Our garage home brew brought in £7.5m

James Watt and Martin Dickie were fed up of the horrible taste of mainstream beer - so they made their own. And following large orders from Tesco and Sainsbury's, Brewdog beer is now drunk from America to Scandinavia.

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Slowly they perfected the beer: "we liked drinking American pale ale so we tried to recreate that flavour". They also tried mixing unconventional ingredients, such as chilli, to see how it would taste. After much experimenting, they reckoned they had perfected "a pretty tasty IPA". It was time to get a professional opinion.

In 2006 they travelled to London to visit beer critic Michael Jackson (aka The Beer Hunter). "Michael was the most influential man in the real ale scene, so we wanted to get his opinion." They caught him at a book signing and persuaded him to taste some of their IPA. "He just looked at us and said: It's time to quit your day jobs'." Needing little encouragement, the 24-year-olds went back to Scotland to start the business with a £30,000 loan from RBS. "We spent the money on a lot of stainless steel. We then got a local fabricator to turn it into a professional brewery." By April 2007, Brewdog's first batch of beer was ready but "that's when the problems began".

Jackson's approval meant a lot in the real ale world, but it did little to help sell beer to mainstream pubs. "We travelled around the northeast of Scotland but no one was interested." Many pubs were already tied to large brewers and those that weren't didn't think the beer would sell. That was partly because "we were about 30% pricier than a mass-produced beer". Sales were slow and after eight months the firm was only selling around ten cases a month, which didn't cover costs. "We started to fall behind on the loan because we couldn't afford the repayments." Then, an unlikely white knight came to the rescue.

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"Tesco rang and said that a sample I had sent in six months earlier won their tasting competition," says Watt. They went down to London for a second time and "had to keep our poker faces" when Tesco offered to roll out the beer across 400 stores. "We said yes, but we were both thinking, how the hell are we going to produce that much beer?" Brewdog had four months to fill the order. They asked RBS for more money, but were "laughed out of the office". Undeterred, they went to HSBC, which stumped up the £150,000 they needed.

Brewdog made the Tesco order and by the end of 2008 it had notched up £800,000 in sales. A deal with Sainsbury's soon followed. Then it started to go abroad. "The biggest markets for our ale are America and Scandinavia, so we started trying to do deals with distributors out there." The strategy worked. Brewdog is now sold in 25 different countries and last year foreign sales made up 65% of the firm's £7.5m sales. Eager to expand further, the pair want to raise £1.5m by selling shares in the firm. Their ultimate goal? "A Brewdog listing."

James graduated from Keele University with a BA (Hons) in English literature and history, and has a NCTJ certificate in journalism.

 

After working as a freelance journalist in various Latin American countries, and a spell at ITV, James wrote for Television Business International and covered the European equity markets for the Forbes.com London bureau. 

 

James has travelled extensively in emerging markets, reporting for international energy magazines such as Oil and Gas Investor, and institutional publications such as the Commonwealth Business Environment Report. 

 

He is currently the managing editor of LatAm INVESTOR, the UK's only Latin American finance magazine.