Introduction

This is “What Just Happened?,” the podcast that looks at the biggest brand crises of our time, what they meant for organisational strategy and behaviour, and their lasting impact on our approach to crisis communication.

I’m Kate Hartley. And I’m Tamara Littleton. And together, we’ll delve into what happened, why it mattered, and whether it could happen again.

Episode 

Tamara Littleton: So welcome back to what just happened, and this is quite a breaking story that we’re going to be talking about today. Kate, so Brewdog…

Kate Hartley: Oh, god…

TL: That was not necessarily the response I was expecting,

KH: I mean, there’s so much…

TL: Well let’s get into it. Let’s give a little bit of context. So I know that obviously James Watt, Martin Dickey, the founders of BrewDog, they sold the company back in 2017, but BrewDog has just recently gone into administration and then was bought by the US beverage firm Tilray, which, plus side, saved a lot of jobs, but also it did mean that there were 484 redundancies, immediate closure of 38 UK bars.

And I think one of the key things that I wanted to talk about today was that the equity for punks crowdfunding investors lost their investments and the co-founders departed. So that’s just bringing, that’s just what’s happened recently. Do you have anything to add to that?

KH: I have so much to add to that. I mean, it’s just extraordinary, isn’t it? So there are a few things that I’ve been, I’ve been following this for ages because I’m absolutely fascinated by it, and there are a few things.

So James Watt wrote a memoir called Business for Punks in 2015, and one of the things he said in it, there are lots of really good things he said in it that proved not to be true, but one of the things he said is, all self-respecting captains go down with their ships. No, okay, not quite true, is it? Because he left in 2024, as you said, because the company wasn’t making money. Martin Dickey left soon after that.

The poor old equity people, the shareholders, are going to end up with absolutely nothing, but Watt and Dickey are going to end up with 50 million quid each because they sold, as you said, they sold out in 2017, which they said they’d never, they were never going to do. And, you know, it was all going to be about sharing equity with everybody. So there are some, yeah, there are some issues here, I think, aren’t there.

TL: And, you know, it’s such an interesting brand. It’s such an interesting company, and there’s a lot to be admired about BrewDog. You know, I won’t go in fully, I must admit, I’ve never been the target market. I’m not actually a beer drinker, don’t like it, no. However, I’ve always admired the marketing stunts, the PR stunts, to an extent, and then it went a little bit too far.

I mean, I think the whole beers, beer bottles and squirrels and, and, and, and some of the things that, then, when there was that open letter from staff, this is back in 2021, it did sort of seem to indicate that a lot of these PR stunts were not always true, and also that there was a culture of fear and toxic attitude, and yeah, the lies, hypocrisy and deceit to generate PR for the brand. These are all quotes from that open letter.

KH: And I think there are some real issues out there, as you say, that that letter highlighted, but they went back quite a long way. So BrewDog was founded in 2007, I think, by James Watt and Martin Dickey, as you said. And then they were childhood friends, and there was this lovely kind of narrative that grew up around it.

They wanted to revolutionise the beer industry. They were old friends. They really had to go through some financial hardships to do it. They talk about, you know, not being able to make their loan repayments and struggling to make ends meet and all this stuff, and all this stuff. And then, of course, it turned out that James Watt’s father’s a millionaire. So again, that story, you know, right from the beginning, the narrative has kind of been on quite shaky ground, I think.

So I think they’ve sort of, yeah, there was this feeling that they started to believe their own hype. And as you say, some of the goals originally were great, to revolutionise the beer industry. You know, perhaps it was quite an old-fashioned industry that needed a bit of shaking up, and they definitely did that to an extent. But then it really got to the point, I think, where they were accused of believing their own hype.

And there was that BBC documentary that kind of exposed some of the culture, including things like allegations of abusive behaviour and all sorts of really awful things. So it seemed like, if you scratched the surface, actually a lot of things fell apart. And I, yes, the people who are really going to suffer from this are the 200,000 investors, the equity punks who put 100 million pounds into the company over the years, which, ironically, is the amount, or maybe not, is the amount that Watt and Dickey took between them.

They sold out in, sold their shares to a private equity firm in 2017, so actually, even then, at the time, the equity punks said, we’re allowed to, sorry, were allowed to sell their shares to the private equity firm as well, but only for a cap of something like 505,127 pounds each, or something. So you’ve got this discrepancy between the two founders getting 50 million each, you know, fair enough if that’s what the business is worth, but then this cap on what the people who’ve kind of supported that were able to do.

And that was something that, you know, that wasn’t the promise. That wasn’t the promise of revolutionising this stuff. So I just think it’s, yeah, yeah, there’s a lot of discrepancy between what the company was supposed to stand for and what’s actually happened.

TL: And that’s the thing. And so, you know, putting my own personal bias aside, because I’ve never really had very much positive stuff to say about them, and as I said, not the target market, but I do appreciate that people bought into a community, and that’s what was really driven, and people felt part of it.

