BrewDog Cancels Contract Arrangement with Yeastie Boys

Austin Ray

THE GIST
One of the largest craft breweries in the UK has cancelled a contract brewing agreement with a smaller company, leaving the guest brewer now in search of a new home. Citing increased need to focus more on its own products, BrewDog has given Yeastie Boys four months to continue operations while it explores other options. Though headquartered in New Zealand with brewing capabilities there, Yeastie Boys began contracting at BrewDog in 2015 as a way to better serve fresher beer to European markets.

WHY IT MATTERS
For Yeastie Boys, the timing here is a bit unfortunate. Speaking with GBH, co-founder Stu McKinlay says 2017 was “the year that it all opened up for us,” adding, “We were planning to triple sales this year.” Being “ahead of the curve” right now, though, he still believes this is possible. Plus, the end of its time at BrewDog might make things a little harder, as its future in the UK is currently up in the air.

“My focus has to switch from continuing to build the brand we’ve established to finding a brewery that can meet all our requirements. We’re trying to do that in four months,” says McKinlay. “To put that timeframe into context, it was two years between first talking to BrewDog (and some other UK breweries) and finally brewing at [the Scottish city of] Ellon.”

Still, he says he’s “relentlessly optimistic” or, possibly, “stupidly naïve” that there is opportunity in the UK. He’s hopeful the company will be deep in the process of transitioning to a new brewery within three months.

As for BrewDog, the company has actually been in a state of expansion lately at Ellon (and elsewhere), boasting last year about the installation of a new brewing system “that required roads to be closed,” adding it would only continue to increase fermentation capacity “over the course of 2017.” So how did the place get too small for both companies? Despite the facility growth, it ultimately came down to increased market demand for its own brands, the company says.

“We have a limited number of smaller tanks, which we have historically offered up for contract brews. With the demand we are currently experiencing, we require access to our entire capacity, and are therefore unable to offer a contract brewing service to other craft breweries unfortunately,” says Sarah Warman, company spokeswoman. “We will continue brewing for the Yeastie Boys team in the short term until they can find someone else to brew for them, and wish them all the very best with their amazing beers!”

Either way, the relationship was more than one of mere convenience for Yeastie Boys. Yes, brewing beer closer to the European markets it wanted to explore ensured freshness and kept export costs down. But BrewDog also represented an immense growth opportunity for the small brewery established in 2008. According to Stuff New Zealand, which covered the arrangement at the time of its origin, partnering with BrewDog afforded Yeastie Boys the ability to brew “up to 80,000 litres of beer at a time, which was almost as much as Yeastie Boys brews each year in New Zealand.”

It remains to be seen now where Yeastie Boys ends up. But we can safely file this one under the risks of relying on other people’s equipment.

“I guess we were just in the wrong place at the wrong time, as they decided to adjust their focus back onto solely brewing their own beer,” says McKinlay, who added he was grateful for all the help BrewDog has offered his company. “The key thing to remember is that, no matter what, it will be ok. There will still be beer to drink and we’ll still be having a laugh with friends.”

—Dave Eisenberg and Matthew Curtis