Читать книгу Why Mexicans Don't Drink Molson - Andrea Mandel-Campbell - Страница 8

INTRODUCTION

DAVID HOOD WAS leaving the American Bar in Düsseldorf late one evening when he was stopped by two stern-looking policemen, armed with ak-47s, demanding his identification papers in clipped Germanic tones. Startled, the Canadian businessman squinted in confusion, fumbling in the semidarkness for his wallet as the stone-faced officers looked on in silence. But as soon as Hood pulled out his Canadian passport, the gun-toting police broke into broad grins, summoning up what appeared to be the only English words they knew, chiming in unison: “beer, hockey, Wayne Gretzky!”

Beer. What could be more Canadian? With 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 — are confronted with increasing competition, consolidation and the rise of new economic powerhouses like China, India and Brazil. And as with beer, it is a battle we are losing.

The loss of Canadian-headquartered companies with the potential to be global players is so common that it barely merits a headline — the same clutch of concerned citizens trundle out for a perfunctory lament before Bay Street bankers and lawyers are lured by the next get-rich-quick income trust. That Dofasco, the country’s premier steelworks, would be tossed around like a football in a global tug of war— between the Europeans and an Indian billionaire who started out in 1976 with one steel mill in Indonesia— does not bode well for Canada’s ability to harness the powerful levelling force of globalization.

If there is one area where Canadians have distinguished themselves in international business, it is mining. And yet look at the tragedy that has befallen what should be Canada’s one uncontested world-beater.

It almost had a fairy-tale ending. After nearly a year of wrangling spurred by the planned merger of two Sudbury mining icons, inco and Falconbridge, Vancouver-based Teck Cominco swept in like a white knight, poised to trump a takeover offer of the pair by American copper giant Phelps Dodge. Teck’s brash $20 billion bid wowed the markets with its bold claim, so uncharacteristic for a Canadian company. During the few hours that it seemed Teck would prevail, CEO Don Lindsay declared: “I believe that it’s important that there be Canadian champions on the world stage, and not just in mining.”³

But before Lindsay had a chance to imagine what it would be like to head Canada’s first and only “super major” mining company, his dreams were dashed by Brazil’s Companhia Vale do Rio Doce, cvrd, and its eleventh-hour all-cash offer for inco. Even before the world’s largest iron ore producer sealed the deal, it announced that it would delist inco from the Toronto and New York stock exchanges. As for Falconbridge, the Swiss–Anglo mining firm Xstrata swooped in with a $20.9 billion hostile takeover. The acquisition has launched what was, until recently, a little-known ferro-chrome business, with us$500 million in sales in 2001, into the elite Top Five of global mining companies with an enterprise value approaching us$50 billion. Just hours after assuming the reins, Xstrata cleared out Falconbridge’s Toronto head office of senior executives, including almost its entire board of directors. While Toronto will be the headquarters for the company’s nickel division, it will lose control over the former Falconbridge operations in seventeen countries, which are either being sold off or folded into the Xstrata empire.

Peter Munk, founder and chairman of Barrick Gold, the world’s leading gold producer and, together with Teck, the only sizable Canadian miner left, lashed out at the Canadian industry’s lack of leadership and vision. How, he wondered aloud, did the opportunity for a three-way tie-up between Teck, inco and Falconbridge, and the chance to forge a global powerhouse, turn into an auction of the country’s crown jewels? “This opportunity will never arise again in your generation and not in your children’s generation to put together a group like that,” Munk lamented. “That’s when you’ve got to have the determination and the balls and the courage.”⁴ Within days, two of Canada’s most historic, established companies were wiped off the map. “We are no longer a branch-plant economy,” surmised John Gruetzner, a Beijing-based Canadian business consultant. “We are a non-headquartered economy.”

Some people might say, so what? The nickel still has to be dug out from under the Canadian Shield, and somebody still has to forge the steel at Hamilton Harbour. Beer will always be brewed in Canada, even if it’s Coors or Budweiser. If that’s all Canadians aspire to, fine. But without head offices to hone management skills, to develop international networks and ultimately to make Canadians responsible for their own destiny, we become little more than “Mexicans with sweaters” — a quaint term coined by the American movie industry to describe Canadian film crews.

Just as U.S. corporations set up factories south of the Rio Grande to take advantage of cheap Mexican labour, Hollywood sends its film production north so that it can hire lower-paid Canadian sound technicians and camera operators. The high-paid “talent,” however — the star actors, directors, screenwriters and producers — are all still American. “Anybody who says head offices don’t matter is dreaming in Technicolor,” says Richard Haskayne, one of Canada’s foremost corporate tycoons and chairman of TransCanada PipeLines.

