CLEVELAND — A Cleveland watering hole has brewed up a new way of doing business by not just investing in its product and process but, instead, investing in its most important asset: its people. Brewdog, the company that owns Brewdog Cleveland Outpost in the Flats, has announced it is creating tens of millions of dollars in stock options for its salaried employees as well as creating a revenue-sharing program for its bar staff.
Brewdog, a multinational brewery and pub chain based in Scotland, announced this week that its CEO and founder, James Watt, would be donating a 5% portion of his stake in the company, which amounted to more than 20% of his overall holdings in the company. Based on its most recent fundraising valuation of the company, the donated shares amount to an estimated $126 million.
The donated shares will be converted to vested stock options for each one of the company’s 750 salaried employees, amounting to more than $37,000 in stock options each year over a four-year period. In an effort to ensure the company’s bar staff, including wait staff, cooks, hosts, and bartenders, aren’t left out, the company announced that each Brewdog bar will share 50% of its profits with its team members.
Brewdog USA’s CEO, Jason Block, said the move, which is a general rarity in the hospitality industry, is the company’s way of investing in its staff while also serving as a differentiator when it comes to recruiting and retaining talent.
“We feel that our success is going to be determined by the people that work for Brewdog. We have big aspirations. We have a lot of ambitions to do a lot of great things. That’s not going to happen without the buy-in and ownership mentality from our team,” Block said. “The best way to do that is truly make them owners. It’s also a great tool for retention. The longer that people stay with us, the more of these options will vest. It’s something that we hope will provide a longer tenure with the company.”
Long known for its turnover, averaging about 75% annually, the hospitality industry, in particular, has had great difficulty during and after the COVID-19 pandemic. Block said the revenue-sharing and vested stock option benefits will put Brewdog’s bars and pubs at an advantage when it comes to an increasingly tight labor market.
“Hospitality workers especially were hit so hard by the pandemic. A lot of them moved out of the industry… and it’s been a lot of time and effort to get people to come back,” Block said. “The better we can provide for our team members and the more enticing of a package we have for them we feel the more likely we are going to be able to grow our team and be successful. We hope that this is something that people view as a great benefit because we certainly do and it’s the reason why we are doing it.”
One of Brewdog’s newest ventures, the Cleveland Outpost in the Flats, has quickly earned a steady and loyal clientele who have flocked to the large brewpub located on the banks of the Cuyahoga River. General Manager Kevin Gilliam, a hospitality industry veteran who has been at the helm since the location launched, said he was floored by the company’s benefits announcement.
“At the end of the day, I’m invested in this and if it does well, I do well. It gives me that outlook to make sure I pull my sleeves up and get hard to work and into providing amazing service, food, and atmosphere to Cleveland,” Gilliam said. “It’s an amazing opportunity and it’s definitely bridging the gap. It’s creating more opportunity for us to grow into leaders of the business.”
Brewdog’s Cleveland location employs a staff of more than 50, which flexes into a staff of more than 70 to handle the expansive patio in the summer months. It is currently looking to hire additional support staff, a sous chef and bartenders. Since the announcement of the benefit, the company overall has seen a 15-fold increase in new applications, Block said.
“Now they have an opportunity to be a part of the growth and to be a part of the success of the store,” Gilliam said.
“I think it’s definitely going to make them work harder and be able to provide that amazing customer service that we strive for here at Brewdog.”