Two companies announced their financial results last week.  The first is Brewdog. a brash upfront craft beer brewer based in Aberdeen that did not exist 8 years ago, but has now grown to be one the UK’s biggest players in that field. Its owners James Watt and Martin Dickie are probably the best known faces from the brewing industry in the UK judging by number of media appearances and they even have their own show on craft beer in America where they tour the country in search of the best beers.  They have their own way of funding expansion via Equity For Punks share issues where people can buy into the brewery directly and their third share issue is close to raising their £4 million target to fund further expansion of their brewing operations and bar network which currently numbers twelve.

The second is one of the better known real ale brands across the country, Black Sheep, who were formed 22 years ago, ultimately from a family dispute at the Theakstons Brewery, a brewery that the now Black Sheep owner Paul Theakston had ran since 1968.  You will find their beer in many pubs across the country, with Black Sheep Ale or Best Bitter being a house ale in the majority of them.  Based in Masham, North Yorkshire, their brewery has now expanded into a visitor centre and bistro.   They are one of the keystone real ale breweries where you know that their beer will be widely available and a decent refreshing pint of ale will be served from one of their barrels when you do find it.  Other examples of such cornerstone breweries are Skiptons Copper Dragon and Blackburns Thwaites.

Brewdog is having a fantastic year, with turnover increasing from £12m to £20m, and profits estimated somewhere between £500,000 and £1m based on previous performance.  They have gone from the 2 founders to now having 200 members of staff across the brewery and bars in 7 years and are hoping to grow that by another 50 people.  The new £5m expansion of their brewery which comes online soon will allow even more growth as production can ramp up to meet demand as they plan to open nine more bars, three of them outside the UK, where they also are also carving a strong export market for their beer.

Craft beer is a growing market and admittedly Brewdog are at age where such strong growth is probably easiest, having become well known enough to leverage their name and founders personalities, but not so established they are viewed as the mainstream and people move on from their products to sample the next big thing.  In human terms they are in their mid teenage years, loud enough to be heard, young enough to be rebellious, but with an eye to the future and where are we going from here long term.

Black Sheep however are not such happy bunnies, they sold 6000 less barrels than the previous year and turnover dropped to £18m (down from £19m).  This makes the company a similar size to Brewdog, but the Masham brewers have problems.  The made a loss of £500,000 last year after making a similar profit the year before.    The brewery has said the its problems stem from their dependence on the pub companies and other multiples who are reducing their estate and that they need to embrace the take home and export markets, something Brewdog have made a real success of.

Now these two companies are very similar from a financial point of view with both close to £20m turnover this year and a profit of about £500,000 last year, but the important difference is Black Sheep is the mainstream and that particular path has a lot of companies walking along it and competition for sales is fierce.   Competition is also coming from the microbrewers and the likes of Brewdog themselves.  They don’t have the flexibility to upset industry groups or go off on a wild tangent with their beer.  They are the 30 year old man with 2 kids and a mortgage of the brewing world.   They will have better years and Brewdog will have growing pains in the future, but everyone has their salad days at the buffet of life and you need to make the most of your time there.