James Watt, the 26-year-old co-founder of Fraserburgh brewery BrewDog, has a
clear recollection of his first encounter with alcohol. A former Scottish
junior swimming champion, he was 14 and competing in Edinburgh when his
roommate smuggled in two bottles of Hooch, the alcopop of choice in his day.
“We drank a bottle each. Then we decimated the hotel,” says Watt
matter-of-factly. “The curtains came down and we broke a bed. I was banned
from swimming competitions for the next six months and had to pay for the
damage.”
It’s an image that will feed the preconceptions of BrewDog’s many critics, who
believe that when it comes to alcohol, Watt is still as irresponsible.
BrewDog, whose products include Punk IPA, Trashy Blonde and Hardcore IPA,
has managed to ferment a row with everybody from the local council to the
Portman Group, the industry’s self-appointed watchdog.
Earlier this year, the microbrewery launched Tokyo*, said to be Britain’s
strongest beer, with an alcohol content of 18.2%. One 330ml bottle contains
the equivalent of six units of alcohol. Such was the outcry, it could have
been heard half way across the Atlantic. The health lobby condemned the beer
as “deeply irresponsible”. BrewDog’s response was to launch Nanny State
beer, with an alcohol strength of 1.1%. Watt posted a picture of the chief
executive of the Portman Group on the BrewDog website, alongside a
look-alike picture of Gollum from Lord of the Rings.
Then there was the infamous Speedball beer, named after the lethal cocktail of
heroin and cocaine that killed the actor John Belushi. It was outlawed by
the Portman Group for breaking the industry’s code of conduct. No sooner had
that battle been resolved than there was a tussle over the marketing of Punk
IPA. “This is an aggressive beer. We don’t care if you don’t like it,” reads
the label.
The company, established two years ago by Watt and his childhood friend Martin
Dickie, is currently embroiled in a row with the local authority after
importing two large tanks onto land outside the brewery without planning
permission.
“We work on the principle that it is much easier to seek forgiveness than ask
permission,” Watt says.
Given the publicity, I am expecting to find a cross between Johnny Rotten and
The Terminator when I arrive at the grey, functional sheds that are home to
Scotland’s most notorious start-up. Watt, in ripped jeans, skinhead haircut
and shemagh, does not disappoint. But far from being a hop-headed punk, it’s
clear from the start that he is incredibly switched on. A straight-A
student, he studied law and economics at Edinburgh University, while Dickie
studied brewing at Heriot-Watt.
“We want to elevate the status of beer,” says Watt, talking 600ml to the pint.
“Beer in the UK is almost a dirty word. People go out and drink 10 pints of
some cold, industrially brewed, fizzy nonsense, eat a kebab and call that a
Saturday night. We wanted to change people’s perception.”
Perceptions have certainly been changed, though not necessarily in the way
Watt intended. There is, however, no escaping the fact that BrewDog is
achieving what the combined forces of the world’s biggest brewers have not.
It is shifting the demographic for beer-drinking into a younger age group
and opening up a new market for a drink that has been in decline for
decades. The problem with appealing to younger drinkers, however, is the
risk of appearing irresponsible, particularly in a community such as
Fraserburgh, where drug and alcohol misuse is endemic.
Watt points out that BrewDog was the first drinks company publicly to back the
Scottish government’s minimum pricing proposal for alcohol. He insists he is
as keen to tackle binge drinking as the politicians and believes minimum
pricing and improved education are the answer. How does he justify the 18.2%
Tokyo* brew?
“It wasn’t about creating an 18% beer just for the sake of it,” he says. “A
stronger beer gives you a much bigger canvas to work with. We added a
chocolate malt, cranberries, jasmine and we aged it in toasted French
oak-chips. If we’d done all these things on a beer at 6%, it would have
collapsed under the weight of these flavours.
“We made a tiny batch. It took a month to ferment. We had to add sugars and
yeast every four hours. It was like having a baby. Martin and I came in at
night and did shifts. A 330ml bottle of Tokyo* costs £9.99. You can buy a
bottle of vodka cheaper than that. Tokyo* was only for sale on our website
and in two speciality shops in the UK. It was for connoisseurs. From the way
they spoke about it, you would have thought it was on sale at every corner
shop for pocket-money prices.
“The Portman Group is funded by the big boys to look after the interests of
the big brewers. They should be going after the big guys who sell 24-packs
in the supermarkets for £9.99.”
