Why Mexicans Don't Drink Molson. Andrea Mandel-Campbell

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СКАЧАТЬ its sturdy, honeyed depths, conjuring up images of ice-cold lakes, lumberjacks and rough-hewn beauty, it is one of the few things that seem to distinguish us from the rest of the world. As tightly bound to our still-wobbly sense of national identity as hockey, beavers, Mounties and medicare, it’s the one symbol of iconic Canadiana we could arguably slap a label on and sell around the globe. And yet we don’t. It speaks volumes that Canadian beer can capture the imagination of two policemen in Germany, the original purveyor of the barley beverage and home of Oktoberfest. Especially when just about the only place you can get your hands on a “cold one” is in Canada — and who knows for how much longer.

      The Europeans may have invented the bitter ale, but nowhere are the conditions more ideal for brewing beer than in Canada. Consider its two key ingredients, water and barley: Canada is the largest repository of fresh water in the world and the second-largest producer of barley, its northern Prairie climes ideal for making high-quality malt. The country’s reputation for superior beer has preceded it, while Canada’s two traditionally dominant brewers, Molson and Labatt, bathing in their own self-perpetuated praise, have routinely disparaged their closest competition, American beer, as the brewing equivalent to Jamaican bobsledding. So why is it, when it comes to the global beer industry, that Canadian suds are like the dried-up foam left at the bottom of an empty beer mug?

      In the 1970s, Molson was roughly the same size as Heineken, a beer dynasty based in the postage-stamp-sized nation of the Netherlands. Three decades later, the Dutch brewery is the world’s fourth-largest, with 115 breweries in more than sixty-five countries. Heineken sells some 119 million hectolitres across the planet while its eponymous brand ranks fifth among global beer labels. In contrast, the venerable brewery begun by John Molson in 1786, some eighty years before Heineken was born, manufactures a meagre ten million hectolitres or so and doesn’t claim a single brand among the world’s top twenty. As Michael Palmer, a longtime beer analyst and president of Toronto’s Veritas Investment Research, notes: “Molson literally spills more beer than it exports.”

      While the rest of the beer industry embarked on a global expansion spree in recent years, breaking into previously untapped markets like China and Russia, scooping up rivals and consolidating, Molson could barely bring itself to cross the U.S. border. Instead, it buried its head under the blanket of domestic security, selling off more than half the brewery to rival Australian and U.S. brewers in order to buy chemical companies and the Canadian hardware store Beaver Lumber. Dan O’Neill, Molson’s outspoken former chief executive, admitted to the company’s tunnel vision in a magazine interview as late as 2004: “When you look at the big brewers, you say Heineken — they were in a little tiny country, right? They recognized this need to get out many years before we recognized it. You look at Interbrew,* same thing — they’re in Belgium, and they go out. We just took too long to get out. So we’re chasing the big guys.”¹

      It’s not like the Montreal-based brewer, whose extensive empire had once included steamships, a bank and even its own currency, didn’t have the opportunity to branch out abroad. It had plenty. In the late 1980s, China’s Tsingtao Brewery was insolvent and looking for an investor to inject $20 million into the company. It was a small price to pay for entry into what has since become the world’s largest beer market. But Molson balked. “China was a long way away and putting $20 million into China was a dangerous thing to do then,” says an individual familiar with the negotiations. “It was a time when Canada had a huge ability to be a really strong player in China . . . Molson was one of the best breweries in the world. Why weren’t they going out and becoming world leaders?”

      Andrew Stodart, the former international brand director for Black Velvet, was convinced that he could do for Molson what he had done for Canadian whisky in international markets. The liquor marketer was confident that Molson Canadian had all the makings of a global brand and approached the brewery’s executives with a plan to break into Brazil and Russia. “I told them I could get Canadian launched in these markets as a premium-brand beer from Canada,” says Stodart. “We could sell it as the most refreshing beer from the coldest place on earth.” In Moscow, Stodart had potential customers lined up; a former Canadian from Halifax who owned a popular pub in the Russian capital was ready to actively plug the beer among his patrons. Molson would already have an important advertising platform that could easily segue into grocery store sales. But the brewer wouldn’t bite. “They were too afraid to take the risk,” says Stodart. “They felt they couldn’t compete against the Heinekens of this world.”

      Molson finally did make its way to Brazil. The oldest brewery in North America and the last of its continental brethren to venture abroad, Molson bought Brazil’s number two beer company, Cervejarias Kaiser, in 2002. But even then, it didn’t dare to introduce its own trademark brand into the world’s fourth-largest beer market. While bringing Canadian beer to Brazil somehow seemed absurd, Molson found nothing strange about peddling its Brazilian beer in Canada. Unfortunately, the Brazilian push was too little, too late, and Molson’s disastrous South American foray would cost it the company and Canada another chance to make it into the multinational big leagues.

      Just like Labatt Breweries, which was snapped up by Belgium’s Interbrew in 1995 and is now just one more subsidiary within the world’s largest beer empire, Molson was subsumed by U.S. brewer Adolph Coors. Carefully packaged as a “merger of equals,” the Molson–Coors tie-up was in effect a “bailout,” says Palmer, with the new entity’s headquarters in Colorado and Coors brass in the top executive jobs. Just one month after the 2005 deal, the new Molson Coors announced it would push into Russia, flogging guess what brand? Coors. Not long after, Molson Coors jettisoned Cervejarias Kaiser, selling out for a song. It retained just 15 per cent of the brewery in the hopes that it could at least use Kaiser as a platform for launching guess what brand into the South American market? Coors.

      Even back on Molson’s home turf, the once ubiquitous Canadian brand may soon be a candidate for the endangered species list. I was in a Calgary pub during the first game of the 2004 Stanley Cup playoffs, which pitted the Flames against the Tampa Bay Lightning. The scene couldn’t have been more Canadian: as giant-screen tvs broadcast the play-by-play from every corner of the bar, a waitress sporting a skin-tight T-shirt with “I love the Flames” stretched across her generous bosom waded through a sea of red hockey jerseys, a tray of beer expertly balanced on her fingertips. But I was hard pressed to find anyone actually drinking a Molson Canadian. At the table next to mine, a trio of mulletheads were squeezing quartered limes down the shafts of pale yellow Corona beers.

      It is a damning indictment of Canadian global ambition that such a lightweight beer, from a country with little in the way of fresh water or barley, would become the fourth-best-selling brand the world over. Although Corona is not a favourite brew among discerning Mexicans, the beer associated with eternal sunshine and aquiline beaches is sold, along with the entire lime-squeezing ritual, in more than 150 countries. In Canada, Corona is the leading imported beer, a category that has grown by 500 per cent in the past decade, to represent 10 per cent of the domestic beer market. Still, the Mexican pale ale is not the most popular beer in Canada. That spot is reserved for those namby-pamby Americans, with Budweiser and Coors Lite, the number one and two beers respectively, taking some 20 per cent of the market in recent years.²

      At the current rate of decline, Veritas’s Michael Palmer predicts the once-mighty Canadian beer brands will cease to exist. “We will still have regional brewers, but the great national Canadian beer brands — the Exports, the Blues, the Canadians — they are going to go the way of the dodo,” he says. “And it’s their own fault.”

      How did this happen? More importantly, will the rest of Canada suffer the same fate as its beloved beverage and sink into the suds of global obscurity? Canadians have long peered into beer’s pale golden depths for a reflection of themselves, and the state of the domestic beer industry should be a wake-up call to the perils of continued self-absorption in a globalized world. For what is happening in the beer industry is playing out across the economy, as Canadian companies — comfortable, complacent or crippled by government — СКАЧАТЬ