“I want to do this when I’m 80” – BrewDog boss James Watt

James Watt moves cautiously. BrewDog’s chief executive broke his collarbone this summer while walking with a group of his “equity punk” investors in the company’s “Lost Forest” – a property it bought in the Scottish Highlands in 2020 – at 30 miles a week hour on a mountain bike.

Screws in the bone are helping him bounce back from the latest upset at a turbulent time for the UK’s biggest craft brewer. Last year, a group of ex-employees publicly denounced what they called the “toxic” company culture and spotlighted it. Since then, Watt says, BrewDog’s daily brewing costs have increased by a third; he was diagnosed with Asperger’s Syndrome; and he initiated a private lawsuit against a woman for alleged fraud.

Has he ever considered retiring from BrewDog? “Not for a second,” he says. “I want to do this when I’m 80.”

Watt and co-founder Martin Dickie founded BrewDog in Aberdeenshire 15 years ago. Madcap marketing — it once dropped stuffed animals from a helicopter — and crowdfunding campaigns helped it grow at breakneck speed, spearheading the craft beer boom.

The entrepreneur speaks at BrewDog’s 27,500-square-foot bar in Waterloo, which opened in central London in August and features a slide, ice cream van and pub. An even bigger rooftop bar opens in Las Vegas in December, although rising costs have forced the company to close six of its 70 bars in the UK in recent months.

“We’re really looking forward to building what we hope will be the best companies of our generation,” he says.

But BrewDog’s perception soured when former employees – who dubbed themselves “Punks with Purpose” – accused him of misogyny, hypocrisy, a “cult of personality” and the pursuit of “growth at any cost.”

Watt initially resisted the claims before accepting that changes were needed. “I think it’s 100 percent fair to say that during the extremely high growth years of 2015-2018, we could have done more to take care of our employees,” he says. “I apologize to the team members we let down.”

Blythe Jack of BrewDog’s private equity investor TSG Consumer Partners was parachuted in as the first chairman during the crisis, and was succeeded three months later by retail heavyweight Allan Leighton. Watt commissioned a review of BrewDog’s culture and distributed personal shares worth potentially £100m to 750 employees, as well as profit-sharing to bar staff.

Still, he remains defensive, saying the allegations have been “massively exaggerated in the media.”

In September he won in court damages for the £100,000 fraud charge against a woman who had said she could help identify people who were spreading “lies” about Watts online. He has now filed a private lawsuit in this regard in England. The fraud was part of a “criminal conspiracy,” he says, and declines to comment further on the case.

Some former employees accused Watt of hiring private investigators to “intimidate” critics. He pushes back: “That is absolutely not the case. We used private investigators to uncover a criminal conspiracy and gather evidence.” In response to a Sunday Times report that a former BrewDog worker was being attacked by hackers, Watt says “no hacking” was involved.

Brewdog Waterloo, which opened in central London in August
BrewDog Waterloo with slide, ice cream truck and speakeasy. The 27,500 square meter bar opened in central London in August, © Simon Jacobs/PA

Amidst the episodes, Watt has also made a personal discovery. “Within the last six months I was diagnosed with high-functioning Asperger’s,” he says. “So I worked on it with a leading neurodiversity expert. I guess I always thought I was just a little bit of an introvert and maybe I lacked some kind of social skills.” He says the diagnosis will make him a “better leader.”

Leighton’s attorney has also proved invaluable, adds Watt, who worked on fishing boats with his father before BrewDog. “I’ve never had a mentor, so I think having someone who’s a phenomenal mentor helps me a lot.

“My management style was probably the management style of a North Atlantic captain, which means: ‘We’ll do it, let’s go!’ . . . It’s so much more valuable to say, ‘Here’s why we’re doing this’.”

As for culture, he recounts changes made in part in response to a review by consultants at Wiser: employee representative groups have been set up – with a promise to give employees a direct say in how the company is run; establishment of an anonymous ethics hotline; and appointed a director for community and inclusion. It also hired an experienced city communications agency.

Some industry insiders remain skeptical. Misogynistic allegations resonated throughout the beer industry in the wake of the BrewDog controversy last year, prompting a recruitment campaign by a newly formed Brewery Workers’ Union. Ed Hill, his rep, isn’t yet convinced that BrewDog has gone from the “cosmetic change to the actual change.” Watt, meanwhile, says the beer maker convinced some of the “punks with purpose” to rejoin the company.

Brewdog Las Vegas: The focus is on the US market
BrewDog Las Vegas: The focus is on the US market

Now he faces the additional challenge of keeping costs under control. The 40-year-old says the cost of producing Punk IPA, BrewDog’s most popular beer, has risen 34 percent year-on-year, while electricity bills for his bars, which account for 40 percent of the business, have quadrupled. Shifts in consumer habits in the Covid-era, such as a greater emphasis on food and less late-night drinking, have also impacted gains. It posted sales of £286m last year. Pre-tax losses fell to £9.4m from £12.5m in 2020 when the pandemic hit.

He predicts “a very tough 18 to 24 months”. “I think we’re almost in a little bubble right now before Christmas where consumer spending hasn’t quite come down yet. . . January, February, March will be very tough.”

BrewDog expects to make a “small loss” this year, but revenue should rise 17 percent, Watt says. He postponed an IPO originally scheduled for 2020, but still hopes to list TSG within two and a half years or replace it with a new investor. BrewDog’s recent crowdfunding is valued at nearly £2bn, raising eyebrows among analysts. He doesn’t want to sell to a bigger competitor. Global brewers, he says, are making beer a “commodity of the lowest common denominator.”

BrewDog’s typical customers, he jokes, are “borderline alcoholics with attachment issues,” before praising his beer-loving clientele, who range from hardcore punks to older women.

As always, Watt faces new controversies. BrewDog’s own advertisement, which said it was the “anti-sponsor” of the World Cup in Qatar – complete with attacks on corruption and a pledge to donate larger profits to human rights causes – drew backlash over a plan to host the games in to show his bars. It also turned out to have had a deal with an alcohol dealer operating in Qatar.

“That argument in my head just felt so logical: if you hate corruption, if you hate human rights abuses, here’s a way to watch football. . . and make a positive contribution,” says Watt, admitting, “In some people’s minds, it didn’t make logical sense.” He claims he’d do it all again.

Despite all the firefighting, his ambition remains unbroken. His business idol is Sam Walton, the founder of the supermarket Walmart, whose book Made in America is “one of my business bibles”. He dismisses any suggestion that craft beer has peaked and says he wants BrewDog to become one of the top five beer brands in the world. The focus is on the US market: “The size of the chance [there] for the beers we make is huge.”

Can it get that big and stay ‘punk’? Yes, he insists. “Once we’re not punk anymore, once we’re not doing things the way we want to do them, we might as well all go home.”

https://www.ft.com/content/c9ff18e2-73a1-427a-97a6-eb72552926c9 “I want to do this when I’m 80” – BrewDog boss James Watt

Adam Bradshaw

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