Beer lovers - BrewDog Equity for Punks

EKIMIKE

Beer lovers! BrewDog have commenced a new share issue.

We all know that beer and cycling are perfect companions so if you like a good slurp then get involved!

And if you do chuck some dosh into the pot, here is a referral code R565420 [/shameless plug]

PS I don't work for them. I'm just a hopeless beer nerd.

peat

then why do you care for their really unremarkable product?

BelgianBeerGeek

Thought I'd let someone else go first :P
They are really more style than substance. Some of their beers are downright undrinkable.
And now you can buy into the dream! Excuse my cynicism, I think I'll pass.

EKIMIKE

Fair enough. I don't really like their marketing (I certainly wouldn't say they have style) but think they do produce some nice beers. Although I agree, some of them are pretty pretentious and undrinkable.

On the other hand there could be worse advocates for good beer.

mr_goo

BrewDog. A great example of an excellent marketing programme of overpriced small bottles of beer to the younger generation of drinkers. Good luck to them. I prefer to drink decent beer;
Andwells King John
Sharps Atlantic
Orkney Dark Island
Flack Manor Double Drop

EKIMIKE

Judging by your list, when you say 'I prefer decent' beer' do you mean 'I prefer beautifully balanced English-style ales, preferably cask conditioned'?

All well and good but variety is the spice of life my friend. But maybe that's what you like and truly, that's hard to criticise!

When Garrett Oliver (esteemed brewer and writer) first set foot in an English pub and ordered a pint proper English cask ale, he said to himself: "I'm not sure if I like this, but I'll have another one!". That exploration - different flavours, different styles - is what I find exciting. So what if I wouldn't drink 60% of it ever again. The anticipation is fun and along the way you're bound to find something you love.

Oliver is a good example; he cuts through the pretense and talks straight. Watch this, he's got some great stories and takes some solid digs at the bloggers, raters and hipsters that everyone thinks of when you hear the words 'craft beer':

https://www.youtube.com/watch?v=J6dDgxtMDtc

A few rules to which I like to adhere when stepping into any given pub/bar/whatever:

1. (Where possible) start with something local
2 . Try something new

Bobbinogs

I was fortunate enough to be sat in sunny Penrith on Tuesday enjoying a great pint of Jennings Bitter. Now that really was £2.90 well spent (or rather £5.80 as I had another)

That Brewdog stuff...nah. Ordinary beer at best and hugely overpriced.

vimfuego

As above - the BrewDog stuff is just a victory for marketing and being "edgy" for the sake of it over actual substance IMO. Tried their "Punk" IPA once - foul stuff. Each to their own though I guess.

verylonglegs

Personally I've never tried some of their beers but speaking from an investment point of view then who cares if you like the product? In fact if some of you are saying that they are selling purely down to great marketing then you could argue that that re-enforces the case for putting your cash in if anything as there are plenty of over-priced products which have made people millions down to superior marketing.

ai_1

I quite like Punk IPA myself. The California ale not so much. 5am Saint is okay, don't think I've tried the others.
It's a good time to like beer, the selection in Ireland up until a few years ago was horrendous with it being difficult to get your hands on much besides Heineken, Carlsberg, Budweiser, Guinness, Miller, Corona, Smithwichs and a handful of other "beers" and "lagers" that hardly justified the names. There's now an enormously better selection of beers available. Many of these being very new craft beers absolutely packed with hops and others being more balanced and arguably more refined beverages. There are plenty I really like and plenty I don't. The one's I dislike aren't necessarily "bad" beers. I just don't like them. For example I'm not a fan of banana like flavours in my beer. Many beers have this character, some are excellently made and well respected beers - I don't like them.

verylonglegs wrote:

Personally I've never tried some of their beers but speaking from an investment point of view then who cares if you like the product? In fact if some of you are saying that they are selling purely down to great marketing then you could argue that that re-enforces the case for putting your cash in if anything as there are plenty of over-priced products which have made people millions down to superior marketing.

