James Watt’s return is good for British beer

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As the Sex Pistols sounded the last honk of their guitar amps in a San Francisco rock venue in 1978, Johnny Rotten leered over the crowd one final time. “Ever get the feeling you’ve been cheated?”

A strange question to ask a group of punks perhaps, if one made more explicable by Rotten’s swift departure from the Pistols and the band’s collapse shortly after. But one suspects that it’s a relevant query to another would-be punk – James Watt, formerly of BrewDog.

Earlier this year, the ex-fisherman turned punk entrepreneur Watt faced a mutiny aboard the business that he had founded and led for 17 years. With BrewDog’s brewing and pub operation foundering amid economic upheaval and declining interest in craft beer, what was once hailed as a multibillion-pound business was sold off to the cannabis and craft beer conglomerate Tilray Brands for £33 million.

The trouncing of Watt’s own rescue package and his ejection from the business came less than two years after he’d stepped down as CEO amid criticisms over workplace culture, marketing, and his own personal conduct. More tragically jettisoned were 220,000 early stage crowdfund investors – dubbed ‘Equity Punks’ – who were left uncompensated despite raising £75 million for the business over several funding rounds.

The Punk IPA enjoyers got punked, you might say. But Watt’s marooning has proved short-lived. Mere months after his exit from BrewDog, Fraserburgh’s prodigal son has been cooking up a new beer business, in the form of a craft brewery called Second Best.

On paper, there’s not much to distinguish it from the many ill-fated breweries dreamt up in a garden shed by men with trendy moustaches and too much time on their hands. The initial range comprises an IPA, a pale ale and a helles lager, the launch date to be determined once Watt has completed the punkish task of ensuring all paperwork is in order.

Indeed, the main thing that sets it apart is a generous offer to the hundreds of thousands of crowdfund investors fleeced in the BrewDog sale. For the former Equity Punks, Watt has set aside 19.3% of the business, available free of charge. ‘You’ll own it. I’ll fund it,’ as Watt puts it, more convincingly than the claim that retail investors who control only a fifth of the shares will be treated as ‘second founders’.

Much cynicism has followed Watt’s latest wheeze, and perhaps not unfairly given his reputation for bullshit. Back in 2022, the BBC devoted a TV documentary and six-part radio series to probing BrewDog and Watt, alleging that the brand’s provocative marketing stunts weren’t entirely honest. More scandalous still was the revelation that Watt had owned half a million pounds of shares in Heineken, the archetype of what he’d previously derided as a ‘global beer mega corporation’.

Recent sale figures for BrewDog also suggest its bargain bin price tag was justified when Tilray took over. Retail sales in the UK have fallen by 11.8% in value in the past year, according to consumer research firm NIQ. With the company and its category in disarray, British supermarkets are becoming bearish about the brand, sacrificing shelf space for what was once the country’s leading independent brewer in favour of trendy fruity beers.

Watt, it should be said, argues that things went skunky after he stepped down as CEO in April 2024, noting that his final year as top punk saw BrewDog’s share of the grocery beer market grow from 2.9% to 3.8%. ‘It is ironic that I am often blamed for BrewDog’s subsequent decline in performance when, at the point I stepped down as CEO, the business was growing incredibly strongly, taking market share at record levels in grocery,’ he said, not wanting to ‘comment on current strategy’.

It is such forthrightness that has made Watt the kind of entrepreneur that the British love to hate: arrogant, self-assured and a little reckless. Comparisons with Elon Musk, another bullish businessman who even before his dabbling in politics was disdained for his ambition as much as anything, are especially fitting given Watt’s investment in SpaceX and emulation of Doge.

Many will translate this cynicism into a fear that Watt is once more taking the Equity Punks for fools with his latest scheme. The more business-minded will also not accept Watt’s shrugging off of responsibility for the ignominious end to BrewDog’s independence as a brewer, growing annual revenues having been paired with hefty losses.

Yet for all that Watt embodies the justified stereotypes about craft beer enjoyers, the jokes are only legible because Watt and his brewing partner Martin Dickie made BrewDog such a success. The brewery’s fall has obscured its monumental rise, and the fact that it changed a complacent industry.

At a time when several independent breweries are closing every week, the return of industry veterans should be something to raise a glass to. Second Best is worthy as a sincere attempt to make amends with BrewDog’s crowdfunders. But Watt’s return is good on its own terms too.

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