Is it any wonder they're in the DOG HOUSE
These two ‘punk’ brewers built their £1.8bn empire from beer... and outrageous PR stunts. But as former employees savage their ‘toxic’ management style...
AS the boss of a brewery that once produced a beer stronger than whisky, James Watt is more used to inflicting headaches than sorting them. The public face of BrewDog, the self-styled punks of craft beer, Watt loves nothing more than courting controversy by sticking two fingers up to the industry big boys.
His once-small Scottish brewery has muscled its way into the big time through a series of shock PR campaigns, including chartering a branded helicopter to drop taxidermied cats on London and selling beer called Barnard Castle Eye Test after the Dominic Cummings controversy last year – all designed to show they don’t give a XXXX what others think of them.
Edgy descriptions of itself as a ‘post-punk, apocalyptic, mother ****** of a craft brewery’ that urges its customers to ‘ride toward anarchy’ have helped push the firm’s carefully curated reputation as noisy outsiders.
To date, it has appeared to be a brutally successful strategy. From its foundation in 2007 by Watt and schoolfriend Martin Dickie, it has grown rapidly into a multi-million-pound business, supplying pubs and supermarkets, and building a chain of bars, with 92 sites around the globe. It also has four hotels after opening ‘the world’s first craft beer hotel’ in Ohio in 2018 and now has 2,000 staff.
Its super-slick website proclaims the company’s charter, a cultish mantra studded with emotive phrases. ‘We are on a mission to make other people as passionate about craft beer as we are,’ it states. ‘We bleed craft beer... We blow sh** up... Without us, we are nothing. We are BrewDog.’
Strong words, indeed. But recently, other, equally strong words have been applied to the company by a growing band of disaffected former employees, who accuse it of fomenting a ‘culture of fear’ and a ‘toxic attitude’ of sexism, bullying, harassment and violence.
An open letter, purporting to be signed by around 300 people – some anonymously, they say, out of fear of reprisal – claims that BrewDog’s fast-paced success story hides a ‘rotten culture’ which has left a ‘significant number’ of former staff ‘burnt out, afraid and miserable’ and lays the blame squarely at the door of its CEO.
DIRECTLY addressing Watt, the letter from a group calling itself Punks With Purpose (PWP) – playing on BrewDog’s fondness for the word Punk – states: ‘Your attitude and actions are at the heart of the way BrewDog is perceived, from both inside and out. By valuing growth, speed and action above all else, your company has achieved incredible things, but at the expense of those who delivered your dreams.’
The fallout from this savage mauling, which has come as the company continues to prepare itself for a vital stock market flotation expected this year, has left Watt with an unwelcome hangover.
‘It’s been a tough few days for business, there’s no doubt about that,’ he told the Mail this week. ‘We’ve received feedback from former colleagues about their experience of working at our business and it’s very clear from that feedback that we let these colleagues down. That feedback was tough to hear, I’m sure that feedback was tough for people to share with us so we thank them for sharing the feedback.
‘We’ve got thousands of colleagues with positive stories to tell but from this feedback it shows that on many occasions we simply haven’t got things right as an employer and we’re genuinely sorry for that, we apologise to these people who didn’t have a positive experience with us and we’re going to take the opportunity to listen, to learn and to act and look to see how we can use this to build a better culture, a better company and be a better company going forward.’
Such appeasing words, which could have come straight from the pages of a budget hotel chain’s customer relations manual, will surprise those more attuned to the brash talk of a man who once rode a tank through the city of London to drum up interest in a crowdfunding scheme and had his naked image projected onto the Houses of Parliament as a marketing stunt.
But today Watt is not looking to channel his inner Johnny Rotten. In a soft Aberdeenshire brogue that seems to drift upwards at the end of each sentence, making statements sound like questions, he added: ‘I was surprised because I know a lot of these people personally, I’ve worked very closely with a lot of these people and I would have hoped... if they had some issues the first thing they would have done was get in touch with me to discuss those issues.
‘I think we always have strived to be the best employer we possibly can be, we do some fantastic things, from sharing 10 per cent of our profit evenly with our team to being a real living-wage employer to giving people sabbaticals and focusing on internal progression within our company.’
He points out that some of the signatories had left the business some years before – some as long ago as 2013 – but dismissed notions that could imply the problems are long-standing.
‘I don’t think it’s representative of our company today. We move at pace and a lot has changed during that time but we don’t get better by taking that attitude.’ But these are very damaging allegations, surely? Why isn’t BrewDog biting back?
ITHINK we don’t get better by going for a tit-for-tat and contesting individual things they’ve said about us. For instance, they mention nobody’s taken paternity leave but if you look at our records, over 70 people have taken it. But we want to use this as a learning experience.’
He has issued an apology by way of social media for any past ‘mistakes’, but another tweet suggesting that the company’s ‘fast-paced and intense environment is definitely not for everyone, but many of our fantastic long-term team members have thrived in our culture’, has only served to inflame his critics at PWP.
