Deirdre O Meara 
BrewDog, Scotland’s popular craft beer company, has entered into an agreement with Budweiser China to produce its flagship beer, Punk IPA, in China.
The company hopes the deal will help drive sales higher ahead of an initial public offering (IPO) of its shares in the coming years. BrewDog plans to open several new bars in China as part of its expansion plan.
The company already has local production in the US, Germany, and Australia and partnership deals in Italy, the Netherlands, and elsewhere. BrewDog founder and CEO, James Watt, said the timing of the IPO would depend on market conditions, but he would be “very disappointed” if it does not happen in the next four years.
BrewDog’s partnership with Budweiser China will enable the company to sell its beers through the sales and distribution network of its new partner. Punk IPA, along with other popular brews such as Lost Lager, Elvis Juice and Hazy Jane, has made BrewDog a household name in the UK.
The company had originally planned to go public in 2020, but the pandemic forced it to shelve its plans. Watt believes the internationalisation of the business is key to its IPO plans.
Although BrewDog has had a presence in China since 2015, it has been difficult to scale up without a local partner. The company signed a similar partnership deal with Asahi in Japan, which saw sales double in the first year. The China deal will be crucial for BrewDog’s IPO ambitions. Currently, Chinese sales account for less than 1% of BrewDog’s total sales.
In 2021, BrewDog made an operating loss of £5.5m ($7.6m) on revenues of £286m. The company makes approximately 45% of its revenues from running bars and venues.
The timing of the IPO depends on market conditions, which Watt does not expect to be favourable for the next 12 months. However, he hopes the IPO will happen within the next four years.
BrewDog’s expansion into China is part of its wider internationalisation strategy. The company is looking to tap into the growing demand for craft beer in emerging markets.
China’s beer market is the largest in the world, with sales expected to reach $116bn by 2025. By partnering with Budweiser China, BrewDog hopes to gain a foothold in this lucrative market.
BrewDog’s decision to expand into China follows a growing trend among craft beer makers to look beyond their home markets. As competition intensifies in the UK and US, craft brewers are increasingly seeking growth in emerging markets.
However, the challenges of exporting beer to other countries can be significant. BrewDog’s partnership with Budweiser China will help it navigate the complex regulatory environment in China, as well as provide access to local distribution networks.
BrewDog’s IPO plans have been on hold since the pandemic hit. The company had planned to go public in 2020, but the economic uncertainty caused by COVID-19 forced it to delay its plans. However, with the global economy now showing signs of recovery, BrewDog is hoping to revive its IPO ambitions.
The company has a loyal following of fans, who are drawn to its irreverent branding and unconventional approach to brewing. With demand for craft beer on the rise, BrewDog is well-positioned to benefit from the growing trend.
