CA at the forefront of a craft beer revolution

By Robert Outram, The CA magazine

8 April 2015

Brewdog Finance Director Neil Simpson CA shared his mission to change the way the public thinks and drinks at a recent ICAS event in Glasgow.

"It's not about the money." That may seem like an unlikely statement from a chartered accountant, but Neil Simpson CA is finance director of a company with a very distinct philosophy: BrewDog, Scotland's largest craft brewer.

Speaking in Glasgow at one of the ICAS Business Insights series of talks, Neil Simpson said: "Our mission is to make other people as passionate about craft beer as we are. The money is important, but it's not the reason we are doing this."

Brewdog is the highest profile business on the front line of a crusade to change the way the public thinks and drinks. Founders James Watt and Martin Dickie started brewing in 2007 because they found that the kind of beer they wanted to enjoy simply wasn't commercially available.

They started in a garage, brewing for themselves and the friends, and moved on to selling their beer on market stalls. The big breakthrough came when Tesco's buyers, impressed by the samples they'd tasted, put through a significant order.

Watt and Dickie managed – somehow – to get bank finance to back the investment they needed to increase their production and bottling capacity, and the business started growing at an exponential rate. By 2014, BrewDog was employing more than 300 people and turning over around £30m, making around £4m profit.

'Feisty' approach to business

BrewDog's feisty approach to business – the founders and staff are not slow to voice their opinion of the bland mass-produced beers that dominate the drinks sector – helped to create a high profile without spending a fortune on advertising.

Some of BrewDog's creations, like the 18 per cent strength "Tokyo" or "The End of History" (each limited edition bottle sold in a stuffed squirrel) gained fame or notoriety. Meanwhile, however, its more mainstream beers like "Punk IPA" and "Dead Pony Pale Ale" were selling in large volumes, at home and abroad. BrewDog also now runs its own bars, in the UK and as far away as Sao Paulo and Tokyo. Parking a tank outside its first London bar only helped to raise the company's profile even further.

Crowdfunding model

As Neil Simpson explained, this unconventional business turned to an equally unconventional route to raise funds. In three rounds of fundraising between 20110 and 2014, BrewDog used a "crowdfunding" model to recruit around 14,000 shareholders, offering not only a stake in the company but also discounts on its beers, online and in the chain of BrewDog bars, as well as early access to new beers before their general release.

Simpson, initially a partner with Ritson Smith in Aberdeen, was an adviser at the start of this process. In 2012 he joined his client as FD.

He said: "Having seen it first as adviser, and then executing it, probably the hardest thing [in raising equity through crowdfunding] is verifying every single line with supporting data. For example, even describing our beer as 'awesome' had to be supported by objective sources."

He added: "Raising equity through crowdfunding is more challenging than other forms of crowdfunding – and the rules introduced in 2014 have not made it any easier!"

Craft beer is growing fast at a time when overall beer volumes are falling around the world. Simpson said he does not fear the competition from the increasing number of small craft brewers in the market – in fact, he said, "We'll stock their beer in our bars if it's good enough."


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