BrewDog Offers Another Investment Opportunity for American Beer Drinkers. Will They Go for It?
Scottish brewery BrewDog has rapidly emerged as one of the most contradictory voices in the craft beer world. The brand’s guiding ethos is one of fierce independence, embodied by their embracement of the word “punk,” as seen in their flagship Punk IPA. At the same time, BrewDog also likes to boast of its unbridled expansion as “the world’s fastest growing drinks brand,” including global aspirations that have led the decade-old company to open pubs and breweries around the world.
So how does BrewDog resolve this apparent conflict between its punk mythology and its international scope? In part, the brand points to its ownership model—known as “Equity for Punks”—which uses traditional crowdfunding methods to promote the direct sale of company stock to “people who love craft beer as much as we do.” BrewDog USA, the brewery’s American arm, has recently opened its second round of Equity for Punks USA (as opposed to the multiple rounds of Equity for Punks funding that have been offered in the United Kingdom). Depending on how you feel about BrewDog, it’s either an intriguing opportunity or a suspicious second dip into American pocketbooks.
For context, last August, BrewDog officially opened its first American brewery in Columbus, Ohio. That event was preceded by the company’s first Equity for Punks USA campaign which raised $7 million—a good chunk of cash, but significantly less than their original stated goal of $50 million. “When we closed out our last crowdfunding round in America, we had only just released our first beers from our state of the art brewery in Columbus,” BrewDog Co-Founder James Watt told us. “Awareness was pretty low, and despite that (and not even having any beer yet!) we still managed to raise over $7 million from 8,000 awesome craft beer loving people in America.”
This time around, BrewDog’s goal is significantly more modest—a mere $10 million—but their announcement behind the campaign was far more over-the-top: Watt, along with fellow co-founder Martin Dickie, rented a helicopter to fly over New York City and parachute a bunch of taxidermy “fat cats” down over Wall Street. The stunt was intended as “parodying the image of the greedy investment banker that BrewDog rails against,” the brewery wrote. (Because nothing sticks it to fat cats like showing off how you have helicopter money!)
But though silly stunts might be BrewDog’s way to get attention, giving the brewery your money isn’t a joke. It’s a real investment that comes with a 133-page Regulation A Offering Circular as required by the Securities and Exchange Commission. Yes, there are real potential gains: Some of the earliest BrewDog investors saw returns of about 2,800 percent last year. But though buying BrewDog shares also comes with a number of owner perks like discounts, free brewery tours, and special event invitations, investors also risk losing everything as well.
So what does BrewDog plan to do with your money? “For starters, we want to open bars all across the country,” Watt explained. “Our hit list for setting up a BrewDog home already includes Austin, Boston, Chicago, Cincinnati, Cleveland, Detroit, Indianapolis, Louisville, Nashville, New Orleans, Pittsburgh, The Bronx and Washington D.C.”
BrewDog also wants to expand its still nascent Ohio facility “to keep up with the demand from local fans” by buying a new automated kegging line to improve production and adding “a new beer-themed 500 capacity events venue … for craft beer weddings, conferences and festivals.” A sour beer production site similar to one recently opened in Scotland is also being discussed.
These are massive plans: Plans that in many ways make a relatively small goal like raising $10 million simply from “people who love craft beer” feel a bit quaint, especially for a company that, according to the Herald Scotland, is valued at somewhere in the neighborhood of over $2.4 billion. If BrewDog truly has enough demand to open outposts in 13 major U.S. cities east of the Mississippi—if brewery production supposedly can’t even keep up—why do they need that kind of investment anyway? Shouldn’t organic growth be enough? At the very least, at some point, shouldn’t the scope of BrewDog’s business better inform the language they use to sell their stock?
Contradictorily enough, though BrewDog’s latest New York stunt was meant to distance themselves from “the image of the greedy investment banker,” in some ways, it’s telling as to where the brand’s mind has been focused recently. One might say that maybe BrewDog has been spending too much time hanging around Wall Street.