My Barnard Castle Eye Test IPA is on its way

The email arrived last Wednesday from BrewDog: my Barnard Castle Eye Test IPA was on its way. Billed as short-sighted beer for tall stories, it’s dry-hopped 6% ABV for a juicy hit with pineapple, mango and hint of zesty lime. All profits will go to funding production of their free sanitiser for the NHS & Health Care Charities.

The Scottish brewery has an (in)famous reputation for its bravado on the naming of its beers, and its bold and brash marketing, and this is their latest provocative and cheeky marketing stunt.

Barnard Castle Eye Test limited edition IPA was named via a public vote, shortly after news that Dominic Cummings had broken the government’s lockdown rules in April, travelling 260 miles with his wife and child to his parent’s home in Durham. It transpired that Cummings had travelled 30 miles from Durham to visit nearby Barnard Castle, a local tourist attraction, to test his eyes, as his vision had become ‘a bit weird’.

Quick off the mark, BrewDog co-founder James Watt asked his 67,000 Twitter followers to vote for the name for a new, limited edition beer: Cummings & Goings, Stay at Home were suggested, but Barnard Castle Eye Test won the vote. The label features blurred out text at the bottom of the can. It adds to the branding…

Beer has come a long way since an Italian medic, Aldobrandino of Siena, published his treatise on health and diet in 1256. Here was a drink, Aldobrandino argued, that harms the head and the stomach, causes bad breath, ruins the teeth, and fills the gut with bad fumes. But his views would not prevail. In Britain, beer became increasingly popular.

But by the end of C20th, beer was in a bad way. Traditional cask ale was vanishing from the pubs in favour of thin, industrial bitters and fizzy, low-strength lagers. Technology allowed the big brewers to commoditise the product with economies of scale to churn out mass-produced volumes, supported by big advertising budgets to somehow convince people this bland, insipid parody of a product was what beer was supposed to be.

The vast majority of beer in Britain was chilled, filtered and pasteurised (to kill the yeast and extend the shelf life), injected with CO2 (to make it fizzy), served from a pressurised keg. Sales in supermarkets killed off the pub trade with their pricing.

At this time, James Watt had a beer epiphany with an American brewed Sierra Nevada Pale Ale, bought at Tesco, to wash down some fish and chips. With his friend Martin Dickie – and the brown Labrador, Bracken – they began experimenting with their own brews because they couldn’t find anything they really wanted to drink. At 55% alcohol-by-volume, their first brew, End of Historya blond Belgian ale infused with Scottish Highland nettles and fresh juniper berries – was stronger than most whiskies. It sold in a limited run of 11 bottles.

Their vision was to make people as passionate about craft beer as they were, revolutionise the British beer industry, and redefine British beer-drinking culture. They were part of the vanguard of a remarkable renaissance in British brewing that triggered the healthy micro-brewery sector we have today. Punk IPA was born.

Watt and Dickie pooled their savings, negotiated a £20,000 bank loan, and bought a pile of second-hand brewing equipment. Their first two batches of Punk IPA failed; the first because a phone, a thermometer and a set of car keys ended up in the mash, and the second because they had bought dirt-cheap garden hose for their brewhouse and the whole brew tasted like really strong plastic.

The third, however, worked. It was awesome. Now they just had to convince enough people they should feel the same way. It was tough going. They filled bottles by hand, sometimes through the night, criss-crossed Scotland in an ancient Fiat Punto and an even older Skoda pickup, flogging their beer on farmers’ markets.

Less than a year later, BrewDog had won its first major contract – to supply Tesco with twice the quantity of Punk IPA it was then capable of producing. Watt and Dickie had entered four of their beers in a competition run by the supermarket chain: the prize for the winner was a place on the shelves in every one of its UK stores.

Punk IPA became the UK’s fastest growing alternative beer brand and they launched ‘Equity for Punks’, aground-breaking crowdfunding campaign, and their business model was born. Theycontinued to push boundaries and perceptions of what beer can be by brewing the world’s strongest ever beer, Tactical Nuclear Penguin, at 32%; further Equity for Punks crowdfunding campaigns financed growth.

