Britain's BrewDog aims to put Punk IPA on the map in China
By Sarah Young
LONDON (Reuters) -Britain's BrewDog has struck a deal for its flagship craft beer Punk IPA to be made in China, as it seeks to expand its sales and reach ahead of an initial public offering (IPO) in the coming years.
Scotland-based BrewDog said on Monday it had signed a joint venture with Budweiser China to produce its beers at that company's Putian Craft Brewery in Fujian province, and sell them through its new partner's sales and distribution network.
Punk IPA, Lost Lager, Elvis Juice and Hazy Jane have helped turn BrewDog into a household name in Britain. Expansion into new countries will help drive sales higher ahead of an IPO. The company had originally planned a flotation in 2020, but that was shelved during the coronavirus pandemic.
"I think the internationalisation of our business is kind of very key to our IPO plans," BrewDog founder and chief executive James Watt told Reuters.
While BrewDog has had a presence in China since 2015, Watt said it had been hard to scale up without a local partner. It's a similar model to a partnership deal BrewDog signed with Asahi in Japan, which saw sales there double in its first year.
"We've got similar ambitions, if not even bigger ambitions, for the Chinese market," Watt said, when asked about his expectations for growth from the new deal.
Currently Chinese sales account for less than 1% of BrewDog's total sales.
BrewDog, owned by its founders, private equity firm TSG and crowdfunding investors, already has local production in the United States, Germany and Australia and partnership deals in Italy, the Netherlands and elsewhere.
As part of the expansion plan for China, it will open several new bars there. The company makes about 45% of its revenues from running bars and venues. In 2021, the last year for which results are available, it made an operating loss of 5.5 million pounds ($6.6 million) on revenues of 286 million pounds.
Asked about the timing of the IPO, Watts said it partly depended on market conditions which he didn't expect to be right for the next twelve months, but he added: "I would be very disappointed if it's not sometime in the next four years."
($1 = 0.8310 pounds)
(Reporting by Sarah YoungEditing by Kylie MacLellan and Mark Potter)