Good point!

RideOnTime

I am not a punk.
I am not Indian.
I am not Pale.
I am not Ale.

No interest.

Wake me up in 1977. :roll:

iPete

Unfortunately missed your code but have gone in for a few for the perks and out of curiosity.

Considering adding more as there is certainly the potential there, their growth is phenomenal and I do quite like the Punk IPA

awavey

verylonglegs wrote:

Personally I've never tried some of their beers but speaking from an investment point of view then who cares if you like the product? In fact if some of you are saying that they are selling purely down to great marketing then you could argue that that re-enforces the case for putting your cash in if anything as there are plenty of over-priced products which have made people millions down to superior marketing.

but isnt this the 2nd or 3rd time theyve raised money this way, I mean crowd funding to get a business idea of the ground is one thing, but to use crowd funding continually as you primary source of funding for your business expansion ideas like this... I get that you go to a bank borrow money and those guys earn interest off your idea simply by lending money, and if you can convince people to give you an interest free loan, thats better because then you make more money, but hold on your against the profit is king approach !?

so what are people really buying into a craft beer hotel ?? quadrupling capacity is there that much demand ? and more pubs which surely must be demarcated from the brewing side anyway so as to not lead to the whole thing crashing down if one part of the business went horribly wrong, which raises questions about how the whole setup is structured anyway and what you really get.

I kind of like Punk IPA,in small doses, and I say that as mainly a cask ale drinker but I do think their marketing approach is nonsense, their bars are overpriced and I havent much liked any of the ones Ive tried, there are better craft bars for sure, and they are sticking it to the mainstream by selling beer in Tescos.

so Ill give it a miss thanks

RideOnTime

EKIMIKE wrote:

Judging by your list, when you say 'I prefer decent' beer' do you mean 'I prefer beautifully balanced English-style ales, preferably cask conditioned'?

All well and good but variety is the spice of life my friend. But maybe that's what you like and truly, that's hard to criticise!

When Garrett Oliver (esteemed brewer and writer) first set foot in an English pub and ordered a pint proper English cask ale, he said to himself: "I'm not sure if I like this, but I'll have another one!". That exploration - different flavours, different styles - is what I find exciting. So what if I wouldn't drink 60% of it ever again. The anticipation is fun and along the way you're bound to find something you love.

Oliver is a good example; he cuts through the pretense and talks straight. Watch this, he's got some great stories and takes some solid digs at the bloggers, raters and hipsters that everyone thinks of when you hear the words 'craft beer':
WARNING

https://www.youtube.com/watch?v=J6dDgxtMDtc

Jesus, this is tedious sh1te

A few rules to which I like to adhere when stepping into any given pub/bar/whatever:

1. (Where possible) start with something local
2 . Try something new

verylonglegs

awavey wrote:

verylonglegs wrote:

Personally I've never tried some of their beers but speaking from an investment point of view then who cares if you like the product? In fact if some of you are saying that they are selling purely down to great marketing then you could argue that that re-enforces the case for putting your cash in if anything as there are plenty of over-priced products which have made people millions down to superior marketing.

but isnt this the 2nd or 3rd time theyve raised money this way, I mean crowd funding to get a business idea of the ground is one thing, but to use crowd funding continually as you primary source of funding for your business expansion ideas like this... I get that you go to a bank borrow money and those guys earn interest off your idea simply by lending money, and if you can convince people to give you an interest free loan, thats better because then you make more money, but hold on your against the profit is king approach !?

so what are people really buying into a craft beer hotel ?? quadrupling capacity is there that much demand ? and more pubs which surely must be demarcated from the brewing side anyway so as to not lead to the whole thing crashing down if one part of the business went horribly wrong, which raises questions about how the whole setup is structured anyway and what you really get.

