How One Bar Brand Seeks International Success

Brew Dog, the creator of Punk IPA and Sink The Bismarck is opening outposts in Stockholm and São Paulo.


Powered by Guardian.co.ukThis article titled “BrewDog to open bars outside the UK” was written by Sarah Butler, for The Guardian on Thursday 21st February 2013 17.43 UTC

BrewDog, the independent brewer that at one time made the world’s strongest beer, is to open its first bars outside the UK this year as it cashes in on a growing interest in locally brewed ales.

The Aberdeenshire company, which makes craft beers including Punk IPA and Trashy Blonde is to open bars in Stockholm in Sweden and São Paulo in Brazil and potentially two other locations. Another six bars will be added to the UK chain of 10 after BrewDog opened a £7.8m new brewery to cope with demand.

James Watt, co-founder, said: “More and more people are becoming frustrated at the lack of choice in the UK beer industry which is dominated by faceless corporations making lowest-common-denominator yellow liquid.”

As part of its attempt to challenge mainstream brewers it fought a kind of alcohol arms race with a German brewery, Schorschbräu, to claim the world’s strongest beer, which culminated for BrewDog in 12 bottles of a 55% beer it named “The End of History” – Schorschbräu later took back the crown with a 57% ABV beer less creatively named Schorschbock 57.

He said BrewDog’s bars offer more choice of beers from a selection of brewers from around the world alongside its own beers, which it claims pack more flavour than mass-produced rivals. It tries to employ knowledgeable staff and holds tasting sessions where drinkers can learn about the process of brewing. “We want to elevate the status of beer,” Watts said.

BrewDog is part of a new wave of breweries springing up in the UK making “craft beer”, a loose term for more strongly flavoured beers produced by enthusiasts, usually on a relatively small scale. Summer Wine Brewery, Thornbridge Brewery and Camden Brewery are all generally agreed to be part of the movement which accounts for about 5% of UK beer sales, according to Euromonitor. The definition is hotly debated, as craft beer can be bottled and pasteurised, unlike real ale which is always brewed in the traditional way and served straight from the cask.

On Friday about 1,000 buyers and from pubs and major retailers including Sainsbury’s and Waitrose will attend the Craft Beer Rising festival at the old Truman Brewery in London’s Spitalfields. The following day the festival will host 2,000 London hipsters who will sup on beers from Thornbridge, Brewdog and Crewe-based Michelle Kelsall’s Offbeat brewery – alongside major brewers’ versions of craft-type beers.

Daniel Rowntree, the organiser of the festival and publican at The Old Nun’s Head in Nunhead, south London, said he had launched the event after recognising a surge in demand for interesting local beers. “The general customer is getting excited about this, it’s not niche any more,” he said.

Even the traditional pint-suppers at Camra, the Campaign for Real Ale, welcome the interest. “It’s exciting to see more young, trendy 20-somethings getting interested in beer. While beer isn’t always real ale, a vibrant British beer market that offers choice can only be good for consumers and British pubs,” said Tony Jerome, Camra spokesman.

Sales of real ale have been boosted, rising for the first time in 20 years in 2011, with 1.6% more drunk than the year before. Last year sales are thought to have levelled out but real ale continues to outperform the wider beer market which has been hit by the economic downturn.

Pubs may be closing at the rate of 18 a week but there are more than 1,000 microbreweries in Britain, according to Camra, with more than 160 opening last year.

A new breed of pub catering for trendy young beer fans is springing up, such as the Craft Beer Company, which now has four bars, and the Euston Tap in London.

Canada-based brewing giant Molson Coors UK has said that the craft beer market grew 13% year-on-year in the UK in 2012, and doubled in Ireland.

Europe is following a trend in the US where craft beer sales nearly doubled between 2007 and 2012 to $12bn, according to market research firm Mintel. Over there the beers are most popular with 25 to 34-year olds, raising hopes that the trend will foster a younger generation of pint fans.

Molson Coors is one of several major brewers now interested in the market. It set up a craft beer division to oversee its investments in Sharp’s Brewery in Cornwall and William Worthington’s microbrewery in Burton-upon-Thames as well as Ireland’s Franciscan Well craft beer brand which it invested in last month.

BrewDog is one of the stars of the movement in Britain. It set up with a £20,000 bank loan in 2007, now has sales of £12m and expects that to rise to at least £18m this year. It exports to 32 markets having just started selling to China. South Korea and Germany, Europe’s biggest beer market, are next on the list.

The company raised £7.5m to support its expansion by selling shares to its fans online in two crowdfunding exercises in 2009 and 2011. Shareholders were told not to expect a dividend for a few years while the company invested in expansion.

There are no plans to raise further cash in 2013 but Watts said the company would turn to its shareholders – which it refers to as “equity punks” – in future if it needed further funding.

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