Just ask Francesco Bellini. Born in the central Italian town of Ascoli Piceno, Bellini immigrated to Canada in 1967 and received a doctorate in organic chemistry from the University of New Brunswick. When the U.S. pharmaceutical firm he worked for in Montreal decided to move its offices to Boston, Bellini opted to stay put, founding BioChem Pharma in 1986. The pharmaceutical start-up developed 3tc, the first anti-hiv compound drug, which became the most-prescribed aids treatment in the world. Yet, despite the firm’s tremendous success, it no longer exists; it was sold to Shire Pharmaceuticals of the United Kingdom in 2001 for $6 billion. Within two years, the company’s five hundred staff were fired and its once-impressive offices, located on a leafy high-tech compound in Laval, emptied. “They took the profit and destroyed the company,” says Bellini. Also gone is the estimated $5 million a year BioChem used to donate to various charitable causes. “When BioChem was here, I don’t know how much money I gave to local arts and the local university,” Bellini says in his thickly accented English. “Now it’s all gone.”

For Bellini, who dreamt of creating Canada’s first stand-alone pharmaceutical company, it’s a huge disappointment. But he feels he had little choice: when he wasn’t bending over backwards to convince skeptical local investors that a Canadian company was actually good enough to compete internationally, he was fending off stock market speculators who were pressuring him to cash in and make a quick buck. In 1998, several small bombs exploded outside BioChem’s offices. Bellini thought it was the work of aids or animal-rights activists. In fact, the culprits were short-sellers looking to push the company’s share price down so that they could buy the stock cheap and then cash in on their put options. “If you make a big discovery,” Bellini adds, “local investors will push you to sell it, to do a venture with an outside company, because they want the profit right away. They don’t realize that if you keep it, you can build something.” Bellini was finally convinced to sell the company when he couldn’t find anyone to replace him. Every potential manager he looked at “just wanted to ride the stock and get out.”

Despite Bellini’s frustration, the self-described “scientist–entrepreneur” couldn’t help but get back in the game. In 2002, he took the helm of Neurochem Pharma, which is developing a treatment for Alzheimer’s, pouring $25 million of his own money into the company. Bellini predicts it’s only a matter of time before his new venture suffers the same fate as BioChem. “I guarantee this company is going to grow very high and will be sold off — puff,” he says with a wave of his hand. “It’s like you have a good hockey team, and every time you go to the arena the people boo and tell you to get out — or they don’t come at all. Imagine playing to an empty arena.” It won’t affect Bellini, who has made a mint from the pharmaceutical business, but he worries about the big picture. “I win either way — I make my money and that’s it, I go fishing. The problem is for the local economy, which is going to suffer.”

It’s too bad, because if Canadians were just willing to stick it out and have the confidence to build something of their own, they could be world leaders. As Bellini points outs, one year after Shire sold BioChem’s vaccine unit, which at the time was one of the biggest in the world, for us$150 million, it was resold for approximately us$1.4 billion. “That shows we have good vision here, but we’re not willing to support it,” he says. It’s a quality that the Italian immigrant acknowledges has always distinguished him from his fellow Canadians. He mortgaged his house so that he could buy more shares in BioChem, but “a Canadian would never do that,” he admits. “I believed in what I was doing, and I believed that one day it would be a success. And for sure, I made a lot of money; my partners made money too, but much, much less. We could all have made a lot of money, the same amount, but I had a different attitude — you have to believe in yourself, and probably that’s what Canadians lack.”

But while Bellini is forgiving of his compatriots and grateful for the opportunity to pursue his dreams, Howard Balloch positively bristles at Canadians’ constant need to second-guess themselves. Canada’s former ambassador to China, Balloch left a twenty-five-year career in the civil service to open an investment boutique in Beijing. The crisply pressed, bow-tied diplomat is going head-to-head with bulge-bracket investment firms like Goldman Sachs and Merrill Lynch in one of the world’s most sought-after markets. “My goal is to build the best little investment boutique, and I don’t care who I’m up against,” he says. “I’m going to win.” What Balloch doesn’t understand is why so few Canadians seem to share his boundless confidence. “Where’s the belief that we can conquer the world? We’re every bit as bright, we have smart people from all over the world who come to live here, we speak a multitude of languages, and we have natural resources,” he charges. “What is it we don’t have that means we can’t compete? We should be on top of the world. We should be better than the Americans, faster than the Germans and more culturally conscious than the Japanese.”

