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Moosehead resurgent.

Canada's Moosehead Brewery is looking to rebuild its U.S. franchise.

The noble head of a bull moose graces every can or bottle of Moosehead beer, and the symbol is an apt one for the Moosehead Brewery of New Brunswick, Canada. The stubbornly independent Moosehead is now the largest Canadian-owned brewery, with Labatt and Molson now both majority foreign-owned.

As Molson and Labatt have risen to national dominance, Moosehead has kept firm hold of its home bastion in Canada's maritime provinces. Now, as in the U.S., myriad smaller Canadian breweries are springing up, and it's not such a disadvantage to be small. Like some of its U.S. counterparts, Moosehead can now wear the mantle of "niche brewer."

Moosehead has also maintained a respectable niche in the U.S. imported beer market, although that niche has shrunk from where it was ten years ago. Back in the '80s, Moosehead was one of the hotter imported brands in a hot U.S. market. In the interim, the brand has slipped in the import rankings (#5 in 1986, with 464,516 barrels, to #11 in '95, with 240,506 barrels).

The brewery, and its American importing partner, the Guinness Import Co., are working to stoke the fire. "We ran focus groups to find out why demand for the brand has declined," says Bob Bottini, Moosehead group marketing director. "We found that the brand has a strong image, but there was lack of awareness and visibility. We found that most of the brand's decline was due to passive omission, and that's something we can change. We want to sustain and grow the franchise, and we think there are some things we haven't tapped, including possible new brand activity. There's a lot going on in the Canadian and U.S. markets, and we want to maintain our premium position."

In a crowded U.S. market, that will be a challenge, but considering how far the company has come in its almost 130-year-old history, this next set of hurdles is relatively straightforward.

Today's Moosehead brewery owes its start to a redoubtable woman named Susannah Oland. Like many of today's small brewers, Susannah started out brewing at home, where her Brown October Ale enjoyed great acclaim among family and friends. Her husband, a railroad man named James Dunn Oland, encouraged her to turn her brewing into a vocation. With the financial assistance of a family friend, Capt. Francis DeWinton, the Olands founded a small brewery in 1867.

In those days, Halifax, Nova Scotia, was a bustling British colonial port, and there were plenty of thirsty redcoats and jack-tars about. Not surprisingly, the Olands played to this market, calling the company the Army & Navy Brewery.

Unfortunately, James Dunn Oland was killed in a riding accident in 1870. Capt. DeWinton was transferred, and the survival of the family business fell squarely on Susannah's shoulders. She marshalled her resources to continue the brewery, buying out her shareholders, and renaming the place S. Oland Sons & Co.

A few years later, the brewery burned to the ground, and the indomitable Susannah was forced to rebuild from scratch. This she did, building a larger brewery on the original site, completed in 1880. By then her sons had reached their majority and were able to gradually take over the business. Susannah retired to Virginia, where she died in 1886 at age 67.

Fate dealt Moosehead a few other jokers over the years. The brewery burned down again in the late 1880s, was rebuilt, and at the tail end of World War I it was destroyed utterly by the great Halifax explosion of 1917 (An ammunition ship headed for Europe collided with another ship in Halifax harbor and detonated, killing 2,000, including Susannah's son Conrad, the company brewer).

The company was rebuilt yet again, and opened its first brewery in St. John. Philip, or "P.W.", Oland, today's chairman of the board, began working in the brewery in the 1930s, and still occasionally visits the plant to oversee operations. Everyday management of the plant has devolved on his son Derek, Moosehead's president and chief executive.

"My challenge is to leave the company in better shape than when I found it," Derek says, "and it is in pretty darn good shape. We have 40% share in the maritime market. Our challenge is to build on that base and make Moosehead a world brand. As it is, 40% of our production goes offshore to nine markets, including the U.S."

The company has lately consolidated its operations at its St. John's, New Brunswick plant, closing its Nova Scotia brewery. The St. John's plant is modern in its appointments, with profits continually recycled into plant improvements. Indeed, the plant equipment is cutting edge in many areas, especially in the packaging department. "We haven't hesitated to spend money to bring technology into the brewery," Derek says.

The Moosehead brewery now produces 800,000 barrels annually, with a range of products that includes Moosehead Pale Ale, Moosehead Lager, Moosehead Dry, Ten Penny Ale and Clancy's Amber Ale. The company also contract brews Molson Canadian and Molson Red Dog for the maritime provincial market.

The company's flagship product is Moosehead Pale Ale, (although it is not available in the United States; U.S. markets get the brewery's Moosehead Lager instead). Moosehead Pale is a true top-fermenting ale, brewed with 85% malt and 15% adjunct, and 16 international bitterness units (IBUs). The maritime provinces are still an ale market (In Nova Scotia, ale has 60% share), although in the rest of Canada lager holds 85% of the market.

Moosehead does not currently field any all-malt specialty beers, and the company discontinued production of its stout in 1980. "We've experimented with all-malt brewing," says brewer Dave McDonald, "but the Canadian customer doesn't appreciate the fuller flavor. As it is, our beers are heavy-bodied compared to the competition. Our newer beers come in at the lower hopping levels (14-17 IBUs) because the consumer doesn't want a bitter aftertaste."

Still, the company doesn't rule out further experimentation. "We're very cognizant of what's happening in the U.S. specialty beer market," says CEO Oland, "and these are exciting changes from our point-of-view. We're looking at that as any brewer and marketer should." As it is, Moosehead seems to be following the Rolling Rock model, in which a regional brand gets pricier the farther it is from its home market. "We mass market our beers in Nova Scotia," Derek observes, "but when we get outside the maritimes we're a specialty product."

Derek Oland has four sons, so the succession of a new generation of Olands seems assured. Derek's son Andrew, currently studying at the Harvard Business School, grew up working in the bottleshop and brewing departments, becoming the sixth generation of the Oland family to work in the brewery.

Certainly Susannah would be proud.
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Title Annotation:Moosehead Breweries Ltd.
Author:Reid, Peter V.K.
Publication:Modern Brewery Age
Date:Jan 29, 1996
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