BrewDog captures the essence of passion-driven entrepreneurship, disruptive thinking in revitalising a declining market, an innovation mindset, vibrant product leadership and positioning, and unique customer intimacy strategies.

Let’s look at some key aspects of their strategy for your own startup.

1.     Be authentic, live your passion and values

What excites Watt and Dickie about brewing – above and beyond their fanatical obsession with beer itself – are its unending possibilities.From the very start they were inspired to brew American-style craft beers, sweet-tasting ales with high alcohol levels and large amounts of hops, which gave them a bold, fruity, even perfumed flavour.

They experimented, and what’s good with beer is you can try stuff and get an outcome really quickly. You can put in twice the malt, four times the hops, whatever, and two weeks later you know the result. Whisky, you have to wait years.

The zeitgeist is also key. BrewDog took its cultural values from the punk ethos – looking at how punk rock existed as an alternative to pop culture. BrewDog wanted to exist as a radical alternative – to reassess the value of beer, how it should be drunk, and ultimately start a movement away from the ‘4%, industrial tepid lager’ which dominated at the time.

For all the annoyance at their marketing antics, BrewDog have built a successful business on the loud and repeated pronouncement of their own authenticity: that all they truly care about is beer.

Takeaway: Stand for something Founded on a mission to revolutionise the beer industry and redefine its beer-drinking culture, BrewDog started a movement. The lesson from this noble vision is that by aligning with a purpose and standing for more than profit, BrewDog created a community of loyal customers and investors.

2.     Create your own market space

The punk positioning strategy is classic Blue Ocean thinking – if the rest of the market has moved to the right, turn away and head left. With the market dominated by mass-produced similar tasting beers, BrewDog travelled in the opposite direction and created their own market space. They let everyone else fight for market share in the crowded mass market, and created individual craft beers, with a focus on beer drinkers who desired authentic and artisan quality beers at an affordable price.

They adopted the same approach to marketing, not competing with mass- advertising selling a similar message, they stood outside of the crowd and made their brand distinct and memorable. Some of their communication strategies maybe unconventional, but they leverage and amplify their brand values.

Punk makes sense for a startup, challenge the status quo, conventional thinking and accepted paradigms, be non-conformists, get your point of view across. They communicated their philosophy and attracted like-minded people to a craft beer cultural revolution. It was about staying true to their philosophy.

Takeaway: never compromise on price In a market characterised by big brewers shipping volume beers that sacrificed flavour to compete on price, Watt and Dickie did the opposite and set about creating a market and educating customers willing to pay a premium for their highly differentiated product. Lowering your price is often a race to the bottom and hard to reverse, so BrewDog steadfastly refused to get involved with this strategy.

3.     Make product innovation your purpose

BrewDog has a straightforward, single product-based strategy – they supply the best beer – but their business model is based on purpose, passion and beer. They are not about a crowded supermarket shelf where the product is stacked high and sold cheap, but about creating their own shelf space, through product innovation, a positioning on brand and product that is distinct, discernible and distinguishable from competition. It’s hard to compete against purpose, passion and innovation.

BrewDog has set the product innovation bar high, and shown what can be achieved. The reality is that innovation is like the old story about a teenage boy’s claims about his first kiss: everyone talks about it all the time; everyone boasts about how well he is doing it; everyone thinks everyone else is doing it; almost no one really is; and the few who are, are fumbling their way through it incompetently. But BrewDog makes it happen, time and time again.

Takeaway: Make scalable innovation your competitive advantage Product innovation and scaling this at high velocity enables BrewDog to out-manoeuvre the market. Time and time again they gain first mover advantage by being agile, bold and responsive – the Barnard Castle Eye Test is just their latest play.

