Profit on horizon for maverick Scottish beer maker BrewDog after eye-watering £59 million loss

James Arrow, who took over from controversial co-founder James Watt earlier this year, said trading losses at the Aberdeenshire brewer had reduced significantly during 2023, with the business returning to a positive underlying profit position in the first half of this year. He highlighted the group’s continued global bar expansion, with the brand increasing its footprint across Europe, the US and Australia, while entering new markets, such as Thailand, and growing its presence at major transport hubs including a number of airports and railway stations.

“The progress made in 2023, and the first half of 2024, demonstrates the appeal of our brilliant beers, the power of our brand, and the strong appetite for quality craft beer in the UK and around the world,” said Arrow, as he revealed group revenues of £137.5 million in the first half of 2024 following a 12 per cent surge to £280.9m during the course of last year.

He added: “We are pleased to report our trading losses reduced significantly in 2023, reflecting the significant changes we have made to address inefficiencies in the way we operate, and this will continue to be a priority as our business continues to evolve and return to sustainable, profitable growth in 2024.”

The business is said to have generated positive earnings before interest, taxes, depreciation and amortisation (Ebitda) in the first six months of 2024, though a figure has not been disclosed in the trading update.

BrewDog said the double-digit hike in 2023 net revenues had been driven by a “market leading” performance in beer and a continued strong performance in the burgeoning bar division. Underlying trading losses on the Ebitda measure were slashed from £12.8m in 2022 to £2.5m in 2023, with that number turning positive in the opening months of 2024. A hefty pre-tax loss of £59m for 2023 compares with a deficit of £25m in 2022 and was driven by one off impairment costs related to historic acquisitions and restructuring.

Ellon-based BrewDog said it now had four of the top five craft beer products in UK supermarkets, with sales of Wingman, a session IPA, surging despite only launching last October. New bar openings in the first half of 2024 included Bangkok, Denver, Perth in Australia, and Rotterdam with announcements of new travel hubs at Edinburgh Waverley and Belfast Grand Central stations before the end of the year.

In May, Watt announced that he was stepping down as chief executive of BrewDog, 17 years after he co-founded the venture with the mission statement: “To make other people as passionate about great craft beer as we are.” Arrow, who had been chief operating officer, took the reins as part of a succession plan put in place last year. Watt said he would be staying on the BrewDog board in the role of “captain and co-founder” and remain a key shareholder in the business, which now employs some 2,700 people and operates more than 120 bars, hotels and venues worldwide. The brewer exports its products to more than 60 countries.

Watt set up the firm in 2007 along with co-founder Martin Dickie, However, the former CEO was mired in controversy in 2021 when he was accused by former workers in an open letter of having a “culture of fear” within the business.

Releasing its latest numbers, the firm said its BrewDog Waterloo and BrewDog Las Vegas bars had both delivered in excess of £10m in sales in 2023. BrewDog USA revenues grew by 20 per cent during the year. The German and Australian breweries grew at 20 per cent and 31 per cent respectively, with European distributors’ growth coming in at 9 per cent.

The company also hailed a milestone after brewing more than one million hectolitres of beer for the first time in its history, with June 2023 marking BrewDog’s biggest ever month at some 100,000 hectolitres.

Three “hero beer” launches took place in 2023 - Black Heart stout, Wingman session IPA and Shore Leave amber ale. The firm said that in its first 12 months, Black Heart took 10 per cent of Guinness’ share in UK supermarkets in the UK and became the only non-Guinness product in the top seven stout products sold in the UK grocery category.

Further investment in brewing capacity and efficiency was undertaken at the Ellon headquarters, with 2023 seeing the commissioning of new fully automated brew kit to increase brewing capacity to 2.5 million hectolitres.

BrewDog, which has grown its global workforce by 60 per cent since 2020, said it was continuing its expansion into major travel hubs, with a growth plan which will see franchise partner SSP open and operate BrewDog-branded bars and venues at “some of the world’s busiest and most important travel locations”.

Those include Edinburgh’s Waverley railway station where the firm has previously announced that it plans to locate its fifth bar in the Scottish capital.

Arrow joined the brewer from Boots Opticians, where he was managing director, in September 2023. Prior to that he spent a decade at Dixons Carphone in a variety of senior roles including e-commerce, trading, operations, sales and transformation. Other key appointments for BrewDog in 2023 included James Taylor as chief financial officer and Chris Fielden as chief supply chain officer.

BrewDog co-founder James Watt quits as chief executive to 'dedicate more time to other business interests’