Brewdog ‘deserves consumer backlash’

Craft beer drinkers are right to begin criticising controversial producer Brewdog as it continues to snap up market share, a drinks analyst has said.

Known for its confrontational style, Brewdog has begun seeing a backlash from some consumers, according to Mintel's global drinks analyst Johnny Forsyth (Photo: Brewdog)

Known for its confrontational style, Brewdog has begun seeing a backlash from some consumers, according to Mintel’s global drinks analyst Johnny Forsyth (Photo: Brewdog)

Brewdog’s exceptional rise in popularity over recent years has deservedly been met with criticism from some craft beer consumers and previously loyal fans bemused by its focus on ever-faster growth.

This is according to Johnny Forsyth, global drinks analyst at Mintel, who said that the relatively small but “incredibly influential” clique of “craft beer connoisseurs” are right to question Brewdog’s rapid expansion, which means the brand is “being seen absolutely everywhere”.

Speaking at the London Wine Fair, Forsyth, who was looking at the relationship between the US and UK craft beer markets, compared Brewdog’s story with that of Sam Adams, the Boston-based beer company that has become a “victim of its own success”, being deemed “uncool” to craft beer fans because of its growing market share.

He said, “Sam Adams owns 1% of the US beer market in total, which might not sound like much, but compared to other craft beer brands it is huge. It produces millions of barrels per year, and it even advertises on TV… this has caused a backlash among craft beer drinkers.”

This backlash, he said, is “being repeated with Brewdog here in the UK, and in my opinion deservedly so.”

Brewdog has been contacted for comment.

Last week, Brewdog faced criticism not from consumers but from financial analysts who warned that investors in the company may not see a return on their money.

The warnings came as the company announced it had reached the £5 million milestone in its £25m crowdfunding drive, named “Equity for Punks”, which is seeking to raise cash for rapid expansion of its production capabilities and even to fund a “craft beer hotel”.

Emanuela Vartolomei, CEO of All Street – a City firm that specialises in monitoring crowdfunding schemes – said it was “difficult to see how investors will make a financial return on this deal”.

She said the company had a “high” valuation of £305m and a lack of clear forecasts for potential investors to consider.

“There is very little clarity as to how the company will hit the revenue targets required to generate a risk adjusted return for investors,” she warned.

Brewdog co-founder James Watt responded by telling potential investors to look at the company prospectus for themselves rather than “relying on what All Street or, for an alternative view, what the Motley fool might say who offered a different opinion to that of All Street.”

20 Responses to “Brewdog ‘deserves consumer backlash’”

  1. I could point out the obvious flaws in Mr Forsyth’s logic here and also point at what a lazy piece of journalism this actually is. Firstly, based on last year’s production numbers, we are only 3% (yes 3%!) of the size that Sam Adams are. Secondly Mr Forsyth says we are ‘deservedly’ criticized but does not say by whom, or for what. And thirdly all he seems to be criticizing us for is growing our business. Fourthly I could point out that in the UK on-trade that Peroni alone sells 100 times more than Punk IPA. But screw replying with logic. That is boring. And we are not boring.

    BrewDog has never been about trying to keep everyone happy. We delight in polarizing opinion. We aspire to brew world class craft beers and make them available to as many people as we can and we have a community of over 22,000 Equity Punks on our side. We think we have played an important role in increasing the availability of craft beer in the UK, which, in our opinion, can only be a good thing.

    We love the fact that we make enemies as we gain loyal fans and we realise that this is vastly superior to being so bland that we exist in constant obscurity. Hard-core fans are better than average joe customers. As long as we do something we absolutely love and as long as what we are doing is underpinned by an all consuming passion then we don’t really give a damn what anyone thinks. We fie on those bland, indifferent philistines.

    Pretty much all you need to do for people to hate you is to be successful doing something that you love. As soon as your little business starts to show signs of flourishing some peeps will love and support you whilst others will vehemently despise you with every cell in their bodies. Your success will only serve to heighten the hater’s sense of their own inadequacies. Trapped in a dead end job, never having the balls to take a risk, the haters takes great delight and pitiful comfort in hating on those who are having fun doing something they love.

    There are many losers in this life whose sole purpose is to knock you. These line-towing corporate swine who don’t want you to be successful. They are frightened and threatened by the new. Clinging desperately to the status quo to justify their lack of vision. They are human sheep, destined to walk, to talk and to sleep with the sheep. Their mission is to take everything down to their callously indifferent mediocre level.

    This is good though. It is a sign you are on the right track. Haters have an important role to play. So love your haters. We do. We often bask in the realisation that if we were not actually smashing it, their misguided and naive intentions would be directed elsewhere.

    Not got any haters? Then you need to up your game and try a little harder. Thanks Mr Forsyth.

