What does the recent investment in BrewDog tell us about the British brewing industry?

Posted on: April 28th, 2017

Back in April 2017, BrewDog, the unconventional Scottish craft beer company formed in 2007, sold 23% of its equity to TSG Consumer Partners, a US based private equity fund for £213m.

BrewDog, founded by James Watt and Martin Dickie, was not the first, but thanks to their initial headline making crowdfunding campaign and unique approach to advertising, arguably is the most well known of the modern breed of UK brewers that sprung up after the turn of the millennium along with the likes of the Meantime Brewery and Camden Town Brewery in London.

What does the BrewDog story tell us about the growth journey of the modern British brewer?

It must be said that the ethos and spirit of BrewDog make it a fairly unique example. From the outset BrewDog styled themselves as an anti-establishment, self proclaimed “punk” brewer which is why this investment by a US private equity fund has raised a few eyebrows in the industry.

It seems however that self or alternative funding strategies such as crowdfunding will only get a brewery to a certain point in its journey. To expand, it then has two options, look to one of the increasing number of equity funds maneuvering themselves into the industry or the old tried and tested strategy of selling to one of the more established brewing powerhouses. Meantime Brewery for example was sold to SAB Miller in 2015 and then on to Asahi, Japan’s largest brewery, in June 2016 and Camden Town Brewery was sold to the world’s largest brewer AB InBev, the company behind brands such as Budweiser and Stella Artois, in 2016 (a move that interestingly prompted James Watt to announce that due to their anti-establishment principles, Camden Town beers would no longer be sold in BrewDog’s chain of bars).

Watt and Dickie have reportedly earnt themselves £100m between them as part of the transaction which shows there is plenty of money to be made in the UK brewing industry. With the latest government statistics indicating 3 new breweries are opening in Britain each week it seems that there is no slowing down in an industry that is currently booming.

Jonathan Sherman is a solicitor in Coffin Mew’s corporate team.