwhile, BrewDog has shares in Anchor Brewing. Mr Watt said BrewDog had benefited significantly from support from the likes of Scottish Enterprise and Scottish Development International in accessing new markets overseas. Growth in the UK will be aided by the opening of a warehouse in London, which will allow BrewDog to supply smaller bars and shops. However, despite its growth and ambition, Mr Watt insists BrewDog remains an "anti-business business". "We are not focused on growing profits. We are focused on getting people as excited by great craft beer as we are," he said. BrewDog has distinguished itself by coming out in favour of minimum pricing. "What the big companies do is irresponsible," Mr Watt said. The Scottish Government wants to set a 50p price per unit of alcohol. Likewise, Mr Watt said the company is not perturbed by the tax levels on alcohol that enrage some of its rivals. "People get too wound up about that. They are competing on price and that (tax) impacts their price," he said. Nor, indeed, does he retain much sympathy for the company's rivals in the on-trade who are seeing widespread closures. "I think pubs are closing because there is currently a lack of choice for consumers. 90% of bars have the same boring four beers on the go," he said. "Why pay £4 a pint from staff who resent they are having to pour a beer for you?" Video: Brewdog: our binge drink critics have same IQ as garden gnomes

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BrewDog goes global as bar empire expands

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