    You can find out more about Equity for Punks IV here https://www.brewdog.com/equityforpunks

    Oh and as for Emanuela Vartolomei at All Street, I note they are also crowd-funding currently and have raised the grand total of £1,383. Maybe they should focus on their own crowd funding before knocking our. Loads of well respected and established analysts such as Motley Fool have a very different stance on Equity for Punks IV which is going very well.

    xx

    james

  2. Joe Friswell says:

    Wow! I’m not surprised he got under your skin!

    Could you let me know if you’re still looking for investors and how I might join in, please?

    Keep up the good work !

    Joe
    Joefriswell@talktalk.co.uk

  3. Phil says:

    Why on earth is no-one taking into account all the perks that come with investing?
    Minimum investment is £95, so say you spend £10 on Brewdog’s online store each year for the next 6 years (for most investors I imagine this would easily be done), the 10% discount plus the £10 beer bucks covers the initial investment. Not to mention other perks such as 5% off in bars, the AGM, Bottlebox beer club, Beatnik brewing, a free pint on your birthday, exclusive option on new beers… not to mention the fact I own a small piece of Brewdog, and that my investment will help Brewdog grow and continue to create more kick-ass beers! I will rejoice when I see bottles of Punk in place of the tasteless fizz that currently occupies supermarket shelf space.

  4. Phil says:

    Why on earth is no-one taking into account all the perks that come with investing?
    Minimum investment is £95, so say you spend £170 on Brewdog’s online store each year for the next 6 years (for most investors I imagine this would easily be done), the 10% discount plus the £10 beer bucks covers the initial investment. Not to mention other perks such as 5% off in bars, the AGM, Bottlebox beer club, Beatnik brewing, a free pint on your birthday, exclusive option on new beers… not to mention the fact I own a small piece of Brewdog, and that my investment will help Brewdog grow and continue to create more kick-ass beers! I will rejoice when I see bottles of Punk in place of the tasteless fizz that currently occupies supermarket shelf space.

  5. Phil says:

    Why on earth is no-one taking into account all the perks that come with investing?
    Minimum investment is £95, so say you spend £170 on Brewdog’s online store each year for the next 5 years (for most investors I imagine this would easily be done), the 10% discount plus the £10 beer bucks covers the initial investment. Not to mention other perks such as 5% off in bars, the AGM, Bottlebox beer club, Beatnik brewing, a free pint on your birthday, exclusive option on new beers… not to mention the fact I own a small piece of Brewdog, and that my investment will help Brewdog grow and continue to create more kick-ass beers! I will rejoice when I see bottles of Punk in place of the tasteless fizz that currently occupies supermarket shelf space.

  6. Craig Cooper says:

    Hey James, agree totally in your comment about lazy journalism backed with no real facts or substantiation.
    If becoming as successful as Samuel Adams is your worst issue, then you’re in fine opportunity and shareholders will be thrilled and many many people will enjoy your beers.
    Love your beers, Love your work. Keep chasing the journey and hold that light up high! All the Best.
    Cheers,
    Craig
    Bach Brewing
    New Zealand

  7. steve says:

    i love it that someone tells the truth
    good job james

  8. Great points James

    Love your attitude

  9. AS well as the obvious size difference that James pointed out, there is another glaring difference in Sam Adams and Brewdog. Sam Adams is not positioned as a craft beer in the United States. Yes, they talk about heritage and craftsmanship, who doesnt, but no-one, not them or their market or their customers, is under any illusion that Sam Adams is anything but a large brewery producing vast quantities of very average (sorry SA, i’m being subjective) tasting weak beer. The large majority of ‘craft brewers’ in the US would baulk at the mention of Sam Adams in the same article as something that they have poured some heart into. And I think its fair to say that Brewdog continue to put their heart and soul into their products, for now.

  10. Johny Forsyth thinks BrewDog is shit because they are growing their business and chasing their dream. And tries to back it by quoting anonymous sources.

    And as for the comparison. BrewDog started in a shed in Fraserburgh. Sam Adams started at Miller Coors. Go figure.

  11. Pipinfort says:

    James Watt…….. Craft beer Legend….

