The CEO of Tilray Brands has praised the UK’s “very supportive” retailers for maintaining distribution of BrewDog’s beers amid the brand’s administration and forced sale.
Tilray has so far ploughed around $50m-$60m (£38m-£45m) into BrewDog after buying the IP, Aberdeen manufacturing site and best-performing brewpubs for just £33m in March.
CEO Irwin Simon said UK retailers had been “very, very good” to Tilray, and were supportive of its plan to push the craft beer category back into growth.
“We haven’t lost distribution, and they love our pipeline, our innovations, and they are ready to back us,” Simon said.
Speaking to press, company leadership and former ‘Equity Punks’ – backers of the prior, defunct BrewDog entity – at the brand’s flagship Waterloo brewpub, Simon set out Tilray’s ambition to return BrewDog to a valuation of more than $1bn.
“We’re going to invest what it takes to turn it around,” he told The Grocer.
“There was nothing in there to drive cashflow, so you have to put cash in.”
Tilray has had to pour money into unlocking supply arrangements with former suppliers of the pre-administration BrewDog, who were left in the lurch. According to administrators’ reports, unsecured creditors owed £190m from the company’s collapse will get less than a penny on the pound from debts owed to them by the prior company.
The company has now kicked off a well-funded promotional campaign advising consumers BrewDog is ‘Under New Ownership’ – and slashing the price of its signature Punk IPA 330ml four-packs to £3. Initial retailer data quoted by BrewDog showed the promotion has already worked to draw consumers back to the brand, with sales double those of the same period last year.
Investment will also go into BrewDog’s Aberdeen facility, where Tilray plans to kick off production of its US beer brands alongside those under the BrewDog brand.
Around £3m of capex is planned over the next 18-24 months, with a further £500k-£750k going towards improving the site’s operations.
The company’s plan is to ramp up volumes to take full advantage of the facility – though Tilray leadership has ruled out using contract manufacturing to make up volumes.
Growth will also come through BrewDog’s non-alcoholic portfolio, with plans to “ride the wave” in energy drinks and functional soft drinks with the group’s Hi*Ball energy drink and Mello mineral-fortified drinks. But Tilray’s experience in alcoholic RTD cocktails has also led Simon to pick out BrewDog’s RTD range as an area of strong potential growth.
“At the end of the day, 90% of our products are going to be alcoholic drinks. Hi*ball is an energy drink, which is big business, and Mello is a great product. But alcoholic drinks, whether vodka seltzers or tequila seltzers, are ultimately going to be where the majority of our business is,” said Simon.
No comments yet