BrewDog Australia confident as losses narrow
Despite being held back by COVID-19 restrictions, BrewDog Australia has been bullish about ANZ expansion plans as half-year losses narrow at the business.
In its interim consolidated financial statements for the six months ended 30 June 2021, Brewdog Group Australia Limited returned revenues of $3.6 million, up from $2 million in the corresponding period last year.
Group losses for the Australian arm of the business amounted to $306,000 for the half year, an improvement on the $1.1 million loss it made in the first six months of last year.
Calvin McDonald, head of BrewDog’s Australian operations, said that depending on COVID, the business hoped to be in the black by the end of next year.
The Scotland-headquartered brewery has been focusing on expanding in the wholesale market in recent times after an equity crowdfund earlier this year. According to the accounts filed with ASIC, wholesale beer revenue rose from nil in 2020 to $181,000 in the first half, and retail sales rose to $3.4 million in the period.
McDonald said this relatively small increase was expected.
“We only started building our sales team towards the end of H1,” he explained.
“But now that we have members of the sales team in Brisbane, Gold Coast and the Sunshine Coast, we’re seeing things really accelerate. Our retail partners have been delighted with the sell through so far which is really encouraging.”
“We’re really hoping to have a couple of bar sites to announce before the year is out, while at the same time continuing to expand the brewery and improve the availability of BrewDog beer across Queensland and beyond,” said McDonald.
However the ongoing pandemic situation including travel bans and snap lockdowns has impacted these plans, particularly in New Zealand.
“COVID has been a challenge – I had envisaged getting over there [to New Zealand] by now to instigate the search for the right location; but obviously that opportunity has not yet transpired.
“New Zealand is still firmly a priority for us in the medium term. As far as other cities in Australia; Perth, Sydney and Melbourne are all cities that we’re making progress in; and Newcastle and Gold Coast are interesting markets that we’re actively looking for properties in.”
At its Australian outpost in Brisbane, plans have been underway for a major expansion as well as for a DogHouse hotel.
“We’re currently at the stage of finalising commercials but it’s too soon to suggest any opening dates,” explained McDonald.
During the half year BrewDog also closed its equity crowdfunding campaign, modelled on similar campaigns across its group companies which have raised more than £73 million (AU$130 million) globally.
The campaign raised $725,000 from 1,072 investors, well over the minimum $300,000, but also far from the maximum $10 million raise.
McDonald said that it was an exercise in “building a loyal band of Equity Punks”.
“We couldn’t be happier to have everyone on board. Their investment is going as planned towards expansion across Australia: predominantly brewery kit and bar fitouts as well as growing our team here.
“We took delivery of our pasteuriser yesterday which will allow us to brew the range of Alcohol Free beers that we’ve been planning as well as our SMI carton packer last month which will streamline our packaging processes. This is just the start and further plans will be announced as they’re confirmed.”
While COVID-19 has to an extent held back BrewDog AU’s expansion plans, being a multinational business has helped, explained McDonald.
“A real positive of now having bases set up in four countries across three continents is that we can have agile, specialist teams equipped to deal with rapidly changing environments in different markets,” he said.
“From an Australian perspective, obviously 2020 was solid for us in relative terms, but the great benefit of being a global brewery now is that different markets have strengths and weaknesses at different times which allows us to be resilient.
“Overall it’s obviously been a challenging 18 months for the business but we’re coming to what is hopefully the end of it in a good position and well prepared for growth.”
Hear more about BrewDog AU and its equity crowdfunding campaign on the Beer is a Conversation podcast with Australian GM Ed Bott.