4.     Choose your attitude, choose your tone of voice

BrewDog describes itself as a post-punk, apocalyptic, motherfucker of a craft brewery. Their crazy, provocative marketing stunts have got their voice heard – as seen by the Barnard Castle Eye Test venture. Two others stand out for me:

·     Ahead of the 2012 Olympics, BrewDog released a special edition beer, Never Mind the Anabolics, containing steroids and other substances allegedly popular – though banned – among athletes. When we were putting steroids and other banned substances in beer, the initial reaction from the media was shock, disdain and disgust, but then we were able to talk to them about the chemicals that are in beer – that started a whole discussion, said Watt.

·     My name is Vladimir, was a beer released to mark the 2014 Winter Olympics and protest against President Putin’s archaic laws around homosexuality.

Takeaway: Develop a brand personality that people connect with BrewDog is an alternative type of business and from the beginning its founders focussed on creating an irreverent and quirky brand personality. By doing so they have built a passionate and sustainable connection with their audience whose loyalty has driven its hockey stick growth.

5.     Build a brand: make your marketing memorable

BrewDog’s provocative marketing has been a pivotal to the business model. They are serial offenders, and haven’t always got it right – Pink IPA, satirically labelled beer for girls, to highlight the gender pay gap, drew significant criticism.

Shock and fanfare have been the core of the marketing strategy for their thirteen years (91 dog years) existence, with the aim to shorten the distance between the people who make the beer and the people who drink it. 

BrewDog has used its marketing to provide a direct connection between the brewery and their audience, injecting humour and education content to reflect the brand personality. Their marketing is notorious for the alignment of product branding with their ethos, often being opportunistic with controversy whilst focused on product innovation – a winning combination.

Takeaway: Leverage the power of content BrewDog is a great example of leveraging content for inbound marketing. Introducing a whole new product category, their marketing fuels the sales cycle – from suspect to a prospect, to a customer, to a repeat customer, to an advocate and to an evangelist – Equity for Punks means customers own equity, an amazing alignment.

Business for Punks: Break All The Rules – the BrewDog Way by James Watt captures the remarkable tale of their turbocharged, heady growth, it’s a must read for all startup founders. They are a remarkably energised business. My Barnard Castle Eye Test IPA is on its way. Short-sighted beer for tall stories. I can’t wait!

Time for a quiet pint, followed by 15 noisy ones – Gareth Chilcott

I was reminded of Gareth Chilcott’s quote about beer when reading a great book that  I received for Christmas – Chris Arnot’s, Britain’s Lost Breweries and Beers. What is more inseparable than beer and England? Filled with entertaining social and economic history, it was also a poignant read as the litany of closures of many traditional brewers has left a huge gap in our cultural and physical landscape.

For centuries beers were eponymous with the towns and cities of their creation. Hoppy, golden Boddingtons helped to define Manchester just as the rich, fruity taste of Eldridge Pope’s Thomas Hardy Ale said much about Dorchester, Bass and Burton, and Vaux with Sunderland.

But this is no longer the case. Boddies is today not a Manchester brewed ale, nor is Tetley’s brewed in Leeds. Both have joined the growing list of landmark breweries that have been closing since the 1960s, often taking their much loved beers with them.

The unthinkable happened in 2006, when the last Tetley’s dray horses were put out to grass on the Pennine hillside: Charles, Prince and Jonjo. Once there had been 120. Then in 2011, Carlsberg, the dominant shareholder, called time on the Leeds base, established when Joshua Tetley acquired a brewery from William Sykes for £400 in 1832, and founded what became a Leeds institution.

Founded in 1832 by Henry Boddington, the Manchester Strangeways brewery was established on a site set up by two local grain merchants, Thomas Caister and Thomas Fry. Brewing ceased on the site in February 2005, and production of the cask conditioned beer moved to Hydes’ Brewery in Moss Side, Manchester, until it was discontinued in March 2012, ending the beer’s association with the city. Today, all that remains is the iconic chimney stack. The cream of Manchester is a straw-golden, hoppy-bitter, and one of the first beers to be packaged in cans containing a widget, giving it a creamy draught-style head.

It was around the same time that Coronation Street came to my attention in the mid-1970s that Boddies also became an integral part of my life. Ena Sharples, Minnie Caldwell and Martha Longhurst were frequently shown sipping milk stout whilst gossiping under their hairnets in the snug at The Rovers Return, and a lifestyle as Northern as Newton & Ridleys.

