BrewDog today announced a profit-sharing plan that will see the Scottish craft beer company give 20 percent of its annual earnings to employees and charities as part of a new “Unicorn Fund.”
Under the plan, 10 percent of profits will be donated to 20 different charities. The other 10 percent will be evenly distributed across its entire workforce, which today stands at more than 1,100 employees.
According to Tanisha Robinson, who was recently tapped to lead BrewDog’s U.S. division as managing director, the company introduced “version 1.0” of the plan – profit sharing for employees only — last July.
“We believe that our beer and our people are the most important parts of our business,” she told Brewbound, noting that BrewDog practices open-book management. “Everyone knows where we stand in terms of net profits and various cost-savings opportunities. Our employees have full transparency on what we are doing, and it is important that everyone participates in our upside.”
Profits that are shared with employees via the Unicorn Fund are posted “in the offices and in the bars,” Robinson said, so that “everyone can see it building over time.”
Funds are then distributed at the end of each year as a bonus.
Version 2.0 of the Unicorn Fund, unveiled today, includes the additional charity component, Robinson said.
“This is the biggest community-fueled, crowdfunded charitable contribution in history,” she told Brewbound. “It allows us as a company, and as a team, to think about how we engage the community and use the whole business as a lever for positive impact.”
Here’s how it works:
Ten percent of profits will be donated to “worthy causes.” Five percent will go to those chosen by BrewDog’s 57,000 Equity for Punks investors, and five percent will be issued to charities chosen by employees.
Both Equity for Punks investors and BrewDog employees will be allowed to nominate charities, Robinson said, and BrewDog employees will ultimately select the 20 charities that will receive funding.
“Outdated CSR policies have zero consideration for their real-world impact, existing merely for the purpose of an oversized check and an awkward photo shoot,” BrewDog co-founder James Watt said via a press release. “This is a call to arms for businesses to democratize the impact their charitable contributions can have on their community, their people, and the world.”
Prior to establishing the charitable component of the Unicorn Fund, BrewDog’s most significant non-profit outreach included brewing, packaging and donating beer to Brewgooder, a craft beer label that donates 100 percent of its profits to clean water projects around the world. BrewDog plans to maintain that initiative as well, Robinson said.
The company expects to share as much as $116 million with employees and charities ($58 million each) over the next five years, Robinson said.
If that’s the case, BrewDog is projecting profits of $580 million over the next five years (or $116 million on an annualized basis). The company netted just $9.1 million in profits in 2016, according to The Telegraph.
“In our tenth year at BrewDog, we hope to inspire a new kind of business with the Unicorn Fund; one that doesn’t measure profit in purely monetary terms,” Watt said via the release. “Our mission for the next decade at BrewDog is not simply to redefine the beer industry, but to redefine industry itself.”
Earlier this year, BrewDog sold a 22 percent stake to TSG Consumer Partners, a private equity firm with stakes in Pabst and Sweetwater Brewing Company.
The deal, worth $265 million, valued the company at more than $1.2 billion when it was announced in April.
Watt, along with co-founder Martin Dickie, are said to have netted more than $100 million from the deal, according to The Sunday Times.
Robinson wouldn’t comment on Watt and Dickie’s take, saying only that a portion of the proceeds from the sale were set aside for Equity for Punks investors interested in selling their shares.
Most of those investors opted to maintain their positions in the company, and Robinson said the “vast majority are in it for the long haul.”
“We are excited about that,” she said.
The company began distributing beer for its new Ohio brewery six weeks ago, Robinson said, and BrewDog USA has already secured more than 1,400 points of distribution.
The company is currently working on plans to begin distributing beer in Indiana, Kentucky and Pennsylvania – something that could happen this year – and assessing additional regional distribution expansions for 2018.
Robinson also confirmed plans to take the company public over the next five years, saying BrewDog’s “big focus” is to “create a ton of value in the business by expanding markets and opportunities.”
“A lot of that momentum will dictate when we go public,” she said.