For now, an uneasy stand-off persists, although Watt has vowed to include PWP in efforts to improve the company culture. He accepts the firm’s rapid expansion, which PWP pinpoints as the root of the problem, has been a steep learning curve, but insisted it would continue because that was ‘in our DNA’.
Hardly surprising from a selfconfessed ‘control freak’, who once said, ‘from day one this busi
ness is going to be a complete global success, or it’s going to crash and burn. But that’s fine because the space in between is boring’.
It is just 14 years since Watt and Dickie, schoolmates from Peterhead Academy, set up BrewDog with their life savings and a £20,000 bank loan.
They shared a flat as students in Edinburgh, where Watt studied economics and law at Edinburgh University and Dickie learned brewing at nearby Heriot-Watt.
After university, Watt went to work as skipper of a North Sea fishing boat, while Dickie worked for an English brewer. They would meet up and complain about their distaste for mainstream beer and eventually took the plunge to strike out on their own.
Watt’s wealthy father, who had a share in a fishing boat, acted as guarantor of one of the early business loans.
When the banks stopped lending during the financial crisis, they turned to their thousands of enthusiastic customers and through their crowdfunding programme, Equity for Punks, they have raised millions.
Hard work, innovation and a talent for self-promotion did the rest. ‘Growth at all costs’ was how the open letter put it, ‘and the fuel used to achieve it is controversy’. Studying their track record, it’s hard to argue against the second point.
WHILE it has loudly engaged in progressive issues, such as gay rights and climate change (it claims to be the world’s first carbon-negative brewer), some eye-catching gestures have done as much to amplify the BrewDog brand as to garner attention for good causes.
A ‘protest beer’ mocking Vladimir Putin’s homophobia deployed uncomfortable tropes about homosexuality, while a Pink IPA – a mock ‘Beer for Girls’ released on International Women’s Day 2018 to ‘expose sexist marketing techniques’ – backfired badly when one of its pubs refused to sell it to a male customer.
The Pink IPA was priced at 20 per cent less than Punk IPA to highlight the gender pay gap, but a male drinker was only able to buy the cheaper drink after telling staff that he ‘identified as female’. He later took the brewery to a small claims court and was awarded £1,000 after winning his sex discrimination case.
Even publicity shots for one of the earliest Equity for Punks share issues in 2009 featured a suited Watt and Dickie seated in leather armchairs and surrounded by a bevy of adoring, and provocatively attired, young women.
Watt has found himself apologising for stunts more than once, but with the benefit of the attention they generated already banked.
The PWP open letter cast doubt on whether some stunts took place as claimed, questioning whether the founders actually changed their names to Elvis during a battle with Elvis Presley’s estate over the naming of its popular Elvis Juice IPA.
Watt is adamant he did: ‘It was my colleagues that were handling it, but I remember filling out the forms and as I understand it the forms were sent away to the appropriate place for name changes. We were Elvis for two weeks and then changed it back.’
He added: ‘They also made some claims about our charitable contributions and it can be shown by our audited accounts over the last five years that we have made over £2million of charitable contributions.’
THIS was the first time any criticism seemed to needle Watt, who also admitted he feared for his business at the start of the pandemic when he had to lay off up to 60 staff and furlough many more. Tough decisions had to be made which had a ‘detrimental impact on our culture’, he said.
Now aged 39, he lives in Ellon, Aberdeenshire, where the main brewery is based, with his wife Johanna Basford and their two young daughters. An illustrator and creator of colouring books for adults, Basford, who received an OBE in 2016 on the same day her husband picked up an MBE, once let slip that to understand the man you have to recognise ‘he’s not troubled by self-doubt’.
For now, though, he is in full charm offensive mode. It may have something to do with a looming Initial Public Offering (IPO), or stock market flotation. BrewDog is estimated to be worth £1.85billion, with Watt’s 24 per cent share worth £440million and Dickie’s 20 per cent stake £370million. After Deliveroo’s recent IPO flop, the timing will be crucial.
And there is another partner on board. Four years ago, TSG Consumer Partners, a US private equity firm, bought a 23 per cent stake in BrewDog, for which it paid £185million. Cynics said the deal showed that BrewDog had sold out to faceless big business, but Watt rubbishes that. TSG is a minority investor, he argues, ‘completely about driving growth’.
TSG’s managing director, Blythe Jack, has been parachuted in as BrewDog’s first chairman, a necessary part of the IPO process. Watt points out that she was appointed before the open letter appeared, although he cannot be certain whether it was timed to have an impact on the flotation.
What he is sure of is that BrewDog is determined to grow, adding ‘the key thing is taking every opportunity to improve the business... and just keep making beers that we love and trying to do our bit to save the whole planet as well’. With such lofty ambitions, one wonders how long BrewDog will have its tail between it legs.