John Dunsmore is like a child in a toy shop; the excitement is clearly written all over his face as he strides between the rows of brewing equipment at the Edinburgh Beer Factory. “It looks like a giant Meccano set, but I know enough about how it works to give a tour,” he jokes, before explaining the production process that the company uses to make its award-winning Paolozzi lager.
It all feels a long way from his previous roles in the drinks industry. John served as the final chief executive at Scottish & Newcastle (S&N) before the brewing giant was broken up by Carlsberg and Heineken in 2008. He went on to run C&C Group, the Irish company that owns Tennent’s lager and Magners cider.
Now, John is making beer on a somewhat smaller scale. Last year he launched Edinburgh Beer Factory, a family business that he runs alongside his second wife, Lynne, and his daughter from his first marriage, Kirsty. The trio has created its craft brewery on the Bankhead industrial estate, with its fluorescent blue and pink sign attracting curious glances from passengers on the tram and on the Glasgow-to-Edinburgh train line, which both pass outside its door. Brewery tours are already on offer while a visitors’ centre is due to open early in the new year.
With its white-washed brick walls, rows of gleaming stainless steel and colour-changing ‘disco lighting’, the factory feels like a cross between an arch-villain’s lair from a 1960s James Bond film and a garage brewery on steroids, complete with its own bottling line, keg wash and 24 hectolitre brew kit.
“This isn’t a hobbyist brewery expanded,” explains Kirsty, who cut her teeth at M&C Saatchi in London before spending nine years in the advertising industry. “This was all part of a vision.”
That vision took shape in 2014 during a “family meeting” on board a boat moored in Leith docks. All seven members of the clan – John, Lynne, their three sons aged 13, 16 and 18 at the time, along with Kirsty and her brother, Patrick – had gathered to discuss ideas for setting up a family business. Also at the table were Rosie Nicholson, John’s personal assistant in his other business ventures, who would become head of finance at the beer factory, and John Lowery, who facilitated the meeting.
“We fancied making a craft beer and we’d looked at a couple of existing companies with a view to buying into them or buying them out, but all of them had baggage,” remembers John. “Basically, all craft brewers – including ourselves – are like cabbies because we all want to do our own thing in our own way and we don’t want to be told how to do it by anyone else.”
“We were very conscious that we were coming into a craft beer movement that had already started and there were already a lot of people involved in it – we saw it as a challenge,” adds Lynne, who is the brewery’s head of recruitment and resources and who previously served as chairwoman of the Children’s Hearing Panel in Edinburgh. “So we spent a lot of time in the planning stages.
John Lowery showed us a picture of a supermarket shelf full of beer and asked us ‘How are you going to be different from all that lot?’.” Part of the answer lay in finding a distinctive brand for the beer and the brewery. Their meeting came during the run-up to the independence vote and so questions about Scottish identity were high on the agenda. “It was wrapped up in the same time as the referendum,” Lynne continues. “Everything was being represented as haggis and thistles and tartan and it made Scotland look very inward looking, which is not how we felt at all.”
“We wanted to challenge two perceptions – people’s views of beer and people’s views of Scotland,” Kirsty says. “For most of the 20th century, the image of beer was very unsophisticated, very laddish, particularly when it came to lager.
“Craft beer has done a hell of a lot to change that. But, actually, beer is still very male, in a hipster, bearded, hoodie way. Craft beer has hugely challenged people’s perceptions of beer, but we actually feel it’s still a bit male – so there’s more we can do with it.
“Edinburgh is our home – that’s why the brewery is here. But we thought about what we wanted to say about Edinburgh and about what sort of Scottish business that we wanted to be. At that time, there was a lot of unhelpful stereotyping – both within the country and outside – so we wanted our business to represent the best of Scotland and Edinburgh at its best can do that. The best of Scotland, is its creativity and its inventiveness and its welcoming the world and exporting.”
Those desires to challenge perceptions of beer and of Scotland led to a set of ‘values’ for the business – ‘unisex, creative, playful, open-minded and crafted’. “We wouldn’t patronise or specifically target girls, but we would avoid being macho – half the company being female really helps with that,” Kirsty adds. “We think that’s something that’s being missed out in beer.”
Given John’s experience of managing global brands and Kirsty’s background in advertising – along with Lynne’s talent for organising the other two – it perhaps comes as no surprise that the family business would have a clearly thought-out set of ‘values’ and ideas to underpin its identity. But how did that identity become the Edinburgh Beer Factory and Paolozzi lager?
“Eduardo Paolozzi was born in Leith in 1924 to Italian parents and he was one of the pioneers of the pop art movement,” explains Kirsty. “He also became a very influential sculptor – creating the foot and the hand at the top of Leith Walk in Edinburgh.
“What we wanted to say about Edinburgh was perfectly exemplified by him. He’s a great way of challenging stereotypes about Scotland – he’s not your typical Scot because he’s not called ‘Jock McTavish’.” John adds: “People have asked why we’ve named the beer after an Italian because it doesn’t sound Scottish – but that’s exactly the point that we were trying to make. Not everyone in Scotland is called MacDonald.