Today, there are twenty million pints downed per day, but we’re consuming less beer than at any time since the Great Depression of the 1930s. In the second quarter of 2012, pint sales were down almost 10%, and ten thousand pubs – in which beer accounts for around 60% of alcohol sales – have closed since 2000. We’re losing the pub as a community hub, where people enjoy a beer and a chat together

It would appear that our national drink, English bitter, is in seemingly irreversible decline. The UK beer market is now dominated by the big keg lagers such as Carling and Foster’s – which for the sake of shelf life get filtered or pasteurised after brewing to kill off the yeast, then injected with CO2 in an effort to give them back some semblance of life. Besides this, traditional bitters are not on the drinking agendas of the 17 to 25 year old drinkers, new lifestyle choices and consequential shifts in demand have played a part in the decline.

Merger activity has accelerated hand-in-hand with globalisation of production, driven by the search for increased economies of scale and larger markets. The world’s four biggest brewers – Belgium based Anheuser-Busch InBev, London based SAB Miller, the Dutch brewer Heineken, and Denmark’s Carlsberg – now account for over half the global market for beer. Back in 2000, the top 10 brewers accounted for fewer than 40% of global beer sales.

Alongside this, 70% of alcohol in the UK is now purchased in supermarkets – Sainsbury’s, sells 87 pints of beer a second – the vast majority of that is mass-volume, pile-it-high, sell-it-cheap lager. On the supermarket shelves is a cornucopia of hoppiness. There are Belgian beers-a-plenty, new American beers too, but often a wall of shelving is entirely dedicated to British varieties – something is stirring in UK beer production after years of decline.

Out there in the industrial estates and converted pig farms, new micro-breweries are opening, encouraged by Gordon Brown’s Progressive Beer Duty of 2002 which halved the tax paid by those producing fewer than 3000 barrels a year. They are producing superb cask and bottles ales using the best ingredients, sometime reviving ancient recipes and in the finest craft traditions of British brewing.

The emergence of micro-breweries in the last few years has shown how an industry structure can change, produce quality product for a niche market, and with an intelligent, crafted offering, smaller businesses can compete effectively at a local and national level with global organisations.

There are now more than 1,000 independent breweries in the UK, the highest figure for more than 70 years, with 158 new breweries launched in the past year alone. There are now more breweries in Britain than at any time since the end of the Second World War, and we clearly like what they’re brewing – sales of cask-conditioned ales, which ferment a second time in the barrel, have surged by 25% over the past five years.

So what are business lessons we can take from the disruption these micro-breweries have brought to a beer market seemingly flat and in long-term decline?

Maverick branding: The Titanic Brewery in Stoke-on-Trent, birthplace of Edward John Smith, captain of the ill-fated White Star liner has weathered the storm of the endless jokes about beer going down well and has built on Stoke’s association with the Titanic with a selection of beers called Steerage, Lifeboat and Iceberg. To attract younger consumers that are looking for that point of difference and novelty, micro-breweries have been unconventional in their messaging. Using rebellious, humorous or even counter-intuitive language in the beer category will create a disruptive difference with current offerings.

The small scale of the new breed of brewery gives them flexibility, so they can produce short runs of seasonal or special occasion and bespoke ales (Hunter’s brews its Denbury Dreamer, for example, solely for the Union Inn, BrewDog produced Hoppy Christmas) and many of them are now available in bottles, where they’ll continue to gently ferment until you crack them open at home.

Business agility – integrating the Supply Chain: Fuelling an industry-wide trend away from the big national chains and back towards the traditionally close local pub – local brewery relationship, a spectacular success story involves Moorhouse’s Brewery in Burnley. It started life in the C19th making non-alcoholic beer for pubs run by the Temperance movement, and switched to cask beer in the 1970s. Since winning Champion Beer of Britain award in 2000 for its Black Cat mild, and latterly the premium bitter Pendle Witches Brew.

