Innis & Gunn, founded in 2003, reported a turnover of 11.8m in 2014 up from 10.5m in 2013 as it continued to grow its markets in the UK, Sweden, Canada and the US. The company also sold more than 20m bottles of beer in 2014.
With the company achieving such growth, it’s hard to imagine that founder Dougal Sharp created Innis & Gunn by accident. He was approached by whisky maker Grant’s also known as William Grant & Sons to come up with a means of flavouring barrels to give whisky a different taste. This led to an innovative method of creating beer intently focused on flavour. Grant’s and Sharp embarked on a joint venture in 2003 to produce and sell the beer, and Innis & Gunn was born.
The company was a fully autonomous business within the group, with Grant’s alleging thatInnis & Gunn was non core and would thus some day be sold to Sharp if he could afford to buy it. The partnership lasted until 2008, when Sharp initiated a management buyout (MBO) just weeks before the financial meltdown.
He managed, in part, due to Cockburn. Of their encounter, Cockburn said: It was a rather serendipitous affair as Id not long before been recommended his beer by a friend and remember it being quite unlike any other beer Id ever had. Thats how Innis & Gunn came to my attention.”
After meeting Sharp and talking to him about his plans for the business, Cockburn advised him during the MBO, which was completed in January 2008.
Cockburn explained that he remained as an adviser to the board, but wanted to be more involved as he believed the team had created a business with genuine global potential. Training with PwC in Glasgow before specialising in corporate finance in South Africa, as well as joining Grant Thornton in Scotland to head up its corporate finance business, he said, had suitably equipped him for the role of CFO. Cockburn saw his wish fulfilled in 2012.
Indeed, Cockburn believes the company could achieve dramatic growth in its existing markets. Asked whether Innis & Gunn could run a successful global operation from Scotland, he said: “Absolutely. Scotland is where we come from. It’s core to the people we work with and in the eyes of our consumers.”
The statistics, matched with the passion of employees such as Cockburn, has prompted Sharp to “look for a suitable site” to build a brewery. Innis & Gunn’s beer used to be produced at Caledonian Brewery before Heineken acquired it as part of a Scottish & Newcastle takeover.
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With negotiations underway to buy land in South East Scotland, the company launched a mini-bond in order to raise 3m. The BeerBond will enable consumers to invest and “help build the brewery”.
Alongside its plans for a new brewery, the company is set to open acraft beer bar in a former striptease club on Lothian Road in July. The directors suggested they wanted the venue to mark a new chapter in the streets emergence as a prestigious drinking and dining destination.
Called The Beer Kitchen, it would be the first of a new range of bars and restaurants that would help raise the 3m needed for a brewery, bottling line and barrel store. They plan to open another five around the UK by 2017, with some sites including boutique-style hotel rooms.
Upon discussing the challengesof being a CFO in such a fast-growing company, Cockburn suggested that fast-growing entrepreneurial SMEs often have a clear vision of what they want to do but not necessarily how. The main challenge for a CFO, however, is to “facilitate the ‘how’ by developing infrastructure and providing finance to support this vision”.
He noted that since joining the business it had doubled in size. “We have grown our people fourfold to support this and future growth; weve built a marketing and promotions service company in the US; were opening our first bar, and were building a new brewery funded by BeerBonds.” Each of those major change projects has its own challenges, he said.
As for present challenges in the drinks sector, Cockburn explained that three quarters of the company’s volume is international and its employees span across several countries. Each market has its own challenges and if you take your UK mentality to those international markets it won’t always work, he said.
He said: “I spent several years working overseas and advised many global businesses when I was in the profession. I learned that decisions require an understanding of international business culture.”
Intriguingly, Cockburn is of the belief that the modern-day CFO has to be more strategically aware than ever and is a core part of influencing and implementing strategy. “This requires a level of creativity not often assumed in accountants!” he said.
He cited the funding of the brewery via “innovative customer-facing” funding, as an example. The BeerBond, he said, is appealing to people who may have some cash languishing in a bank account and that the Innis & Gunn bosses would rather pay them interest than a bank.
“Practice thinking on your feet!” he claimed, adding that change is inevitable, good, and often requires quick, judicious thinking from the leadership team.