TheMissingDrink

1) You have recently criticised both Lagunitas and Ballast Point for selling out, and have stated that you will no longer buy their beer for your bars. You have advocated for a definition of craft beer which includes a 20% maximum ownership by breweries not themselves craft.

My question is: How do you reconcile that stance with BrewDog’s position?

You will be expanding to 400,000 HL in Ellon, and building a brewery in the US, so I assume you will produce more than 500,000 HL (the limit for a craft brewery in your own original definition posted here https://www.brewdog.com/lowdown/blog/defining-craft-beer)

So you will soon not be a “craft” brewery, yet own 23% of London’s Brew By Numbers. Doesn’t this strike you as a bit hypocritical? Aren’t you just moving the goalposts by dropping the arbitrary size requirement?

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2) How would you respond to people who would say that you have rewarded bond holders financially (with interest), yet shareholders have very little to hope for by way of return on their investment?

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3) A US based brewing facility was last on your list of priorities in your share prospectus. Work has begun on that facility - where are you with the higher priority sour beer production and craft distillery?

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4) You recently launched No Label, “the world’s first transgender beer”. Given that this beer is not the first to use the transgender hop Jester, how would you respond to the statement that the only difference between it and other Jester-hopped beers is that you have given it the very label it apparently rejects? Doesn’t the inclusion of this issue as a buzzword trivialise such an important subject?

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1) So what I said about moving the goalposts then? Great to hear that independence is important to you and that BBNO will have benefitted from your support. That is encouraging.

2) Shareholders did indeed make money, but will shareholders that bought during EFP4 make as much? With deals worth $1 billion flying around, they might I suppose.

3) A pretty capitalist answer for such a punk business. But totally fair enough. Who wouldn't have done the same?

4) Neither is it the world's first Kolsch, so same question.

Thanks for your replies!

Many thanks for taking the time to answer all my questions!

1) Any plans to maintain some sort of development fund, maybe as a loan, to help fledgling breweries?

2) After the Ballast Point sale, I'm even reconsidering my original position on your value (which you may remember commenting on here http://themissingdrink.com/investing-in-brewdog/) Are you not worried that the bubble will burst, and your chance to sell at the optimum moment will pass by?

3) Now that your people includes 18,000 Equity Punks, will you start investing in them (and other non-equity customers)? Maybe offering Cicerone courses at BrewDog Bars?

4) As another poster mentioned, the fact that you created a beer as transgender has come across as a PR move. Is there anything you regret about the way it was marketed? Would you do it differently, without making the beer a transgender caricature?

The Lagunitas deal is probably the most interesting, because the deal leaves it 50/50 owned between Lagunitas and Heineken. Neither holds a controlling interest, making it one of the only "strategic partnerships" (buy outs) that is truly a partnership. The original team are still running the place, just with access to Heineken's resources (economy of scale), distribution network, and their financial backing.

Your definition gets a bit complicated when you consider "crafty" beers, eg. Blue Moon, which are created by the big breweries in order to corner as much of the craft market as possible. Imagine Justin Bieber marketing his album as "alternative" - it would do well, because of his legions of followers, but fans of true alternative music wouldn't see it as alternative. But then what defines "alternative"? I think that's a really good way to look at it actually.

The problem with large breweries owning "craft" breweries is that the profits go back to a massive corporate entity, rather than artisans and craftsmen. Sure, some of them are making a fair bit of money, but they are not using that money to increase their share of the market in a hostile way. Craft breweries gain larger shares of markets by merit, not by buying in. That's the way I see it.