Whatever his critics think of him, Watt certainly doesn’t lack bottle. Last
week he realised his most ambitious project to date with the purchase of a
derelict pub in Aberdeen. It will reopen in February 2010 as a BrewDog
establishment, selling only the firm’s beer. It is the first in a chain that
BrewDog plans to roll out nationally.
“Our plan is to become the Starbucks of the beer world,” he says.
For a company that has a turnover of £1.8m, it sounds like heady stuff. It
would be easy to dismiss Watt’s ambitions as just the beer talking, but
BrewDog has already attracted backing from Tony Foglio and Keith Greggor,
the drinks industry veterans who turned Skyy Vodka from a start-up to a
multi-million-pound brand. Foglio and Greggor took a 12.5% stake in BrewDog
for £600,000 in May and have been instrumental in developing the brand in
the US.
To fund its expansion plans, BrewDog is now offering 10% of its equity direct
to customers through its “Equity for Punks” scheme. The value of the company
has, theoretically, jumped from £4.8m to £23m in less than six months. There
is no dividend and no chance of cashing in the shares, which cost £230 each,
until 2012. Isn’t he in danger of ripping off his customers?
“Keith and Tony bought in at about £5m,” says Watt. “The land for the new
brewery, which is not on the balance sheet just now, subject to planning
permission, is worth about £4m. We’ve now gone nationwide. We’ve doubled our
capacity since Keith and Tony bought in and you have to take into account
the value that they bring to the brand.
“We’ve set up a US company and we’re setting up a new website that will allow
people to design their own beer labels. If you buy shares, you get a 20%
discount on our beer for life. ”
Although you do have to drink the investment. But Watt’s enthusiasm, audacity
and his incredible knack for marketing are more than just froth. BrewDog’s
rapid growth is due in large part to his unorthodox methods.
After six frustrating months trying to sell the beer locally and being knocked
back, Watt and Dickie targeted beer bloggers in the UK, US and Sweden. The
beer geeks loved the product and blogged about it extensively. It meant that
when Watt went knocking on distributors’ doors, the market was already
seeded and the product took off. It helps that their beers have won a clutch
of awards.
“Everything comes from our passion for beer,” says Watt. “Everything comes
back to what’s in the bottle.”
An only child, Watt, whose girlfriend is the Ellon-based artist Johanna
Basford, was always closer to his father than his mother. But relations with
his mother broke down completely when his parents divorced. During an
acrimonious court battle, Watt Sr, said to be worth £12m, was ordered to pay
his former wife £3.3m.
“It was a very messy divorce,” says Watt. “I tried to sort it out a couple of
times. I felt what she was doing through the courts was ridiculous. My mum
left my dad. For her to turn round and sue him for half a company he had
built up in the north Atlantic in the toughest of conditions was so unfair.
For the last six years, I’ve cut off all contact with her.”
Brewing was not the obvious first choice of career. Like many of his
Fraserburgh contemporaries, Watt was destined for the sea. His grandfather
is a lobster fisherman and his father, Jim, owns mackerel and herring
trawlers. Watt first went to sea at the age of six. He took his teddy with
him and was mortified when the fishermen found it. But it was the start of a
love affair. He worked in an office for just two weeks after graduating,
then quit and worked on boats, earning his captain’s certificate. He still
goes to sea for 10 weeks every year and employs several crew in the brewery.
When BrewDog created its India Pale Ale, Watt decided to authenticate it by
putting it on a trawler and taking it to sea for six months. “India Pale Ale
was shipped here,” he says. “The movement of the ship oxidises the beer. It
tastes authentic, the way IPA should taste.”
A natural risk-taker, he doesn’t think about the dangers of going to sea. “If
you thought about that you’d never do anything,” he says. “You’d never get
in a car. It is dangerous, but I’ve grown up with it. If you grow up here,
you just get used to it.”
Watt and Dickie, who had been friends since school, had shared a flat at
university, where they experimented with home brews. It was a chance
encounter with the late whisky and beer critic Michael Jackson that led to
the founding of BrewDog.
“He took one sip of our beer and advised us to give up our jobs and open a
brewery,” says Watt. “So we did.”
But despite his close relationship with his father, Watt was determined to
make his own way. “I was keen that he didn’t invest,” he says. “This is our
thing and I think we are clever enough to make it work by ourselves.”
He’s probably right. He certainly doesn’t need to be on a boat to make waves.
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