Brewdog valued at 1bn

[MyQul]

I just wonder how 'they' come up with a figure of 1 billion value for the company. Surely they havent sold that many bottles of steam punk?( @Robin54 do you know this might come about?)

 

[MyQul]

Here's my take on it...
They need the equity investment to expand into the states not having earned enough through the punk equity scheme.
They expand,share price increase,stock market float,gets bought out by inbev or one of the other monster firms,rolled in with the other mass market rubbish as a lower quality product ..
If you're a fan download the DIY dog while it's still there...

Deffo agree that if they are planning to expand into tge US market and make a big enough dent in that, they'll soon catch the eye of one of the mega corps and be swallowed up.

But wasn't Meantime bought buy ABinbev and they just said, 'carry on doing what you already are doing, we have no plans to interfere, even though we own you now'?

 

[Clint]

....for now. While they return the required % with calculated investment from the share holders they will generally be left or unless they get an offer they can't refuse.

 

[MyQul]

....for now. While they return the required % with calculated investment from the share holders they will generally be left or unless they get an offer they can't refuse.

It never ends well when a mega corp buys up a smaller company (you only have to look at cadburys and kraft's buy up of them).

For a product like beer you can possibly squeeze the means of production (shrinking the workforce, streamlining etc) to create more profit but as soon as you start compromising on fresh, top notch ingredients your doomed ( there so many examples of this). Mother nature certainly is not a capitalist

 

[Clint]

If bought out by the biggies it will be for only a couple of reasons. ..to develope until it becomes a worthwhile product to produce. At the moment it's in such low demand volume wise in the states they wouldn't bother getting their fermenter wet. Or to shut it.

 

[Robin54]

....for now. While they return the required % with calculated investment from the share holders they will generally be left or unless they get an offer they can't refuse.

I may be wrong but a lot of these investment companies don't have share holders as such. You just give them a big wodge of loot and they promise big returns on it. Its not like putting money into stocks and shares or the building society.

 

[Clint]

22% sold to a private equity company...equity company manages money from outside investors/companies or individuals usually set in a tied amount of time with a view to making them x amount of profit. So being part owners they will have an influence on the way things are run,the risks they take and future decisions. The investors will expect a dividend .

 

[Leon103]

I may be wrong but a lot of these investment companies don't have share holders as such. You just give them a big wodge of loot and they promise big returns on it. Its not like putting money into stocks and shares or the building society.

That's my thoughts. They invest in a company with an expectation to get certain % returns.

This isn't the first company to invest in brewdog and a number of similar breweries have recently attracted interested from investment companies such as dogfish head.

 

[Clint]

The equity company are the people who do the leg work for the investors. The equity company raise funds from investors with a promise of higher returns.

 

[naturals]

I'll bite! I'm a shareholder and was at the AGM over the weekend. I'm far from an expert but I've held shares in quite a few businesses as well as running my own company and having a piece of paper to prove I wasted several years of my life studying the subject.

£7m profit makes the husisnrss work �£1bn

I just wonder how 'they' come up with a figure of 1 billion value for the company

In a world where Snapchat is worth $28bn and last year turned a $515m LOSS, this is far from the craziest valuation that's happened in the last few months!

Stuffy, industrially brewed sums up what I tasted tonight. So much more exciting beer out their.

You're absolutely right. Dog F, Vermont V3, Tokyo* to name just three incredible beers I tried of Brewdog's over the weekend. As dad_of_jon points out, you don't get the cream of a breweries output on the shelves of the local supermarket.

Maybe its my tastebuds changing, but the punk ipa and dead pony, don't seem to pack the same hopppy punch that they used to

Interestingly, there are two recipes for Punk. Brewdog have actually just done a run of the original recipe which you can find on their online shop. I tried both over the weekend, and the latter (which has been brewed for the last five years or so) is infinitely more hoppy and drinkable. Sure, it is far from the finest IPA in the world, but it still packs a serious punch against 99.9% of other craft beers sold in the average pub.

private share holders expecting a year on year increasing profit from shares like most companies on the stock market I cant see how what you say above wont happen because the profits have to come from somewhere

They've been on the Times fastest growing companies seven years straight. They're the only business to have managed that feat *ever*. People like to speak down of PE and shareholders, but they won't look a gifthorse in the mouth. PE will take a slight delay in profits for the 97% growth Brewdog have seen in the last year alone. Interestingly the investment is mostly going on new capacity (a new brewery in the Far East and one in Australia). If anyone thinks Brewdog's only way of increasing profits is to cut the amount of hops in their beer, you're seriously underestimating that company.

Have been involved in a private equity company and the investors don't want 3% return but about 15% for the risk

Absolutely correct. My other half bought Brewdog shares a year ago to the day. Her investment has not far off tripled in that time - off the back of one brewery. I'm sure TSG will be happy with that performance going forward when they have four online. James and Martin spoke about their capacity issues over the weekend. Ellon is huge (and has had massive investment this year). Columbus is another level massive. Even with this investment they're going to run out of capacity again by the end of 2018.

The best bit I think is they have no product exclusivety. ...having published all their recipes. ..

