First published by Business HQ on 20 June 2019
WEST Brewery founder Petra Wetzel is the first to admit she’s had a gilded life. Having grown up in what she describes as a privileged household in rural Bavaria, her parents put up the cash not only to enable her to start WEST but to buy her first home too, even bailing her out when the business temporarily faltered in 2008. To say she has been lucky is an understatement.
But as a socialist at heart Ms Wetzel is aware that you can have too much of a good thing, which is why, with WEST proving to be a resounding success, she has decided to give it away lock, stock and beer barrel to the people who have helped her build it.
“I probably have never had a burning desire to own a Ferrari and I love holidays but I don’t need to have a super-yacht,” she explains. “What’s important to me is time with friends and loved ones and I love being out in the fresh air. Those things are free.
“The first few years in business were a struggle and I didn’t think about succession, but when it started to make money and grow I started to think about what I would do with the business. At that point and even today I love what I do so I don’t want to retire to live on a beach, but I really want to give something back to the people who have helped me achieve what I’ve achieved.”
Starting this year Ms Wetzel will transfer £3,500 worth of shares – the maximum allowed under tax rules – to every employee, every year until she no longer owns any of the business herself. Each employee will get the same amount, regardless of what their role is, with the one caveat being that they must have worked for the firm for a full year before receiving their first share.
Crucially, unlike the employee-ownership models used by the likes of Richer Sounds or John Lewis, where shares are held in trust rather than being handed over to staff, every WEST employ will directly own their own shares, meaning they can take them with them should they ever decide to leave.
“These shares are theirs no matter what,” Ms Wetzel says. “That was important to me.”
Though the move is unusual, and WEST staff and other business owners questioned Ms Wetzel’s sanity when she first revealed her plan, for her it makes perfect sense given that she has already benefitted financially from the business’s success – and will continue to do even as her shareholding reduces. While she also did not want the spoils of that success to be handed to her teenage son Noah on a plate – “I didn’t want him to grow up thinking ‘I don’t have to work hard because my mum’s rich and I’m going to be rich’” – mostly Ms Wetzel opted to hand the business over because she simply wanted to see the large pot of wealth her parents’ initial investment created go on to germinate lots of other pots.
“If you’re in your 30s now and you’re thinking about what to do for the rest of your days, if you stay with WEST you’ll be able to build up quite a nice pension pot,” she says.
It was the same idea that led Ms Wetzel to set up investment vehicle WEST Women in 2016, with the idea of the fund being to give other women, many of whom struggle to secure financial backing for business ideas, the means of replicating her success.
“WEST Women was very much set up because by that point I’d got WEST stable, growing and profitable with a great team and I thought where else can I make a difference,” she says.
“So many people have the ambition of becoming the biggest, but I never had the ambition to make WEST big, I just wanted it to be successful and profitable.
“I really like start-ups, building small teams, leading by example and pulling people along; the fund was very much about creating other successful smaller companies.”
So far Ms Wetzel has invested £150,000 into three businesses, one of which – flavoured-water company Utopia – is in the running for £100,000 of Scottish Edge money. Established by entrepreneur Martha Mackenzie – “a really bright spark who just needed that backing” – Utopia is setting out to transform the way children consume soft drinks by offering unsweetened flavoured waters in the type of cans that are far more easily recycled than the single-use plastics that currently dominate the market. It is a philosophy Ms Wetzel was instantly drawn to.
“The reason Utopia is called that is because wouldn’t it be nice if all children were in good education, everyone was eating well, everyone had good healthcare and everyone had a nice home,” she says. “The people who have worked with me for a long time know I see the world that way.”
Not that she is interested in backing good causes just because they are good causes, with Ms Wetzel noting that she will only consider approaches from entrepreneurs that have a clear head – and ambition – for business.
“In the beginning I got lots of approaches but I always said I’d only invest in businesses that are not lifestyle businesses – there’s no point in investing in someone who wants to run a cottage industry from their kitchen,” she says. “This is about creating jobs, creating tax income for Scotland and creating the next generation of leaders.”
Though Ms Wetzel has not yet revealed the identity of the other two businesses she has backed, she stresses that she will not stop at three, with due diligence currently underway on another potential investment.
“I’d like to continue to do that for a very long time,” she says. “Long after I’ve handed over the reins of WEST completely I’ll continue to be involved in business as an investor.”
And, just as passing on ownership of WEST could give some of its employees the opportunity to pass on some wealth in future years, Ms Wetzel hopes that by investing in fresh talent via WEST Women others will be able to go on to create the same kind of opportunities as she has.
“I want to get these women to the same level I was at when I started the fund so they can then do the same,” she says. “I hope that it will have a trickle effect. We’re talking about a relatively small amount of wealth, but if everyone did it think about the difference it would make.”