View Full Version : Northern Beer Blog - Pubpaper 803 – A rethink on the Brewdog craft / mainstream quand

Blog Tracker
08-04-2015, 16:39
Visit the Northern Beer Blog site (http://www.seanliquorish.co.uk/blog/?p=1840)

Brewdog are the biggest craft brewery in the UK at the moment from a commercial point of view. *In 8 years they have grown from a 2 man operation brewing 55 pallets of beer a year to a company owned by 15,000 shareholders, turning over nearly £30 million per year and employing 360 people. **Their beer is now consumed in 55 countries across the globe. *They brewed 90,000 hectolitres of beer last year, equating to 16 million pints and this is served across 26 of their own bars in 9 countries.
These are impressive numbers for any 8 year old company, profits are up 69% to £4.9 million, slowing from the phenomenal profit rise of 383% for the the year 2013, but figures most businesses would be delighted with nether the less. *Looking below the figures (from February 2015), their UK bars are all holding their own against local competition. *One of their smallest bars, Leeds Corn Exchange turns over about £7,000 per week, whilst the larger regional bars such as Manchester, Birmingham and Liverpool are all taking at least £16,000. *It’s biggest turnover comes from their London branches unsurprisingly.with Shepherd Bush taking £21,000, way behind Shoreditch which trumps it with £27,000 per week.
Overall they take nearly a million pounds a month from their bars across the world, making up £11 million of their £30 million turnover. *This means their average bar takes at least £8,000 per week in the tills, a figure which is probably higher when you factor in bars which opened part way through the year. *No doubt the higher prices than you would pay at other nearby non craft beer pubs contribute to this turnover. *Taking their base price for Punk IPA, which from memory is about £4.25 a pint, and that this beer accounts for over 50% of their beer sales, this means each bar on average sells about 1600 pints per week when you taking into account food and snack sales.
Of course when you look at the higher turnover premises, it is no surprise that they are the bars which are the food and drink units, it is well know that wet and dry units increase their turnover and profits massively on their food margins if successful. **Their sales at Shoreditch, which is very much food and drink led are about what Marstons expect from their premium premises, so they are definitely competing with the mass market money wise.
Back to looking at the beers, their normal strength beer dominates sales with 92 pints in 100 being beers such as Punk IPA, 5AM Saint, Dead Pony Club and Fake Lager (you might know it better as This is Lager in Wetherspoons). *This is Lager / *Fake Lager make up nearly 6% of their beer sales, which means Wetherspoons are giving them probably close to £1 million per year for the beer. **That is the story of Brewdog last year in numbers, lets step back and look at the bigger picture.
I asked the question a few weeks ago regarding when Brewdog will have to make the choice of craft or mainstream when they reach critical mass, my view on this has changed. **Profit growth will continue to slow until it becomes a steady figures somewhere in the teens, size comes with costs, salaries and overheads and this will bite into those huge profit jumps. *The key is whether the owners push to try and recover bigger profit growth as a priority or accept this steady growth as the sign of a stable mature company. **If they choose the latter with care not to over saturate the country with Brewdog bars, and prioritise the quality and range of beer up, then there is no reason why they cannot stay “craft” but sell big. *If Martin Dickie or James Watt ever sold up to commercial investors, that badge would be off in an instant, these two and the “Punks” in the Equity for Punks share issue program are the key to not slipping into the mainstream camp.
As you see in the USA, size is not the definer of “craft credentials”, but it is the brewers ethos in the eyes of the public and who owns the company (there are strict rules to being in the USA Craft Club, Goose Island is no longer craft beer now it is owned by Molson Coors). *As I said 2 weeks ago, craft beer is a lot more mature in the USA than the UK, it is one of the few times it is sensible to look at the states to see how market can grow and survive with it principles intact.

More... (http://www.seanliquorish.co.uk/blog/?p=1840)