Tuesday 27 October 2015

Equity for Punks Revisited

Back in 2009 I became somewhat infatuated with a small but up-and-coming brewery called BrewDog. James Watt managed to capture my imagination with his promise of change within the beer industry. Personal circumstances conspired the night of the launch of Equity for Punks and I found myself with a maverick attitude. I parting with £230 for a 50p share in BrewDog. I forget the exact proportion of the equity up for sale, but whatever, I had bought a little bit of a brewery and at the time that cheered me up when other stuff was properly getting to me. I had been slowly getting tired of running a pub, and the drab "Real Ale" scene that felt like it was restricting progression of beer.

I spent the next few days, weeks even, justifying my purchase. Many people were very quick to point out that BrewDog had grossly overvalued themselves. However, I believed then, as I still do now, that the boys have a very powerful formula that was bound to find some sort of success; I wasn't purchasing their current value, I was buying into a promise of bigger things to come. If the bigger things didn't happen, at least I bought into a concept that was worthy, part of a change in the beer world that was needed, and possibly still is.

I only took brief notice of the second round of their crowd funding concept. It seemed by the valuation at the time that I might have doubled my money, but I really couldn't be bothered to do the sums. I had by that time moved Hardknott to its current location and my association with BrewDog seemed to me to be bringing me more embarrassment than benefits, so I decided to pipe-down and just get on with the job of growing my own brewery, even though there were times I overtly used similar tactics.

BrewDog became increasingly controversial, and annoyed more and more people, whilst at the same time creating such a buzz that the whole thing appeared unstoppable by nearly anything, even the most annoying PR stunt. I thought at least if they continue to grow the sceptical critiques would be proved wrong.

Equity for Punks 3 was at a time I was trying very hard to force Hardknott, and my own PR machine, to distance from BrewDog completely. I really have no idea what went on. I'm still unsure if the distance between us is good or bad, but equally, it became clear that BrewDog cared much less about me too.

What did happen, at some point in time, was that my single share was converted to 10 shares, each with a nominal value of 5p. The 5p shares seemed to be selling at that point for £95. My shares then seemed to be worth £950. Not a bad step up for the £230 I initially invested.

On looking, finally, at Equity for Punks 4 it became clear that this really had been a freight train that is quite unstoppable. The new shares are being sold at £47.5 each. BrewDog have raised over £10m already and are hoping to get to £25m in total.

When completed the new shares will be 1p shares. My 10 shares will also be converted into 1p shares and I'll have 50 of them. At least that is my understanding. My original investment of £230 seems to now be worth £2,375. A ten fold increase in 6 years. Of course, what it will mean if they fail to raise £25m I don't really know, but it still looks quite good from my point of view.

I was uncertain about writing this post. As I've indicated, I'm now in a place where I want Hardknott to succeed because we are who we are, not because we are someone who has simply copied off BrewDog. Equally, now that I have my own brewery, and BrewDog has grown beyond any projections even I would have believed, they are on the verge of being a multinational monolithic conglomerate they rail against. I've felt that there is now a tension between us that is barely tangible, but clearly we are viewed as a threat, rather than an ally. It's a shame, but not surprising I guess.

I console myself with the fact that whatever we do, and whatever our honesty in the way we operate, I have at least gained some growth in my investment with BrewDog. If we were to do the same, and go to the crowd for funding, we'd certainly not be as brash, audacious, or actually even slightly devious. The fact we don't lie to the banks, or our customers, or are quite as all out ballsy as those guys, and as a result are more content in making our own way might not bring us quite that same world domination. If we went to the crowd we'd probably be looking for people to support us because we are not going to be so controversial, but at the same time, we could not expect to make quite such dramatic gains.


I did a number of posts around the time of the whole launch. It was, I have to admit, quite exciting. I have never regretted forking out £230, even if sometimes I did wonder if I would see the cash again. Check out the posts below.


Thursday 15 October 2015

Azimuth storms several wins at SIBA

Winning awards is something that brings real pleasure to a brewery. When you've worked, as a team, to build the quality and consistency of the beers to a height that you believe is worthy of an award, it is satisfying to get confirmation from the judges. Yesterday was something of a triumph for Hardknott.