“We’re the Edinburgh Beer Factory because the ‘factory’ is a nod to Andy Warhol, who had his pop art factory, but also Tony Wilson’s Factory Records in Manchester. If you think of Factory Records then you can come out with different bands from the same label. We don’t have to say we’re going to do a Paolozzi India pale ale (IPA) or a Paolozzi bitter. We can create another name.”
Having a lager as the brewery’s first product was also another way of challenging expectations about craft beer. While many micro-breweries will follow an established path of producing an IPA, an 80 shillings-style beer, a golden ale and perhaps a stout, the Dunsmores wanted to do something different.
“Paolozzi came up with the phrase the ‘sublime in the everyday’, which is what pop art is all about,” says Kirsty. “That’s a perfect brief for a beer because beer is such a drink of the people. We thought we’d take lager – which is so well known, especially in Scotland, and which is usually a mass-produced style of beer – and show how excellent it can be, how delicious it can be.”
They settled on the Helles style of lager from Munich in Germany, which has more body than the lagers traditionally brewed in Scotland. In German, ‘lager’ means ‘store’.
It’s an interesting space to be in – while Tennent’s is unquestionably Scotland’s most famous lager, Clackmannanshire-based Harviestoun Brewery has been winning awards for its Schiehallion craft lager stretching back to 1999, before everyone started using the word ‘craft’, while former BQ Scotland cover star Petra Wetzel launched Glasgow-based West Brewery’s St Mungo’s lager back in 2008 as a hybrid between a true Bavarian Helles and a northern German Pils, and Dougal Sharp from Innis & Gunn in Edinburgh unveiled his Helles-style lager in 2013.
Paolozzi struck a chord with drinkers right from the get-go. Within just weeks of being launched, it won a gold medal from the Society of Independent Brewers (SIBA) and was named by Time Out magazine as one of the top five craft beers in Edinburgh.
One of the factors that sets the business apart – alongside the taste of its lager, perfected by head brewer David Kemp – is the attention to detail. The team rescued a 1970s Citroën H Van from rural France and now use it as a mobile bar to promote the brand.
The blue label on its bottles features a Paolozzi print called ‘Illumination and the eye’. The firm approached the Paolozzi Foundation, the artist’s estate, to ask if it could use the brand name and received its blessing, with the business making a healthy donation to the charity, whether it makes a profit or not. “Paolozzi’s sister has been to visit the brewery and loves it,” John says.
The company’s current run-rate puts it on course to turn over more than £450,000 during its current financial year. It is forecast to reach the breakeven stage when revenues hit £1.5 million, which was originally predicted in its fourth year in business but which John now expects to come part-way through year three.
“The one luxury we’ve got is that, by not having external shareholders, we’ve got time,” he says. “We’re not sitting here thinking about how we’re going to get a 20 per cent internal rate of return or anything like that. That’s important – our time horizon is quite long.”
“If you did have that pressure then we would probably have called our first beer ‘Edinburgh Castle lager’ and started exporting it straight away because Paolozzi lager has quite a
complex backstory that needs to be explained,” chips in Kirsty. “If people like the story then it’s really rewarding. It takes time to do it, but we think we’re going to get to a better place in the long-term.”
Those long-term plans include expanding sales into Europe. The team wants to target cities with connections to Paolozzi – such as London, Hamburg and Munich – as well as other cosmopolitan locations like Paris, Rome or Vienna where the Edinburgh ‘brand’ already has traction.
Having run brewing giants S&N and C&C, what attracted John to set up a small family business? “The thing that’s in short supply in businesses isn’t money, it’s imagination,” he says. “It’s really hard grinding away in a big organisation and keeping your imagination afloat. It’s almost impossible.
“That’s why there’s so much growth in small companies – it’s so much more enjoyable and it’s an environment that’s so much more conducive to people applying their imagination. That’s what’s missing in most organisations.”
“There’s a tension in a small business – there are only 13 of us and four of us are family members,” explains Lynne. “You try to leave the argument at home about who hasn’t taken the bin out or who hasn’t walked the dog, but that’s not always possible.
“John has run big businesses and he’s now running a small business, so there’s a difference between sitting as a chief executive talking to heads of functions in a big company and sitting as a chief executive in this organisation and talking to a brewer who qualified last year. That’s been a process for John to adapt to and so part of my role is being the translator.”
“I don’t really miss anything about larger companies,” John adds. “It’s very tiring spending so much of your time on that word ‘alignment’. Basically you’re trying to get a large group of people down a very narrow channel so that they’re all after the same goal – and that’s
“The only bit I miss is the fact there’s now only a small group of us – so if a job needs done it needs to be done by one of us. We were at a pub at the weekend doing a promotion. In a sense that’s the best and the worst of a small company because it’s exciting – but it can be pretty knackering as well.”