The Garrulous Jay – Beer Today, Gone Tomorrow

The rise and fall of BrewDog serves as a cautionary tale for both entrepreneurs and investors.

The 2nd March announcement that the company had entered administration, with the closure of 38 BrewDog bars and the loss of 484 jobs, marked a precipitous decline for what was once seen as a poster child for British entrepreneurial success.

Set up in 2007 by two Scottish beer lovers, James Watt and Martin Dickie, in a lock-up garage near Aberdeen, the business grew to have bars and breweries across the globe.

Right from the start Watt and Dickie built the brand on rule-breaking, irreverence and a David-against-Goliath culture. Their signature beer, Punk IPA, epitomised this.

As the back cover of James Watt’s 2015 book Business For Punks advocates, “Don’t waste your time on bullshit business plans. Forget sales. Ignore advice…” With hindsight it’s toe-curling and there’s plenty more where that came from.

The book’s back cover goes on to claim BrewDog had, “forged a whole new approach to business”.

At the peak of the dotcom boom I showed my father the IPO prospectus for a company called Datamonitor. I worked there and I was excited by the options I was going to receive when the company listed.

My father was unimpressed, observing drily that, “the idea of a business is to make money and Datamonitor don’t appear to be doing that”.

BrewDog’s fate was also driven by this business truism.

What is perhaps surprising is that in Business For Punks Watt appears to acknowledge this financial imperative. In Section B, Finances for Visionary Renegades, he writes, “this is the single most important piece of advice in this book… You need to learn finance; you need to become fluent in it. You need to know accounting inside out, upside down and back to front”.

Watt goes on to boast that, “I went from finance twit to finance geek in record time”. There’s something rather Trumpian about it.

I am not ashamed to admit that I fell for the hype: in the brand and in the book. Along with 200,000 other small investors I subscribed to BrewDog’s Equity for Punks (cringe!) share scheme. I am unlikely to receive a penny back.

Perhaps I should have seen the warning signs. The 2022 BBC Disclosure documentary, The Truth About BrewDog, and other negative press. The departure of Martin Dickie last year. Or even more basically, the fact that BrewDog beers had ceased to be a fixture in the Shippam family fridge.

Maybe I should have been a little more focused on the numbers, but when I became an Equity Punk in 2020 they looked superficially good, and once invested there was no ready market in the shares even if I had wanted to exit.

The business may be revived under its new owner, Tilray Brands, but a US company whose vision is “to lead as a transformative force at the nexus of cannabis, beverage, wellness, and entertainment” seems like an odd home for a Scottish beer business.

Oh well!