After watching “the earth’s centre of gravity tilt” towards China in recent decades, however, there is one thing Balloch knows for sure: if Canadians continue to ignore these tectonic shifts, we will eventually fall through the cracks. The threat is all the more dangerous because it won’t be a calamitous collapse, like that of Argentina, but a slow, stealthy slide that will sneak up on us while we snooze, our bellies still uncomfortably full after gorging on a feast of oil sands and high copper prices. “Life is too easy, and Canadians are happy in their kind of graceful decline. We are determined to become the Argentina of the twenty-first century,” says Balloch. “We’re not under threat, we’ll just lose a little market every year, get a little smaller, another country will pass us on the scale and we’ll lose another hockey team.”

It’s a far cry from Sir Wilfrid Laurier’s bold pronouncement that the twentieth century belonged to Canada. From Laurier’s vantage point, overseeing a golden age of economic prosperity, an influx of immigrants eager to carve out a new life for themselves and the building of the country’s second transcontinental railway, Canada’s potential seemed to know no bounds. But like a locomotive that has run out of steam, Canada’s promising future has lost its momentum, sapped by decades of disastrous government policy and a complicit citizenry. Somewhere along the way, we lost the faith in ourselves and, with it, the opportunity that was ours for the taking. Now, left without the necessary tools— multinationals — for negotiating in a globalized world, we are in danger of becoming collateral damage.

A growing number of Canadians see the danger. Gary Comerford is one of them. Working as a branch manager for Canada Permanent Trust in Hamilton in the mid-1970s, Comerford concedes his most serious concern was whether a personal loan or mortgage went bad. “My world was the mountain in Hamilton,” he says. “It was a very limited, very parochial view of the world.” Thirty years later, as a vice-president with Sun Life Financial, spearheading the insurer’s entry into the Indian market as well as working on its entry into China, Comerford admits his perspective has been irrevocably altered. “It has become clear and unmistakable in my mind that you have to operate on a world platform. Speed to market and quality of execution: that’s what protects jobs, that’s just the reality,” he says from his Toronto office. “That micro world that you want to live in, the world of protecting what you had in the past, you realize is a fleeting thought. It’s like keeping a butterfly in a bottle; it’s beautiful and you want to keep it there forever, but if you keep it in the bottle, it will die.”

It’s time to set the butterfly free. To do that, Canadians will need to smash through a lot of myths that we have constructed about ourselves — myths about how the world operates and our place in it. We need to stop thinking of ourselves as victims and become “more than an expression of geography.” It’s time to boldly embrace who we are, and not just behind the comfort and security of our drawn curtains. Canada and Canadian companies need to learn how to brand themselves, and not only to their home audience but to the world. As one frequent traveller to China put it: “There is a Starbucks opening on every corner in China— they have a great brand. Canada doesn’t have a brand.”

Molson had a brand. But the company never really believed in it. If it had, its breakthrough “I am Canadian” ad campaign would have become a rallying cry for taking on the world instead of a tired rant predicated on, as one marketing expert observed, a “single-minded, almost simple-minded patriotism.”⁵ By opting to coast on a cheap appeal to Canadian pride while selling its beer in ugly old brown bottles, Molson chose easy profits at home over global conquest. It was a formula that was doomed to fail. “They had such a short-term emphasis on profit that they fucked their long-term prospects,” says Michael Palmer of Veritas. Molson, concluded one newspaper columnist, inevitably became “trapped in its own marketing impotence.”⁶ The question is, will the rest of Canada make the same mistake, or will it find a new anthem?

In 1998, while working as a reporter in South America, I took a trip to Patagonia. Having crossed over the border from Chile, I had made my way to the windswept coastal town of Rio Gallegos in Argentina. Walking into a souvenir shop on the town’s deserted main strip, I noticed there wasn’t much to buy and I soon found myself talking with the store’s disconsolate owner. As he observed his empty shop, a layer of dust covering the leather boots and crude silver knick-knacks, he bitterly lamented the dire situation his country was in, made all the more evident when compared with the boom in neighbouring Chile.

Argentina produces more than twice as much wine as Chile and is believed to have even richer mineral deposits. Yet it is Chile, a tiny sliver of a country that is almost completely consumed by mountainous terrain and uninhabitable desert, that has emerged as the economic dynamo, while Argentina, a vast expanse of unmined opportunity, remains a backwater. “You know what the Chileans have that we don’t?” said the shopkeeper. “They know who they are.”

It’s something Canadians might do well to think about. At the time, Molson’s “I am Canadian” seemed to sum up the country’s essence. But on reflection, do we know what it really means?

* Interbrew subsequently acquired Brazil’s Ambev and is now called InBev.