“Every aspect of our business was suddenly at risk” - If your business relies on people gathering in pubs and bars, lockdown creates a commercial minefield to navigate. How did legal do it?
Richard Street is the General Counsel at BrewDog. This is a chapter from our eBook 'GCs & the pandemic: how legal responded'.
Do you remember when you first heard the word ‘coronavirus’?
It was January, 2020, and I had to fly to Munich. I heard about the virus when Bavaria became the first region in Germany hit by it. We discussed its impacts in the business and grew increasingly concerned because we had operations out in Japan and South Korea, which were already beginning to feel the commercial and economic impact of the virus.
Because hospitality and socializing was such a focus for the transferral of the coronavirus, every aspect of our business was suddenly at risk
When things started to escalate before the first lockdown, what were your initial concerns and priorities as a GC?
Prior to the first lockdown, as beer producers, we weren’t even sure we would still be able to stay open. So there was plenty of risk mitigation planning underway, and a huge amount of work going towards figuring out how we could shift our business to preserve as many jobs as possible.
We had breweries, international sales within global markets, and we also operate our network of a hundred bars globally, so we thought there was a lot of diversification and a lot of a buffer there. The outbreak really showed us that these streams were all related to alcohol - whether it was being sold in Japan, Brazil, or the UK. And because hospitality and socializing was such a focus for the transferral of the coronavirus, every aspect of our business was suddenly at risk.
So we started thinking about what we could do to keep people in jobs, but also what we could do to help. One of the things we discussed early on was pivoting towards the creation of hand sanitizer in our distillery, which we then offered out for free to the National Health Service.
That sounds like a huge project - what was legal’s involvement in that pivot?
A lot of it was centered around compliance. I looked at how we could manufacture the sanitizer to the correct standards, packaging, means of distribution, and the controls we would implement for the distribution. We needed to source the relevant packaging materials, which involved a lot of procurement and contract negotiations over our distribution agreement template.
As the sole counsel, I just had to get stuck into it. A lot of the work is readily available around regulations and compliance, especially as many companies were going down the same route at the time.
How did your priorities differ from what you’d planned to be doing in 2020?
2020 was supposed to be a year where our franchising aspirations really took off. We’d built solid franchising agreements and a framework to roll out across various territories. That work didn’t stall completely, but because bars and restaurants were closed, nobody was looking to open bar franchises.
The other priority was around sales. During lockdown, the demand for our product in supermarkets and online exploded. We couldn’t actually fulfil all of the orders that we had in April, so we had to upscale our online business, which meant onboarding a huge number of new digital partners. And as we built our online platform, IP and data security became big issues, so I had to prioritize that too.
One priority that stayed constant was a focus on speed of response. As a GC, I’m committed to making sure that if the business approaches me with a legal problem, I’m looking for solutions rather than being the lawyer saying we can’t do something.
The ability to pivot a business is hugely important and businesses which are agile have truly been able to survive and thrive
It seems like BrewDog is busier now than ever! How does legal cope with the huge increase in demand?
That’s one of the tougher responsibilities, because it depends on speed. James (Watt, CEO) and the other directors came up with the ‘gold can’ giveaway, for example. It was an initiative to hide five wrappers in our crates of beer, which customers could exchange for over £25,000 worth of prizes. All of a sudden the business told me it wanted to launch this giveaway in two or three weeks’ time. And it’s an open request: how can we make it happen?
I had to retrench and look into the regulation behind this project. We’re going to have competition - does it have a lottery? If so, how do we write our terms and conditions? How would we regulate the way our customers claim the prize?
Sometimes I would be working on a set of terms and conditions, and then all of a sudden the project team will say they’ve decided to approach the project in a different way instead. So all of that work you’ve done gets set aside and you need to recalibrate. It’s about speed and priority, especially as a single-person legal team.
The business also became a certified B Corp! What did that entail from a legal perspective?
Part of the B Corp journey involves gathering all the data together to answer their huge questionnaires - and not only for our UK business, but for all of the various international subsidiaries. It was the same amount of information you would need if you were going to be taking on a huge investor or doing a massive M&A deal. It was a huge piece of work, and we got that all done and filed in the beginning of 2020. Due to coronavirus we ended up launching later, but a lot of the work we did for B Corp started to feed into our sustainability journey as well.
How did you balance the day-to-day work with those long-term projects?
I don’t really differentiate between the big projects and the day-to-day work - to me, it feels like one and the same. It’s really about prioritization.
If I get a question about beer sales for takeaway, and a request from the projects team about B Corp, I just ask both teams which task needs to be completed first, and what our timeline is for both of them. And then I evaluate whether I need external support at any time and take it from there. It’s something I fine-tuned over the last five years, in terms of getting the job done.
Lawyers need to be approachable - we get a bad rap about being the kind of team people don’t want to approach because our heads are always in a book
What do you think are your key learnings from the past year?
The ability to pivot a business is hugely important and businesses which are agile have truly been able to survive and thrive. We were able to pivot quickly and set up our digital business within a week or two of realizing that direct-to-consumer sales were going to be huge for us. It’s also important to make sure that everyone is facing the right direction, so you can avoid stalling these critical decisions internally.
It seems that the exit from this pandemic isn’t going to be overnight, but rather with small steps - how do you see legal’s role in being ready for the bounceback?
Lawyers need to be approachable - we get a bad rap about being the kind of team people don’t want to approach because our heads are always in a book, or we’re just constantly busy and unavailable.
But if someone is coming to legal with a potential problem, they should know lawyers aren’t going to blow up at the situation or ask them why they made the mistake in the first place - but rather, they’re going to see the problem, and collaborate to find a solution. More than that, your business should feel comfortable enough to say ‘I need this task by tomorrow’ without feeling like legal is closing borders with them or hiding away from their priorities.
It’s about engaging with the business to prove that the business needs them on hand for support, not finding out about projects at the last minute, but making sure that you are available from the start. As we start reopening this year - not just reopening bars but society as a whole - these skills will become essential.
Richard Street is the General Counsel at BrewDog. This interview is an excerpt from our eBook, 'GCs & the pandemic: how legal responded'. Download today.