BrewDog’s change in strategy could mean last orders for craft beer drinkers

We’ve not got far into January, and yet we’ve seen even more seismic activity in a craft beer world that was already proving a particularly active category as 2023 came to a conclusion. Amid a disappointing number of failures in the sector came the shocking news that North Brewing Co had gone into administration (and thankfully subsequently been rescued). Whereas I’d not been overly surprised by the collapse of some of the poorly run crowdfunding-supported breweries over the past few years, the North news was more telling of the tough conditions in this competitive market.

My experience – for what it’s worth – suggested it was a serious and responsible operator. North was a star others could follow. The founders of the business were pioneers in the sector, having created the renowned North Bar pub in Leeds before craft beer bars even existed. Over the years, they’ve added a number of bars and taprooms as well as opening a brewery, which expanded out to an impressive £2.3m facility in 2020.

North Brewing Co

They have justifiably been garlanded with awards over the years, and on my visit to see co-founder Christian Townsley, found management and the operation very impressive. The administration was a result of debt liabilities that have mounted due to interest rate rises, recent periods of tough trading on the back of the cost-of-living crisis and rising operating costs. 

This demoralising news came alongside the announcement that Carlsberg had acquired a 20% stake in Danish-based brewer Mikkeller. So what, you might ask? In the craft beer revolution that has fundamentally changed the beer landscape – certainly in Europe – Mikkeller was arguably the leading architects of the change. When I visited it in 2015, there was a team of a mere eight people in a small office in Copenhagen, but it was producing hundreds of different experimental beers a year and selling them globally. This was possible through an asset-lite model involving outsourcing all production to a brewery in Belgium. 

Mikkeller was garnering column inches around the world celebrating its radical, and successful, new approach to brewing. Needless to say, on this same trip, when I visited the brewing team at Carlsberg, it could not hide its animosity to Mikkeller. The feeling was mutual. So, here we are in early 2024, and the enemy Carlsberg has taken a minority stake in its local upstart. No doubt it will follow the playbook of the earlier deals of Camden Town Brewery with AB InBev and Beavertown with Heineken in buying the remaining 80% at some point.

This represents the ongoing evolution of the craft beer sector. But, with respect to North and Mikkeller, their news is maybe not the biggest in early January for the brewing sector. We can generally rely on BrewDog for that, and it has delivered on it again. The news the company is to stop paying staff the real living wage certainly hit the headlines, but it was something else in its announcement that is more telling. It said the cost saving move was necessary to get the business back to profitability. 

Brewdog’s Equity For Punks scheme launched in 2015

This is a change in strategy, as I don’t recall the company previously making such references. The strategy since BrewDog received a £213m investment from private equity firm TSG (in exchange for a 23% stake) in 2017 has been all about top-line growth, and the business has failed to make a profit since that date. As part of the deal, TSG received an 18% compounding coupon that has so far earned it a total of more than £600m, which BrewDog now owes. This payment will be made when the brewery is either bought in a trade sale or undertakes an initial public offering. 

The fact BrewDog is now talking about profits represents a change in the narrative that could be the precursor to TSG initiating a course of action that, seven years into its investment, will enable it to take out some money out for its investors. The problem for the tens of thousands of Equity for Punks investors that have funded BrewDog’s growth to date is that they could be wiped out. 

With the value of TSG’s investment currently worth almost £680m – representing a rise in the value of its shares from £13.18 to £42 – a deal or float would need to be valued at a hefty £2.9bn for all other shareholders to make any sort of return. This is a fanciful figure in the brewing sector – as it would represent seven times its annual sales of around £385m – and suggests there is much more pain to come for shareholders. 

The craft brewing revolution has long since passed its honeymoon period, and North Brewing and Mikkeller highlight how things have moved on – sometimes with plenty of pain. But it could be the poster child of the sector, BrewDog, that potentially takes things on to the divorce stage for the industry and craft beer drinkers.

Glynn Davis, editor of Beer Insider 

This piece was originally published on Propel Info where Glynn Davis writes a regular Friday opinion piece. Beer Insider would like to thank Propel for allowing the reproduction of this column.


  1. Glynn Davis on 8th February 2024 at 8:40 am

    Interesting connection you’ve sort of created.

  2. Glynn Davis on 8th February 2024 at 8:39 am

    The cyclical nature of business.

  3. Glynn Davis on 8th February 2024 at 8:38 am

    Unfortunately so.

  4. Daryl on 7th February 2024 at 9:46 pm

    Suprise surprise I’ll never see anything back from my investment :/

  5. Mr.B.Sebborn on 7th February 2024 at 6:32 pm

    Brewdog were the trailblazers for craft beer along with Beaverton and Tiny Rebel.
    Sadly their success got the big boys frothing at the mouth and suddenly the main theme at board meetings was takeover,takeover,takeover.
    Gradually brands have been dropped along with abv’s and prices increased and breweries closed.This has resulted in the craft bubble bursting. As with all new successful trends they gradually get sucked into the establishment and things are never quite the same against but it was great fun while it lasted.
    Long live the small fry artisan entrepreneurs !

  6. Nik on 7th February 2024 at 5:03 pm

    Poster boy?
    Yeah, them and Malcolm McLaren.

    Any of this sound familiar?

    1. How to manufacture your own group

    2. Establish the name Sex Pistols Ann

    3. Sell the Swindle

    4. Do not play, don’t give the game away

    5. How to steal as much money as possible from the record company of your choice

    6. Become the world’s greatest tourist attraction

    7. Cultivate hatred. It’s your greatest asset.

    8. How to diversity your business. What a business.

    9. Taking civilization to the barbarians

    10. Who killed Bambi?

    The great craft beer swindle

  7. Glynn Davis on 7th February 2024 at 4:00 pm

    Thanks Simon. I think despite what you say, they are still the poser child – for many people. Fingers crossed Preston is not on the runway.

  8. Simon Gooch on 7th February 2024 at 3:49 pm

    IMHO Brewdog stopped being the ‘poster boy’ of craft beer a long time ago. Even in London the appearance of independent venues across the city means they’re no longer the only alternative to the Fullers, Greene King, Heineken, Shepherd Neme, Coors and Nicholson’s tied houses serving mediocre to awful beer.

    Their beers in every supermarket; on tap in Wetherspoons; core range brewed for them by Heineken due to capacity issues and of course, Watt owning a significant number of shares in aforementioned macrobrewery have all somewhat diminished their ‘punk’ ‘fiercely independent’ reputation and that’s before you take into account their venue’s phenomenally high prices and them directing punters to steal Guinness glasses from other bars to exchange for a free pint of Jet Black Heart.

    Thank goodness we’ve never had one arrive in Preston!