Interview with John Sleeman - July 2004
On April 20, Sleeman Breweries of Ontario announced that they had completed a deal to buy one of Canada's craft brewery treasures, the Québec-based Unibroue, an arrangement which closed on June 22.. On that same day in April, I wrote an open letter to John Sleeman, the head of the brewery, and published it in the Bright Beer section of World of Beer. (The complete text of the letter.)
My letter was widely read both within Canada and beyond the country's borders, and provoked numerous responses, including many from Unibroue employees. I even received a reply from one rather highly placed member of the Sleeman management team, Mr. John Sleeman himself.
Following several follow-up communications, Sleeman and I agreed to meet for a chat at the end of May. It was a discussion that left me feeling cautiously optimistic about the future of Unibroue under Sleeman, an optimism born of the ceo's evident sincerity and interest in the business, but qualified by the possibility that Sleeman Breweries itself could become the subject of a takeover bid by a larger rival. What follows are some of the highlights of my almost two hour conversation with John Sleeman:
When did you first become interested in Unibroue?
Oh, I've been interested in Unibroue for a couple of years now. Well, I've been interested for longer than that, but my first discussions with (Unibroue head) André Dion were probably a couple of years ago.
What was the attraction?
I've tried to build Sleeman Breweries on the pillars of good, strong regional breweries, with the overlay of Sleeman brands nationally. Cookie cutter doesn't work, at least in my experience, so we don't try to turn everything into a Sleeman clone. What I want is a company that has a good strong, loyal following regionally. Unibroue has that.
Unibroue's beers are unique, certainly much different than those of your other breweries. Any plans for them?
Paul Arnott is the head brewer and we've signed a long-term contract with him. I've given him my personal commitment that I won't let the accountants near him, that I want him to continue to use the ingredients and the brewing methods to get the products to where they are now. I've told him to come to us if he wants money to make the products better than they are now, although I can't imagine that would be possible, because they're superb products now.
What comes to mind when you talk about Unibroue is the fact that it's not exactly a cost-effective operations, what with the expensive ingredients, warm-conditioning of the bottled products, etc. What do you make of that?
We're not buying it because we want to strip costs out of the brewery. It's a very profitable company; their margins are better than Sleeman's.
Unibroue built a distillery a while back. Will Sleeman continue to support that project?
I'm excited about continuing with that distillery project. Just as there is increased excitement about small breweries, I think there's a rejuvenation of interest in small distilleries. Canada has this reputation that all we make is rye whisky that mixes well with Coke. Well, there's a little distillery out on Cape Breton Island that makes a damn fine single malt scotch, in my opinion, a little young but good. I applaud the enterprise. I don't want to kill the distillery out there, I want to find out about it and see if there's some way we can encourage its development.
What's your favourite Unibroue brand?
Well, there's a story behind it, but my personal favourite is actually Raftman. That has more to do with me growing up in Ottawa and going across the river to Hull (Québec) to drink in at a pub called the Raftman when I was underage, or at least underage by Ontario standards. But you know what, honestly, I haven't yet tried them all. They've got an awful lot (of brands).
Perhaps too many?
One of the concerns people have voiced is that we're probably going to look and see that they maybe have a few too many brands and that we're going to try to harvest them. But each one has a loyal following, and we don't want to rip the heart and soul out of the company by suddenly discontinuing the small brands. We're going to listen to the sales people and the marketing people and let them explain to us about the brands and which ones they'd like to see stay. They may come to us and say that there's a couple we should probably stop making, but we're not going to make any arbitrary decisions.
You said that Sleeman can actually learn from Unibroue vis-à-vis the U.S. market.
Yeah, a lot. We're not nearly as successful at it as they are. They have done a superb job of getting distribution and shelf space in a lot of states. So we want to find out what it is they did -- and those people, their export people, are staying with us, by the way -- and is it the kind of thing Sleeman can benefit from or do the Unibroue products represent such a unique selling proposition that it doesn't apply to Sleeman.
There's an argument that the addition of Unibroue to Sleeman makes Sleeman a better takeover target.
Sleeman is always a takeover target, with or without Unibroue. Control of Sleeman rests in the public market, so if Molson or Labatt or some offshore brewery wants the company, there's nothing I can do about it. I don't lay awake at night worrying about it, because if you can't prevent something, then you might as well just get on with what you're doing. At the end of the day, from a takeover perspective, if somebody wants the company, I'll take off my John Sleeman ceo hat and put on my John Sleeman chairman of a public company hat and, regrettably, will tender my shares. But it's not part of my plans.
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