BrewDog co-founder James Watt has stepped down as CEO of the Scottish craft brewery and will assume the new role of “captain” and co-founder, while also serving as a non-executive director on the company’s board of directors, according to multiple news reports.
Watt is also retaining his 21% stake in the business that he founded with Martin Dickie 17 years ago.
Chief operating officer James Arrow will assume the role of CEO moving forward. Arrow joined the company in September. A succession plan has been in the works since last year, according to the Independent.
In a LinkedIn post, Watt wrote: “In my new role I will remain as a board member, a director and I will also be part time strategic advisor to the business and [to our] leadership team. Furthermore, I will retain my BrewDog shareholding and my Hop Stock initiative whereby I give 20% of my BrewDog shares to the team will remain in place.”
Watt acknowledged there were “highs and lows” during his tenure.
“I am also grateful for the tough times too, for the learnings they provided, the resolve they instilled and the perspective they offered,” he wrote.
In 2021, former BrewDog employees accused BrewDog of cultivating a “culture of fear” and toxicity. Watt, himself, was accused of inappropriate behavior toward female staff members in a 2022 BBC expose. Watt denied the allegations.
More recently, BrewDog was criticized for ceasing starting new employees at the real living wage, instead beginning new staff members at the minimum wage.
A BBC analysis noted that BrewDog is working to return to profitability “after three years of significant losses driven by higher energy prices, supply chain disruption and rapid expansion of its on-trade.”
In his LinkedIn post, Watt wrote that plans for his next chapter include “continuing to help BrewDog build an amazing business,” traveling, spending time with family and loved ones, “continuing to help nurture fantastic start-ups, becoming a football manager, and in due course, starting a few new ventures of my own. (One of these is a lie).”
“As for BrewDog going forward, I am really excited to see the next phase of our growth,” he wrote. “We have great momentum in our most important sales channels and our team, at all levels of the business, is in incredibly good shape.”
BrewDog’s U.S. operations ranked as the 36th largest Brewers Association (BA) defined craft brewery in 2023. Volume numbers have yet to be shared. However, BrewDog moved up two spots after ranking 38th in 2022, with output of 69,894 barrels of beer (-3% year-over-year).
Dollar sales of the BrewDog brand family are up +11.9% for the 52-week period ending April 20 in NIQ-tracked off-premise channels. Volume, measured in case sales, increased +14.8% in the same period.
In the latest 13-week period ending April 20, dollar sales increased +6.4%, while volume increased +19.2%. Over the last four weeks, sales increased +2.4%, while volume increased +17.2%
In 2023, BrewDog brand family dollar sales and volume each increased +14.8% in NIQ-tracked channels.
In a 1-K annual report filed with the Securities and Exchange Commission on April 29, BrewDog USA reported revenue of $50.43 million in 2023, a +34% increase compared to 2022 revenue of more than $37.6 million.
However, BrewDog operated at a loss of $12.9 million in 2023, following operating losses of more than $14 million in 2022. The company attributed the losses to “several factors,” including “a general slowdown in the craft beer market and rising input costs due to inflation.”
“As the company looks towards 2024 and beyond, there will be an increased focus on delivering sustained revenue growth while also implementing cost and operational improvements across all aspects of the business,” BrewDog wrote in the filing. “The company also plans to continue investing in growth initiatives to meet the evolving needs of its customers.”
Revenue growth in 2023 was attributed to its Las Vegas and Atlanta locations being open a full year, increased demand for non-alcoholic beers and the expansion of its contract brewing business, according to the filing.
The company shared that its taproom locations increased revenue +55% in 2023, compared to 2022. Distributed NA beer revenue in 2023 increased +74% YoY, following a +70% increase in 2022.
BrewDog also reported sales growth in new markets, Arizona and Utah, while discontinuing sales in “lower volume markets of New Hampshire, Maine” and three other unnamed states, as well as Washington, D.C.
The company distributes its offerings in 32 states, Canada and Bermuda. BrewDog said it will evaluate its distribution footprint and focus “on more profitable markets” going forward.
BrewDog USA has its own CEO, John Graham, who was appointed to the position in April 2023.