About 40 per cent of his $200-million in annual sales comes from producing beer on contract for foreign brewers seeking access to the North American market – extra production that delivers higher efficiencies. And Moosehead is a Canadian importer of products like U.S. craft icon Samuel Adams and German wheat beer Paulaner.
In Canada, Mr. Oland competes against the big players by knowing his home market and letting his marketing team loose with new brands when they see a void. But in this hypercompetitive sector, it is very hard to get beer price increases to stick, and so Moosehead pays a lot of attention to boosting productivity.
That’s the mandate of Andrew Oland, the eldest of Derek’s and his wife Jackie’s four boys. Andrew became president 31/2years ago, as the sixth generation of Olands to lead the business. To cope with the price-cost squeeze, he has driven a $20-million investment in productivity-enhancing technology and processes.
Derek, who still works out and runs, no longer gets much involved in daily management, but he knows what’s going on. He likes to describe his style as “nose in, fingers out.”
And he is proud of the way that Andrew, a 44-year-old Harvard MBA, and his younger brother Patrick, a 43-year-old graduate of France’s INSEAD business school, act as a team. Patrick, a chartered accountant, is the chief financial officer and “has a nose for costs,” the father says. Two other brothers, Giles and Matthew, have pursued careers outside the beer industry.
The observations are particularly poignant because Derek and Dick also worked together at Moosehead, before Dick left the company 30 years ago, after it became clear Derek was going to be their father’s successor.
Derek, Dick and their sister Jane grew up in a brewing dynasty, hailing back to the 1860s in Nova Scotia, where great-great-grandmother Susannah Oland brewed an “October brown ale” in her backyard. The Olands became brewers in the Halifax-Dartmouth area, but gave up the company in a financial crisis, and then the indomitable Susannah got it back again.
The Oland brewery was destroyed in the Halifax explosion of 1917 but the family rebuilt in two places. One Oland brother retained the Halifax address and another moved to Saint John. By the 1930s, two separately controlled companies had emerged – Oland Breweries in Halifax and a second business, to be named Moosehead, in Saint John. Two camps of Oland cousins duked it out for the Maritimes market.
That was the scenario in the late 1950s, when Derek’s father, P.W. (Philip) Oland was managing the Saint John brewery and a young Derek had no intention of joining the business. He wanted the outdoor life of a farmer.
He attended agricultural college in Montreal but couldn’t master the science courses. Leaving school at Christmas, he didn’t want to limp home to Saint John, so he spent seven months working at Molson’s brewery in Montreal – and he found out he had an aptitude for the old family trade, after all.
After earning a business degree at University of New Brunswick, he entered the company in 1962, joining the tiny sales force in the Saint John brewery, on a site where beer had been brewed since the 1860s. It was a company that generated revenue of just $7-million a year. Dick would later finish university and join the company on the production side.
Derek left Saint John to move his base of operations to the Halifax area, where Moosehead had been battling the local Oland cousins in the Nova Scotia market. That posting lasted 26 years. In 1971, his cousins sold Oland Breweries to Labatt, now part of brewing mega-player Anheuser-Busch InBev. Derek shut down Moosehead’s Dartmouth, N.S., plant in 1993, but continued to modernize and expand the hometown New Brunswick brewery.
The key to Moosehead’s survival as a family business, he says, is that, in generation after generation, family members who were active in the company bought out the shares of inactive members. “It doesn’t make you rich,” Derek points out. “You pay taxes of all kinds but it keeps the focus on the business itself.”