Brewed in the North: A History of Labatt’s, 2019

An in-depth examination of this iconic Canadian brewer was long overdue. Tracing its beginnings to two decades prior to Confederation, with sustained roots to its original location and continued operations in multiple provinces, Labatt’s remains synonymous with beer in this country. Though foreign owned now for a quarter century, it ranks as one of the two largest brewers in Canada and is still popularly regarded as one of our few national beer brands. Labatt’s story needed to be told, to not only showcase its achievements in the world of brewing through periods of massive change and upheaval in both the industry and Canadian society, but also to explain how its business success was never assured, to the point of its eventual demise as an independent brewery in 1995 when taken over by Belgian-based Interbrew. Matthew Bellamy, Associate Professor of History at Carleton University, has produced a first-rate study of the rise and fall of a Canadian brewing giant.

This history of Labatt’s is organized into three parts. Part One, “Family Firm to Managerial Enterprise,” focuses on the brewery’s first seven decades, from its origins in London, Ontario to the opening years of Prohibition. It may surprise that founder John Kinder Labatt did not set out to establish a brewery upon his arrival in British North America, thus setting him apart from entrepreneurial brewers John Molson, Alexander Keith, John Sleeman and Thomas Carling. He instead was committed to becoming a wheat farmer before partnering with brewer Samuel Eccles to purchase the London Brewery in 1847. He proved an astute and a fast learner when it came to the brewing business. Labatt recognized that the steady demand for beer, the immensely fertile land that produced steady yields of hops and barley, and the rapidly multiplying railway links throughout Upper Canada added up to an opening for the business. By 1855, he had become sole owner, and the brewery would remain under family control for three successive generations. This period was characterized by numerous opportunities and challenges, including the rise of the temperance movement and a failed attempt to expand into the U.S. market. Increasing scale and scope was key to Labatt’s survival, though failing to recognize the new preference for lager and to market its products to those of diverse backgrounds, as well as ineffective leadership among the third generation, hampered growth and forced the company to become risk averse.

Part Two, “State Regulation and Expansion”, chronicles the company’s efforts to endure between the 1920s and the post-World War Two period of consolidation. Bellamy underlines the critical role performed by general manager Edmund Burke in guiding the company through Prohibition and saving it from certain bankruptcy, even if his solution was running bootlegging operations south of the border rather than diversifying into other businesses as did many other major brewers. The Great Depression, Second World War and the postwar decade brought fresh challenges, including the return of the temperance movement, but the company persevered and even grew due to gains in operating efficiency, the cultivation of a new image espousing corporate responsibility, and a policy of expansion via plants from coast to coast.

The third part, “Multinationals and Globalization”, describes the rise of Labatt’s within a growing national brewing oligopoly that took shape in the 1960s, and its struggles to stave off takeovers, initially by American brewer Schlitz. Labatt’s marketing department focused on creating a national brand while the company moved to diversify operations. The 1970s and 1980s witnessed the home-grown conglomerate John Labatt Limited become one of the country’s largest corporations, its brewing operation joined by companies in the food and beverage, and sports and entertainment industries. In the 1980s, Labatt’s aided in the Americanizing of Canadian beer tastes, while also undermining sales of its national products, by brewing popular American brands. Between 1990 and 1995, the restrictive nature of federal and provincial regulatory regimes disincentivized international growth, while a series of strategic blunders, including over diversification, helped end the company as an autonomous Canadian enterprise. While Bellamy convincingly argues that decisions were often the best choices for the time, he does not portray the company as a victim of forces beyond its control. He points to flaws in judgement, excessive overconfidence, and other self-inflicted reasons for the company’s demise, including losing sight of its core strength and an inability to recognize the rising interest and potential market for craft beer.

Bellamy offers more than a conventional case study approach in this business history, for he further considers his subject through four analytical portals: ownership and control structure; state regulation and public relations; brands and brand management; and consolidation and globalization of the brewing industry. The nature and role of family relationships to the success of the brewery is weighed against the decisions made by professional managers, finding that individual character, motivations and capabilities of those in charge determine the success and survival of firms. Labatt’s response to ‘prohibitionism’ as a cultural and political force serves as an interesting model for how a company influenced cultural attitudes towards its product and the state’s regulation of the industry. Examining the obstacles to creating a national brand across multiple identities, and attempts to overcome them, reveals lessons for building and managing brands within the Canadian context. Bellamy also contributes to a broader understanding of the causes and ramifications of concentration and globalization in the brewing industry by assessing the effectiveness of company decision-making during the late twentieth century. This microhistory, then, helps inform our understanding of larger issues embedded in Canadian culture, morality and identity.

Drawing on a wealth of primary sources largely unavailable to researchers prior to Labatt’s donation to Western University Archives in 2011, this book is the first full-length scholarly study of the company. It also introduces historians of business, as well as those of Canadian society and culture, to the Labatt Brewing Company Collection, one of the largest corporate archives in the country and a treasure trove of information for future researchers. Finally, it grants well- deserved scholarly recognition to the Canadian brewing industry, which until very recently was a realm left largely to non-professional historians. Raise a glass. Bellamy’s superbly readable study was worth the wait.