And if we kind of now come up to what’s been going on just recently with the sale and all of the announcements, we’re seeing that backlash from that community playing out on LinkedIn and other areas.

KH: Yeah, we definitely are. And again, I think it goes back to this gap between what the company said it was all about and then what it’s actually been all about. So a month ago, it put itself up for sale. As you said, it hadn’t made a profit since 2019.

It told staff, and in an email, of course, that email was leaked to media, because these things always are, but it told staff, saying that its normal day-to-day operations were just going ahead as normal. Nothing was going to change. It’s going to continue to, you know, focus on brewing world-class beer. I think they said serving our customers brilliantly, supporting our staff, and that’s, you know, those promises haven’t really come in, have they.

So many people have lost their jobs, and then, of course, yesterday, people were told that the new owner is going to be opening, reopening some of those bars, but staff are going to have to reapply for their jobs. And suddenly you think, oh, this is sounding a little bit like, do you remember the P&O Ferries scandal? Yes, when they fired 800 people over Zoom and then replaced them with a cheaper workforce to reduce their labour costs.

I mean, I know this is a bit different. I’m not saying it’s the same thing, but it does have that sort of feeling. And of course, the unions are getting involved and saying this is awful, and, you know, this is not okay, to just be told that you don’t have a job and then be asked to reapply for it.

TL: And I’m going to come back to the LinkedIn because I think it’s fascinating. This is something that we’ve been telling our clients, and something that you and I have noticed is increasingly crisis comms are being done on LinkedIn. Obviously, it’s everywhere, you know, it’s in different forums, but I have noticed just over the weekend how James Watt has been using LinkedIn to try and combat some of that backlash.

And it’s become more of a public spat between him and the CEO of Tilray, Irwin Simon, where there’s a lot of kind of mudslinging going on. So it looks like James Watt is saying that the CEO of Tilray made an agreement that he would look after the equity punks. But yeah, there’s a lot of kind of blame going on.

And also, I’ve been sort of looking at articles about how Tilray is going to have to sort of distance themselves from the brand itself, but it does seem to be playing out there. And then, of course, there is backlash, and James Watt is doing what we would imagine he would do, which is responding to individual comments.

Something I picked up on, though, is that he said that, basically he said that there is much more to say. This is from his own post. There is much more to say about the final chapter. In time I will tell that story. Today is not that day, and I just thought that’s such an interesting tactic. I use that word interesting very generously.

It kind of feels to me like there’s something bigger that I can’t talk about, but you should probably feel a bit sorry for me. I don’t know, maybe I’m misinterpreting that.

KH: I mean, yeah, that’s really interesting. So a couple of things there. The LinkedIn thing is fascinating, and I think even a few years ago I was still really surprised that people were using LinkedIn for these big kind of dramas or crises to play out. But actually, thinking about it now, of course it makes total sense.

When you’ve got these personalities who are involved and being held responsible or accountable, then of course LinkedIn is the place, isn’t it? That’s where you can talk to somebody personally, you hit their business reputation. It makes total sense, in a way, that people go there to have those conversations. I think that’s really interesting, and something’s definitely shifted.

But then I just want to pick up on some of these things, because if there is a reason we should feel sorry for him, I can’t really work out what it is. So BrewDog self-proclaimed that the company was going to be worth 1.8 billion pounds in 2020, even though they hadn’t made a profit that year. And they did that in order to raise more money from these equity punks.

And that was a point at which there was a BBC documentary on them as well. But then they sold to Tilray for 33 million pounds. So I’m just wondering why he thought that Tilray would look after these investors when the investors have raised more money than it was sold to Tilray for. It just doesn’t make any financial sense, I would think. I mean, I’m not a financier, as we know, in any way, but that, to me, just doesn’t add up.

So in a way, what were they expecting?

TL: Yeah, I can imagine Tilray thinking very carefully about how they have to combat a sort of a rogue seller, I suppose, because, yeah, you know, they must have signed, anyway, I don’t know what agreements they’ve signed, but—

KH: There are a lot of those equity punks who are speaking out, who are really, really upset about it. They’re going to have lost, you know, they put a lot of money, life savings, pensions, you know, all sorts of things into this, thinking it was going to come good, and also investing in something they loved.

You know, craft beer, this idea of something revolutionary and new and different, and you can see why people did it. They just bought into the whole narrative. And then it turned out that narrative was really, you know, just, there was nothing behind it.

TL: I suppose it is possible that he could rise from the ashes, build a new company, and maybe take the equity punks with him. I don’t know if that would be the—

KH: Would you go with him after this?

TL: I mean, I’ve got too much bias.

KH: He could, they both could, the founders could, they’ve got 50 million quid each to do it. It would be interesting to see whether the equity punks would go with them. I personally doubt it.

TL: Oh yes. It’s that correlation between words and action, isn’t it?

KH: Yeah, we see this so often, don’t we, in these crises, that there’s this huge gap between what somebody says and what they actually do.

TL: Well, the story is not over.

KH: I’m sure we’ll come back to it.

Outro

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