Firstly, having tried a few of their recipes, they're not exactly easy to replicate 100% from the information they've published. Secondly, an hour spent on HBT and you'll find clones of just about every beer in the world (Sculpin, Russian River, Heady Topper). If breweries wanted to copy Punk, they could have done so long before they published the "recipes". Besides, the money isn't in the recipe, it's in the branding, distribution, marketing. Love em or hate em, Brewdog's branding (and the amount of free publicity they attract) is world leading.

 

[Clint]

That's a very informative post. Thanks! Is it not their aim to put it on every supermarket shelf?

 

[naturals]

That's a very informative post. Thanks! Is it not their aim to put it on every supermarket shelf?

They barely even mentioned supermarkets in their talk. I think their priority is international bar and bottle shop sales rather than domestic supermarkets.
Lots of new bars planned. It's much easier to maximise margins if you control production, distribution and retail! For anyone who regularly drinks in their bars, you'll know they're not cheap and rarely short of punters!

Interestingly, if anyone was in any doubt as to their priorities, within the next few weeks they'll have an entirely refrigerated supply chain. Your beer will go from fermenter, to refrigerated warehouse, to refrigerated lorry, to store. I cannot begin to imagine how much more expensive this is than traditional distribution. All in the name of quality. I wonder how many other UK breweries do this. Any?

 

[Clint]

Hmm..all the big supermarket chains here stock them...Wonder of the range will expand..or the price drops?
As for refrigeration. ..can't see the point as it won't be in fridges in the retailers..mostly.They shift milk etc cold because they have to..why beer?

 

[IainM]

Interestingly, if anyone was in any doubt as to their priorities, within the next few weeks they'll have an entirely refrigerated supply chain. Your beer will go from fermenter, to refrigerated warehouse, to refrigerated lorry, to store. I cannot begin to imagine how much more expensive this is than traditional distribution. All in the name of quality. I wonder how many other UK breweries do this. Any?

The only one I've heard of even thinking about it is Cloudwater (link to blog post).

 

[MyQul]

Hmm..all the big supermarket chains here stock them...Wonder of the range will expand..or the price drops?
As for refrigeration. ..can't see the point as it won't be in fridges in the retailers..mostly.They shift milk etc cold because they have to..why beer?

At a guess, to keep all those hop flavours and aromas in the beer, at peak for as long as possible. Highly hopped beers degrade rapidly. Hop bomb IPA's are best drunk young

 

[MyQul]

I'll bite! I'm a shareholder and was at the AGM over the weekend. I'm far from an expert but I've held shares in quite a few businesses as well as running my own company and having a piece of paper to prove I wasted several years of my life studying the subject.



In a world where Snapchat is worth $28bn and last year turned a $515m LOSS, this is far from the craziest valuation that's happened in the last few months!


You're absolutely right. Dog F, Vermont V3, Tokyo* to name just three incredible beers I tried of Brewdog's over the weekend. As dad_of_jon points out, you don't get the cream of a breweries output on the shelves of the local supermarket.


Interestingly, there are two recipes for Punk. Brewdog have actually just done a run of the original recipe which you can find on their online shop. I tried both over the weekend, and the latter (which has been brewed for the last five years or so) is infinitely more hoppy and drinkable. Sure, it is far from the finest IPA in the world, but it still packs a serious punch against 99.9% of other craft beers sold in the average pub.


They've been on the Times fastest growing companies seven years straight. They're the only business to have managed that feat *ever*. People like to speak down of PE and shareholders, but they won't look a gifthorse in the mouth. PE will take a slight delay in profits for the 97% growth Brewdog have seen in the last year alone. Interestingly the investment is mostly going on new capacity (a new brewery in the Far East and one in Australia). If anyone thinks Brewdog's only way of increasing profits is to cut the amount of hops in their beer, you're seriously underestimating that company.


Absolutely correct. My other half bought Brewdog shares a year ago to the day. Her investment has not far off tripled in that time - off the back of one brewery. I'm sure TSG will be happy with that performance going forward when they have four online. James and Martin spoke about their capacity issues over the weekend. Ellon is huge (and has had massive investment this year). Columbus is another level massive. Even with this investment they're going to run out of capacity again by the end of 2018.


Firstly, having tried a few of their recipes, they're not exactly easy to replicate 100% from the information they've published. Secondly, an hour spent on HBT and you'll find clones of just about every beer in the world (Sculpin, Russian River, Heady Topper). If breweries wanted to copy Punk, they could have done so long before they published the "recipes". Besides, the money isn't in the recipe, it's in the branding, distribution, marketing. Love em or hate em, Brewdog's branding (and the amount of free publicity they attract) is world leading.

Really interesting post. From what you describe, BD is a super profitable company. I bet that gets the financial sharks circling

 

[Leon103]

Really interesting post. From what you describe, BD is a super profitable company. I bet that gets the financial sharks circling

There aren't many companies that say they want to open an hotel and get joe public stumping up over £200m

 

[MyQul]

There aren't many companies that say they want to open an hotel and get joe public stumping up over �£200m

Did BD say they want to open a hotel, or am I not following what you mean?

 

[Leon103]

Did BD say they want to open a hotel, or am I not following what you mean?

Yes. All over internet and social media. In America with beer coming out of the showers etc. They wanted £200m and got that easy so they want more money now

 

[MyQul]

Yes. All over internet and social media. In America with beer coming out of the showers etc. They wanted �£200m and got that easy so they want more money now

I dont really do social media. I guess if your reckoned to be worth 1bn you'll get more or less what you want?