There are a few things I like about the SIBA awards, but one of the main things is that the judges, by and large, are industry people and brewers from other regions. There are obvious controls in place to ensure no one associated with the beers are judging them, and there is tight control around the double blind systems1.

Equally, the beers presented are what the brewer wants to show off. It's a frustration I have with CBOB, for instance, that we seem to fail to even get off the ground, despite obviously having simply top-class beers.

But never mind, at the North West SIBA competition, running off the back of The Bolton Beer Festival, we won a few awards. To say we are delighted would be a huge understatement. I think the SIBA awards, although less well known, are far more prestigious. By the industry, for the industry.

Anyway, Azimuth got Gold in the strong bitters and pale ale small pack category, netting us a swanky glass trophy. It then went on to win Bronze overall in the small pack section2. This ensures we will be in the National SIBA final at BeerX.

Nuclear Sunset gained Bronze in speciality beers small pack.

Azimuth also gained Bronze in cask for strong bitters and pale ales.

Interesting that Azimuth only got bronze in cask. I could point to the fact that I think the extra carbonation in bottle, or in keg for that matter, lifts the aromas in Azimuth. It could just be that there were more entries (over twice the amount) in the cask section. Either way, there are some good beers that we beat, so I'm pleased.

To get a gold, and following on to a bronze overall is a testament I think to the quality of out brewing and our diligence to bottling process. From a pure financial point of view, having our own bottling line is dubious. However, we have full control over quality, the beer doesn't travel far and our determination to not sterile filter, and so we maintain flavours, ensures a superb end result. And the results of this competition are the proof.


1This isn't always the case, and there have been ructions, quite rightly at SIBA meetings, as a result of problems. However, I believe that where these problems have been spotted, aggrieved brewers are quick to jump in and point out that it isn't fair and transparent ensuring a good competition. Run by brewers, for brewers. We get het up when we even imagine someone else is getting an unfair advantage.

2Small pack refers to either can or bottle. At the moment, in SIBA competitions, there are not many brewers who are entering cans. There were none, I believe, in this region. Glass, for now, seems to still be the preferred package.

Tuesday 13 October 2015

Where is the real danger?

There are people that think the threat to cask beer is a thing. Others worry about British hops. And there are those that panic that a 50 year old, and largely inefficient and past it's best breed of malting barley being left behind is a huge issue. Some people feel that buildings that are old, draughty, have shitty cellars liable to flooding and often quite disgusting are things worth saving for the good of beer in general, despite the fact punters don't really agree and stay away in droves.

But I'd ask you to think again.

We are a tiny brewery. We struggle to find ways of getting our beer efficiently to the places people drink it. We are remote and really need the help of distributors to get it fairly much out there. But there is a problem, a huge and nasty problem.

The big boys.

"We've got both types of beer in here, Bud AND Bud Light"

Today we here of the agreement in principle to AB Inbev and SAB Miller joining forces to make the biggest beer producer in the world. A global domination that is huge, and to be honest, quite scary. 30% of all beer in the world will be made by one, big, nasty, aggressive and domineering conglomerate. Around 1/3 of all beer will be made by an organisation that doesn't actually care about beer at all. A business that thinks beer can be bought and sold like a commodity, and cares nothing about you, the beer drinker.

Now, you could say, so what? Why does it matter? After all, Craft Beer is booming, there are breweries opening up all over and there is more choice in craft beer bars and independent free houses all over the UK.

Well, yes, but, there are still many pubs, bars, restaurants and the like where the beer choice is narrowed down to a few major beers. Practices that are restrictive are reported to be occurring in USA. I am sure, due to resistance I feel, that the same practices are occurring over here. It might be somewhat less obvious and in a cleverer and less obtrusive way. But equally, a perspective on that could suggest conspiracy. After all, There's A Beer For That.

I think the big beer producers, and their watery, bland, uninteresting beer, along with their nasty, restrictive and domineering control of supply chains are inhibiting great beer getting to great people like you.