I kind of like Punk IPA,in small doses, and I say that as mainly a cask ale drinker but I do think their marketing approach is nonsense, their bars are overpriced and I havent much liked any of the ones Ive tried, there are better craft bars for sure, and they are sticking it to the mainstream by selling beer in Tescos.

so Ill give it a miss thanks

I'm not saying people should buy, only that not liking the taste and thinking it's all down to clever marketing isn't necessarily a reason not to. Like you say, there are other things to consider. I'm not getting involved myself as the risk profile isn't for me.

Maybe it will be another Innocent smoothies, build up the brand for a while then flog it when the big corporate cheque turns up to buy it off them.

EKIMIKE

The FAQ on the BrewDog website states: "Our longer-term goal is also a full public listing."

Based on what they say, the last thing they want to do is sell up to one of the biggies like AB InBev, SABMiller or Heineken International. That said, I'm sure there would be plenty other interested private suitors beyond the brewing giants.

iPete

Whilst I'm largely invested for the membership benefits, there is potential for some return on these, whether your snob radar gets upset that they are sold at Tesco or not.

those who bought in its first funding round were able to cash in at a return of more than 500 per cent in a recent selling opportunity.

http://www.ft.com/cms/s/0/adb4daa6-e9dd ... z3YJ7oy3UL

This is unlikely to happen again based on the current sell off but if I can get membership benefits for a few years and get my money back or better, that's a good result.

And if good marketing concerns you, look at Apple.

Pross

I've never really been a beer aficionado and generally drink the mass produced lagers and bitters. However, I've tried a few Ales lately (had a few pints of Dartmoor Jail Ale whilst in Devon recently). Yesterday I had made first taste of 'craft' beer with Charles Wells / Dogfish Head DNA New World IPA which was a lovely pint (although £4.50 is pricey for Cardiff!).

rick_chasey

Wonder why they can't find more conventional sources of funding.

ai_1

Rick Chasey wrote:

Wonder why they can't find more conventional sources of funding.

Maybe they don't want to!

As mentioned by others, they've done a good job on marketing. This, I believe is part of the image they've been building.

rick_chasey

Ai_1 wrote:

Rick Chasey wrote:

Wonder why they can't find more conventional sources of funding.

Maybe they don't want to!

.

It's a lot cheaper.

EKIMIKE

This option fits the image - both in a marketing sense and stated principals of the founders - and builds brand loyalty. Plus they've done it twice before and it's worked out.

As mentioned above, the founders are seemingly adamant that they won't sell up to the big brewing corporates (AB InBev, Heineken, SABMiller, Molson Coors) which would ultimately be the 'more conventional' source of funding for a challenger brand in the brewing industry.

Internationally, it's a very consolidated market when you get to anything that sells any serious volume. Then in the UK the major brewers are either too small or they have a large pub company arm. The pub company market is fiercely competitive so the likes of Greene King and Marston's don't really have much appetite or resources for acquisitions. Plus BrewDog is going big on exports (65% of revenue last year, I think), which is way off the radar for the aforementioned brewer/pub companies that are heavily UK focussed. Specialists like Wetherspoons have no interesting in having a brewing arm - purchasing flexibility is their greatest strength.

I should imagine more conventional private equity investors would prefer a target they can build and then sell on to those big corporates. Wouldn't surprise me if BrewDog have had those kinds of offers and told them where to go.

rick_chasey

Think I mentioned it in another thread - Camden hell's beer did the same last month.

awavey

iPete wrote:

Whilst I'm largely invested for the membership benefits, there is potential for some return on these, whether your snob radar gets upset that they are sold at Tesco or not.
.

its not a snob radar, its that Brewdog set themselves up as being anti establishment, anti big business, they are they self proclaimed punks of the beer trade, and then they sell out to the biggest establishment supermarket chain as soon as they had a big cheque waved in front of them

how punk is that

iPete

awavey wrote:

iPete wrote:

Whilst I'm largely invested for the membership benefits, there is potential for some return on these, whether your snob radar gets upset that they are sold at Tesco or not.
.