Moorhouse’s has met the demand for its beers by buying six pubs. The £4.2m investment in 2012 in new brewing facilities provide it with an annual capacity of 40,000 barrels. The integration of the retail outlets and brewery has given the company strategic and cost advantages, and it has built on its local identity and heritage

Innovation and development of new product: Micro-breweries are experimenting with new styles and reviving old ones: smooth, highly hopped best and premium bitters; potent pale ales; dark, sweet porters, an C18th favourite; rounder, softer milds; heavy, grainy, creamy stouts; fruity, pale amber golden ales. Drinking a local beer produced in the same building its been made in harks back to a reassuring age that consumers associate with authenticity and quality. Product innovation is a key driver of micro-breweries competitive edge, they are meeting the need for authenticity, and enhance the experiential nature of their brands, as well as those looking for something more individual.

Distribution: The industry faced a dilemma over how and where to sell beer, with more people drinking at home. There was the opportunity to take advantage of that, but if you can buy the product in a supermarket, it will make it less attractive and exclusive when people go to the pub. The solution was to start selling a bottled range through independent retailers in the local community, which is more in keeping with the ethos than the big supermarkets.

The Beer House in Waterloo is a good example of the growing prevalence for the authentic and obscure, as it serves 50 premium and craft beers. Classic pub food is served with a contemporary twist to further reinforce the experience of authenticity and uniqueness. As people look to consume more locally based food and drink, bigger breweries are losing out to smaller, indigenous brands that thrive on being the underdog. Often using obscure and humorous branding, these beers are attracting a younger customer that is a key target for the large breweries.

Perhaps the best example of a business combining all of the above elements is BrewDog, founded in 2006 by James Watt and Martin Dickie. The brewery in Fraserburgh produced its first brew in April 2007 and is Scotland’s largest independently owned brewery producing 120,000 bottles per month. Interestingly, it raised £2.9m via Facebook.

BrewDog’s range of beers capture the imagination, each has an ‘identity’ and promoted as a unique product – Trashy Blond, Punk IPA (their flagship brand) Zeitgeist, Dogma, and other memorable products:

  • Tokyo (18.2% ABV) – a very strong imperial stout
  • Tokyo Rising Sun (13.2% ABV) – a version of Tokyo, aged in Highland or Lowland whisky barrels for 4 years, supposedly “forgotten about”
  • Nanny State (1.1% ABV) – a very weak but extremely heavily hopped bitter, brewed as a reaction to criticism of the high strength of their beers
  • Tactical Nuclear Penguin (32% ABV) – at the time, the strongest beer ever produced in a competition with German brewer Schorschbräu
  • Sink The Bismarck! (41% ABV) – at the time, the strongest beer ever produced. A quadruple IPA
  • The End of History (55% ABV) – the beer formerly known as “the world’s strongest beer”. Only 12 bottles released and packaged inside stuffed squirrels and stoats
  • Ghost Deer (28% ABV) – the world’s strongest naturally fermented beer. Served from a mounted deer head at the BrewDog bar in Edinburgh

In October 2010 Brewdog opened their first bar in Aberdeen, followed by a further seven in a nationwide network.

BrewDog’s provocative marketing has been a key aspect of the business, and has gained them substantial international coverage. Say goodbye to the corporate beer whores crazy for power and world domination. Swear allegiance to the uncompromising revolution. Taste the hops, live the dream. Learn to speak beer, love fruit and never forget you come from a long line of truth seekers, movers and warriors – the outlaw elite. Ride toward anarchy and caramel craziness. Let the sharp bitter finish rip you straight to the tits.

Ahem. Check out the web site, you’ll be on it for ages

The website declares We are proud to be an intrepid David in an ocean of insipid Goliaths, which captures the essence and the voice of the micro-breweries in a global market dominated by four big players. So let’s raise a glass to the rise of the UK’s micro-brewery industry, which represents a stunning 15% of all beers sold. This surely is a nod to the UK’s entrepreneurs and SMEs as to what can be achieved in revitalising a declining market with a vibrant, intelligent and disruptive business strategy.