BrewDog founder who led ‘toxic workplace’ steps down

Mr Watt, who has a reported fortune of more than £260m, was accused of presiding over a ‘cult of personality’ – Chris Ratcliffe/Bloomberg Finance LP

The founder of BrewDog who was accused of fostering a “toxic” workplace is stepping down as the company mulls a potential £1.8bn float.

James Watt, who founded the craft beer brand with business partner Martin Dickie 17 years ago, said on Wednesday he would hand over the reins to chief operating officer James Arrow.

Mr Watt will remain on BrewDog’s board as a director and retains a 21pc stake in the company.

The entrepreneur grew Scotland-based BrewDog into Britain’s biggest independent craft brewery, buoyed by marketing stunts and crowdfunding.

However, in recent years Mr Watt has been dogged by controversy, with staff accusing him of overseeing a “toxic” workplace culture.

BrewDog sells beers in 70 countries and runs more than 100 bars across the world – James North

Announcing his decision to step down, Mr Watt said he was “grateful for the tough times too, for the learnings they provided, the resolve they instilled and the perspective they offered”.

His decision comes as BrewDog considers a much-anticipated initial public offering (IPO), which Mr Watt has previously claimed could value the company at around £1.8bn.

A sale to another brewer or a private equity company are also options under consideration. No formal process to IPO or put the company up for sale has yet begun.

Mr Watt began brewing beers with Mr Dickie in Fraserburgh, Scotland, making tiny batches, bottling them by hand and selling them at local markets. Today, BrewDog sells beers in 70 countries and runs more than 100 bars across the world with more than 2,500 staff. The company had sales of £320m in 2022.

Marketing stunts such as driving a tank through central London helped draw attention to the company – LinkedIn

Mr Watt and Mr Dickie helped grow the business through attention-grabbing stunts in their early years, including selling what they claimed was the world’s strongest beer served in taxidermied squirrels and driving a tank through the streets of London.

Mr Watt styled himself and his business as “punk”, criticising the practices of big brewers and initially eschewing traditional finance to raise millions from tens of thousands of retail investors who they dubbed “equity punks”.

However, BrewDog sold a 22pc stake in the business to the American private equity giant TSG Consumer Partners in 2017 for £100m. Private equity firms typically expect to exit their investments after between four and seven years. The term of TSG’s investment in BrewDog is set to expire in August 2024, Bloomberg reported last year.

BrewDog has in recent years faced criticism over its workplace culture. Former staff accused Mr Watt of presiding over a “cult of personality” and said many of the company’s marketing stunts were exaggerated or made up.

Mr Watt said he had ‘always tried to do the best by our team’ after a letter claimed staff were ‘burnt out, afraid and miserable’ – Jeff J Mitchell/Getty Images

BrewDog was also accused of having a “toxic” workplace, with the letter stating: “Being treated like a human being was sadly not always a given for those working at BrewDog.” It claimed staff were left “burnt out, afraid and miserable”.

Mr Watt said at the time he had “always tried to do the best by our team” but admitted that “on many occasions we haven’t got it right”.

In the wake of the letter, BrewDog conducted an internal review and hired additional staff to improve its culture.

In 2022, Mr Watt was also accused of inappropriate behaviour by a number of former workers, who spoke to journalists for a BBC documentary called The Truth About BrewDog.

The documentary contained claims that staff members “felt uncomfortable” with how Mr Watt acted towards women in bars.

Mr Watt complained to Ofcom, calling the documentary a “hatchet job”. However, the watchdog later ruled that Mr Watt and BrewDog had not been treated unfairly.

Announcing his decision to step down as chief executive on LinkedIn, Mr Watt wrote: “For almost 2 decades pretty much every second of my waking existence has been focussed on this amazing business.

“Being able to co-found and then lead BrewDog and our fantastic team has been the greatest privilege and the best adventure I could ever have wished for.

“During my time at the helm of BrewDog, there have been highs and lows, ups and downs, crazy successes and incredibly hard challenges.”

The success of BrewDog has amassed Mr Watt a reported personal fortune of more than £260m.

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