its not a snob radar, its that Brewdog set themselves up as being anti establishment, anti big business, they are they self proclaimed punks of the beer trade, and then they sell out to the biggest establishment supermarket chain as soon as they had a big cheque waved in front of them

how punk is that

The Kurt Cobain's of the beer world? mind we all know how that turmoil ended..

awavey

EKIMIKE wrote:

Internationally, it's a very consolidated market when you get to anything that sells any serious volume. Then in the UK the major brewers are either too small or they have a large pub company arm. The pub company market is fiercely competitive so the likes of Greene King and Marston's don't really have much appetite or resources for acquisitions. Plus BrewDog is going big on exports (65% of revenue last year, I think), which is way off the radar for the aforementioned brewer/pub companies that are heavily UK focussed. Specialists like Wetherspoons have no interesting in having a brewing arm - purchasing flexibility is their greatest strength.

look Marstons just spent £25 million buying Thwaites...thats the same amount as the money BrewDog hope to raise by this share issue.

Greene King spent £774 million this year buying Spirit pub co, thats 2.5 times the amount BrewDog value themselves as worth.

I think both have the appetite, resources and international focus, Greene King beers are one of the few UK beers you find distributed worldwide, to buy Brewdog if they wanted, but they dont really have to because Greene King have an increasingly close partnership with Brewdog anyway, in fact Greene King just opened a "craft beer" pub in Cambridge, which is best described as Brewdog lite.

EKIMIKE

awavey wrote:

look Marstons just spent £25 million buying Thwaites...thats the same amount as the money BrewDog hope to raise by this share issue.

I doubt they would be interested in such a small share that offers such little influence. Plus Thwaites is a good brand fit for Martsons' current brands. BrewDog? Not so much.

awavey wrote:

Greene King spent £774 million this year buying Spirit pub co, thats 2.5 times the amount BrewDog value themselves as worth.

Just re-enforces the point that they're focussing on the pub company, rather than the brewing side. BrewDog is not a pub company, despite their bars making up an increasing proportion of revenue.

awavey wrote:

Greene King have an increasingly close partnership with Brewdog anyway, in fact Greene King just opened a "craft beer" pub in Cambridge, which is best described as Brewdog lite.

Pure speculation. But interesting.

Really, the point was: BrewDog isn't an obvious fit for either Martsons or GK, for various reasons, on all sides.

Do you honestly think any different?

mr_goo

The very mention of Marstons makes my heart sink. They bought my local brewery Ringwood. The quality of cask ale has become indifferent at times. Locally Ringwood Best was a fantastic session beer until Marstons.
Their idea of marketing is awful. They have changed the bottle branding to become more contemporary which actually makes their beers stand out less on the shelf. They have done the same with Jennings beers.
On the bright side, the head brewer left and went to Flack Manor in Romsey, their beers are great, and the Double Drop has taken over as the best local session beer in the New Forest.

rick_chasey

http://www.ft.com/cms/s/0/9bf9e1ac-ed99 ... z3YgM8GG00

Seems brewdog gave some misleading information.

For context, when Camden Hell's beer did the same (granted, much smaller scale), they valued the business at £75m, only to drop the valuation to £50m when they sold20% to private investors.

MountainMonster

Conventional sources of finance come with their benefits, and of course their drawbacks.

Crowd funding is a great way to spread the message, bring in low-equity low-interest finance to fund expansion and works great now-a-days. Many businesses are moving away from traditional lenders based on the 'crowd' part alone. In terms of what the campaign can offer, if even 20% of the people who see the opportunity invest, with a small proportion of non-investors simply buying the products to try, a smaller proportion will then return, increasing sales.

Crowd funding is great!

rick_chasey

MountainMonster wrote:

Conventional sources of finance come with their benefits, and of course their drawbacks.

Crowd funding is great!

Well yeah. Financially ill-educated 'crowd' investors don't notice stuff like knocking a third off valuations when conventional investors turn up .