  12. Finlay says:

    I am Spartacus!
    James touched on this and Neal Baker completely missed it, to his eternal shame as a journalist. Investors in Brewdog are not just putting money into a company in the hope that the Board will turn their contribution around as a cash dividend in short order.
    Each of us, yes I’m a ‘Punk’, has help to back a movement, partially with the interests of Brewdog at it’s heart but also to bring craft beer as a beverage option to the wider whole. Yes they have seen growth like no other in their domain, you have to ask why no other saw the space and filled it?! In business terms Brewdog is doing what a business should do, to defend those who cannot, will not or are too plain lazy to bother is not constructive nor in the public interest.
    However back to the argument made by Neal, what are the Investors getting out of this? For now more shares! EPIV saw existing shareholders increase their share number and based on the EPIV offer, on paper, my one share has seen a 250% increase in real terms (1 @ £90 = 5 @ £45ea) Which prompted me to buy EPIV shares to increase my benefits. As eluded too above the material wealth is not what the majority of Equity Punks are here for, not in the short term at any rate. It’s about the movement and the diversity of product Brewdog brings to the party, plus the perks and for people committed to the movement that is where the dividend (short term) lays.
    We also have direct access to the board should we choose, a management team fully approachable by any of the 22,000 strong ‘development team’ you have a good idea, they want to know and if you decide to keep it to yourself and make something off it, they are more likely to support you than despise you. (That is the impression I have gained so far)
    Back to the £90 EPIII share, having prompted me to change my beer buying habits and in the main become my own best customer I have clawed back about 60% of my investment in savings on NEW beers I had no knowledge off, styles that do not appear in our Supermarkets, Off sales or even speciality drinks stores.
    Pretentiousness some would claim is what is driving this view point, not at all it’s about choice, quality products and good business practice.
    It’s not too late to join the party https://www.brewdog.com/lowdown/blog/the-benefits-of-investing-in-brewdog

  13. Finlay says:

    Lazy journalism defending lazy business.

    Total failure to acknowledge the Craft Beer movement that has been given a massive push by Brewdog (for the benefit of all not just Brewdog) and one that they continue to drive. Investors are not just looking for a short order turn around of wealth we are looking to a movement that brings so much more.

  14. CraftBeerCommentator says:

    You cannot compare BrewDog to Sam Adams

    BrewDogs Beers are Huge. Massive. In your Face Flavourful specimens of Beauty. No matter how big the business grows or how many beers they produce or ship or have on shelves everywhere – as long as the passion is evidenced by the liquid – there will be no issues from – as mr forsyth so elegantly puts it – the “incredibly influential” clique of “craft beer connoisseurs”

    They are the ones that drink the beers that BrewDog produces. If the beers change to being bland and monolithic – what BrewDog is against – and why it is crowd-funding in the first place – then this will be its downfall.

    Rest easy with the fact that this crowd-funding initiative is also a poison-pill that will be hard for any brewing monolith to swallow. Easing connoisseur investors worries that the integrity will stay in the glass, and also that the beers will continue to lead whilst the monoliths try feebly, to follow.

    PS: Imagine loving your job and fuelling your passion everyday – good on you James for showing other entrepreneurs that passion and tenacity can pay off

  15. Neal Baker says:

    ‘Shame on me’ for not writing a free advertisement for Brewdog? I would like to clarify for people who don’t understand how journalism works that I am not putting across an argument or my own view-point (of which I have none) – what is reported above is what an industry analyst said in public, and I was there to report what he said. It is as simple as that.

  16. Jimbo says:

    An impassioned response James, I’m with you fella.

    Have been looking at your share issue and have a question.

    You mention being closer to 3% of Sam Adams size (based on volume sales by sounds of it) however you have valued BD at closer to 15%-17% of Sam Adams as they are currently listed (market cap of $3bn, give or take). I appreciate the metrics there don’t necessarily equate but have been running various means to evaluate the biz.

    Can you help me get over that discrepancy to make an investment? Or is it pure potential for growth on minimum 5-10 year plan in absence of forecasts.

    Big fan of your brand (but not big drinker), the plans for the biz, want to see value in putting a few quid into play. But I’m struggling a bit with valuation.

    Genuine question, this isn’t an attempt to criticise, or attack. Appreciate you likely won’t have chance to respond but hopeful given you previously posted, assuming the ID is true.

    Cheers

  17. Richard says:

    Just watching this company on bbc 2, this James guy is a divot of the biggest kind, I can see this company gone bust within 5 years as they will have spent all the stupid investers money on zany way out beard clippers, I have tasted there beer and its poor, very poor in what is seamingly crowded market.

    We like blowing up shite, we like blowing our investors money more like.

  18. beer aficionado says:

    The chuzpah of hipster capitalists to abuse and claim for themselves the term “punk” to market their increasingly watered down brew and their fake craft-beer Disneylands. Craft beer isn’t just beer, it’s an ethos and on that count Brewdog is simply another version of Bud Lite… Don’t be duped! Drink genuine craft beer from small, independent makers and shun the growth-hungry sell-outs!

    • Alasdair says:

      Aw, diddum’s……
      BrewDog got famous and big so now I can’t like them because people who are less knowledgeable than me buy their beer. I’ll champion some small brewer until they too have the audacity to grow and provide ‘living wage’ employment for 100’s of people and introduce hordes to the amazing world of craft beer Rocket.

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