Less than two months after the spectacular explosion of the brewer who built a £2bn icon for British entrepreneurs, James Watt is climbing back into the fermentation tank.
The founder of BrewDog has launched Second Best, a new crowd-funded beer business that will give away 19.3% of its capital for free to small investors and breweries that ended up being liquidated when BrewDog was sold to Canadian-American cannabis and drinks group Tilray Brands for £33m in March.
Announcing the business on LinkedIn, Mr Watt struck an unusual chord. “Thousands of people trusted me to build a smart beer business and make a profit. It was a responsibility I took seriously. And I, for one, am not done with that responsibility,” he wrote.
Under the proposal, former BrewDog “Equity Punks” would be invited to become “Secondary Founders”, claiming a stake in the new company equal in size to what they held in the old one. “There is no catch, no money is required, and your equity in Second Best will always be equal to mine,” Mr Watt said. “You will own it. I will finance it. And I will dedicate myself to building it.”
Almost all of the former BrewDog bar staff, who held shares at the time of the collapse, are also expected to be eligible. On Friday evening, Mr Watt told The Telegraph, that more than 2,000 ex-Punks had signed up – 500 of them within the first ten minutes of his announcement.
Soft model, first in the tin
In a marked departure from the brick-and-mortar distribution empire that has become BrewDog’s defining feature, Second Best will be built around canned beer rather than taprooms. According to the Financial Times, the venture will be launched with two pale ales and a lager, brewed in Germany and across Europe. Mr Watt pointed out that a number of beer-focused pubs could follow once the brand is put to bed.
By agreeing to change Britain’s drinking habits, the company will also tease the market with what Mr Watt described as a “closer to alcohol” concept before the first ground is drunk. “I’m going to make a beer for my non-drinking wife,” he said – referring to his partner, former Made in Chelsea star and Celebrity winner Georgia Toffolo.
The pivot reflects the wider commercial reality facing UK brewers. The low-alcohol and non-alcoholic category has grown by 200 million pints a year, and a punishing combination of input costs, business rates and reduced spending has seen a wave of defaults across the craft sector – the backdrop for Business Matters’ analysis of the UK’s craft beer sector’s final orders.
Second Best has yet to secure all necessary licenses and permits to begin trading, and no launch date has been confirmed.
From a £2bn darling to a £33m fire sale
The new venture marks the second dramatic move by Britain’s most divisive entrepreneur. Founded by Mr Watt and Martin Dickie in a unit in Fraserburgh, Aberdeenshire, in 2007, BrewDog rode the beer wave to operate more than 120 bars in 57 countries and is worth around £2bn at its fundraising peak in 2021.
That high water mark seemed to pass quickly. Five consecutive years of losses from 2019 onwards combined with mounting debts to its private backer, TSG Consumer Partners, left it with debts of more than £800m at the time of the brewer’s collapse. Ultimately the sale of Tilray, detailed by Business Matters during a £33m rescue deal that closed 38 bars and cut 484 jobs, wiped out TSG, both founders and the entire Equity for Punks community – an army of more than 200,000 small investors who had raised around £75m over seven fundraising rounds.
For Mr Watt, the decline came on top of a difficult few years personally and professionally. He stepped down as CEO in 2024, a move reported by Business Matters as his departure amid controversy over workplace culture allegations that began to be raised by more than 60 former employees in 2021. He has always said that managers need to “listen, learn and act”.
After the March sale he described himself as “heartbroken” for Equity Punks “not getting a return on their investment” and “dedicating the best 20 years of my life to something that didn’t have the outcome we all wanted”.
Will the Punks bite a second time?
The key business question is whether trust, once broken on this scale, can be rebuilt. Equity Punks was a marketing engine as a means of financing; Their evangelism turned BrewDog into a household name. Reproducing that flywheel without a headline-grabbing pub release — and without the eye-catching proportions that inspired successive promotions — will be a test.
Industry observers note that Mr. Watt is, in fact, trying to flip the playbook for BrewDog: too light on capital spending, too heavy on public ownership, and clearly self-funded by the founder rather than underwritten by private equity. Trade headline Grocer suggests that Europe’s pre-canned, potable approach is designed to keep fixed costs low and routes to market flexible while the product finds its niche.
Whether it works will depend on the beer and more on the math. As City AM noted in its analysis of the return of “equity punk”, Mr Watt’s promise that the Second Founders will always be lined up alongside him is a direct response to the creation of a special share that has left ordinary BrewDog investors behind in the queue when the music is stopped.
“I feel a responsibility to the Equity Punk investors. I want to try to build the future of beer,” Mr Watt told the Financial Times. “Hopefully the second beer business I build with the community will be the best.”
The name, at least, sets the expectations right.
