BrewDog: Creating an empire around craft beer

by Youri Sawerschel , 4 July 2018

In our Brand Profile Series, we take a closer look at surging brands across the world. We sample our extra hoppy eighteenth feature from across the bar at BrewDog, the irreverent Scottish craft beer brand.

BrewDog Logo

Success on tap

2007 was a good year for entrepreneurship. From fashion (Bonobos, Orlebar Brown), to tech (Illumination studios, Zynga or SoundCloud), many companies founded just before the financial crisis have managed to not only survive the crash, but to become new leaders of their respective fields. The same can be said of BrewDog, created in 2007 by childhood friends James Watt and Martin Dickie. Based near Aberdeen, the company went from selling hand-bottled brews at farmers’ markets to a global enterprise valued at £1bn in April 2017. All of this on the strength of one core belief: good people deserve good beer, and they’re not getting it from the industry giants. Indeed, in 2016 10 companies accounted for over 60% of global beer production, with Belgian giant AB InBev carving out nearly a quarter of the 1.96 billion hectolitre market.


Craft Beer for Punks

So, how do you set out to disrupt a global oligopoly – and, in many countries, a quasi-monopoly – that dishes out standardised products to consumers that have been raised to drink just one or two brands their whole life? BrewDog’s answer to that question was to mix the hipster love for all things “craft”, lace it with a touch of counterculture imagery and punk attitude and voilà, a legend was born. Starting with the beer, the founders got their inspiration from the nascent US craft beer scene, creating fragrant, fruity brews that were very different from the UK and European beer offering. The novelty and undeniable quality of the beers soon translated into award wins, followed by big supermarket orders, which allowed the business to quickly go from a garage project to a multimillion-pound enterprise. A fresh branding and some major publicity coups (see below) helped turn that curiosity into traction, but it was the pioneering use of crowdfunding that really helped the company take off.

Indeed, BrewDog was one of the first companies to harness the full potential of crowdfunding. For as low as £50, investors have been able to own one or more BrewDog shares. Aside from a very pleasing 2,756% return on investment for series A investors, this tangible link to the company makes it more likely the person will consume the product, encourage their friends to buy it and otherwise promote the company. Ownership of BrewDog shares also give investors access to discounts, limited releases and invitations to exclusive events like the annual shareholders’ conference in Aberdeen, which looks less like a general assembly and more like Glastonbury with actual good beer on tap. So far, the 70,000-plus investors have helped the company raise more than £53 million in equity with a new, fifth investment round currently taking place until October 2018.

The last prong of BrewDog’s strategy is vertical integration. The company opened their first BrewDog bar in Aberdeen in 2010 and has been opening new locations in the UK and abroad at an exponential rate ever since. The now 50-plus bars offer a comprehensive selection of the company beers, as well as “guest beers” made by other, often local breweries (think Japanese beers on tap at the Tokyo BrewDog bar). This capital-intensive move seems to be paying off, with revenues from the BrewDog bars accounting for almost half of total sales.

It’s what is on the inside that counts

Great beer, great bars, and a great community already make a compelling argument for a great brand. Which is a good thing, because brand design is probably the area where BrewDog shines the least. The brand platform revolves around a punk/underdog positioning, a bearded, tattooed David fighting the industrial Goliaths of the beer world with distinctive craft brews. The brand aesthetics reflect the positioning, going for bright colours, bold lettering and spray-paint effects that feel like the 80s all over again – minus the counter-culture. Beer names like Punk IPA (the company flagship), Dead Pony Club or Tactical Nuclear Penguin are fun to hear for the first time, but the magic rapidly wears thin. The same can be said of the BrewDog bars. While the locations vary, the interiors mostly share the industrial-revival traits that define modern hipster hangouts. Think large wooden tables, exposed ceiling ventilation and copious use of neon and brick walls.  As the company grows, let’s hope some thought is given to channelling the unique traits of the brand into a distinctive – and perhaps more mature – identity

Graphic Bottles

A glimpse into the BrewDog aesthetics

BrewDog Nation

What BrewDog lacks in distinctive design, it more than makes up in creativity with regards to interacting with its community – and the general public. Its core audience is of course the 70,000 small shareholders-customers it has acquired over the last 8 years. In exchange for small perks (discounts, exclusive access to limited edition beers and events), this group acts as a small army of brand ambassadors both within the craft beer community – many BrewDog fans are homebrewers or craft beer connoisseurs – and towards the general public, through friends and family. The company plays an active role in evangelising the public about the merits of craft beers. Its in-house magazine is aptly called Propaganda, and the company is currently exploring the launch of its own digital TV channel devoted to all things craft. The company has also earned itself a reputation for flashy and sometimes controversial marketing coups. Recent initiatives include a beer made with water from the melting ice cap to alert authorities about the perils of global warming, another called “Hello my name is Vladimir”, the “world’s first pro-LGBTQI+ protest beer”, as well as beers packaged in taxidermy stoats or squirrels. The company even drove a tank in front of the Bank of England to promote their “Equity for Punks” campaign.

Finally, the company is not afraid to take a stand. Whether it’s the quality of its products, its eco-credentials or the 20% of profits donated to various charities every year, BrewDog has “crafted” itself as the corporate “rebel with a cause”, echoing similar moves from companies like Patagonia or Harley-Davidson.

BrewDog Charter

The BrewDog Charter

Coming of age?

As BrewDog transitions from small Scottish micro-brewery to global craft beer giant (it already operates a brewery in the US is building one in China), it faces the same challenges as countless former startups. From quality control to the temptation of a lucrative takeover, and the difficulty of pleasing both hardcore beer “geeks” and casual drinkers, there are a million things that could go wrong at this crucial stage. What’s more, large industrial brewers are now using their considerable financial strength to create new craft-style brands within their portfolios. By operating its own network of bars, BrewDog is partially shielded from this (to a degree), but with competition heating up from both small and large craft brands, BrewDog faces challenges on all sides. But contrary to its competitors large or small, BrewDog can count on the loyalty – and input – of its shareholder base who have a vested interest in seeing the brand thrive. If the brand truly wants to retain its edge, while catering to these customers for the long term, the truly rebellious thing to do might be to limit financial growth and prioritise customer and shareholder value. How BrewDog strikes that tricky balance will be interesting to watch. Preferably with a cold pint in hand.

(Figures sourced from the BrewDog 2017 Annual Report, Euromonitor)

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Picture credit: © BrewDog

Brand Strategy, Consumer goods