The scene: a Toronto Street trattoria just up the road from Conrad Black's former corporate digs. Observe the sun playing upon the ochre-washed walls. Observe the espresso martinis floating past (so vast and so deep). Observe the CEO with the cultivated stubble, the slightly gelled hair and the pierced ear. He extends a hand, says hello, orders a beer.
He is 25.
This is Jon Sherman's coming out, his corporate unveiling as the spanking new owner of Steelback Brewery Inc. He has just come from his lawyers' offices and is shaking his wrist in that tired-from-signing-all-those-papers kind of way. "As of this week," he says, "I am the sole owner of Steelback, and Mr. D'Angelo has no involvement at all."
Mr. D'Angelo would be Frank D'Angelo, the apple-juice-maker-turned-brewer-cum-wannabe-rock-star who racked up debts to Jon Sherman's father, Barry, to the tune of $100 million--more like $120 million if you tack on the interest. Last winter, a weary Sherman Sr., whose chief preoccupation is running generic pharmaceutical giant Apotex Inc., was granted court protection for D'Angelo Brands Ltd. (a juice company) and Steelback (brewer of Copperhead Pilsner, Steelback Thunder, etc.). The subsequent report from the court-appointed monitor itemized the chillers, the compressors, the 12 Steelback bikinis, the 29 pairs of Steelback sunglasses, the chronic cash deficiencies, and various and sundry beer-related trademarks.
Here's one: "No pain no Chain." What does that mean?
"You won't hear that any more," says Jon Sherman quickly. "Chain was a beer. It was a brand. It's no longer. You missed out."
"The beer that dances?"
"That was Tango. Again, you won't hear that any more."
Sherman doesn't want to dwell on D'Angelo, the P.T. Barnum of beer, who toured with his band, the Steelback 2-4, and bought time on Hockey Night in Can ada for commercials featuring the likes of Phil Esposito and, oh yes, himself.
Instead, the story is about J.R. Sherman Inc., Jon Sherman's private holding company that now houses Steelback, for which he paid $8 million. How the holding company came to be funded he won't say, but he is, as he points out, only two years out of school, and it was Sherman Sr. who kept shovelling money into the brewery to keep it alive.
For $8 million, young Sherman has bought himself a 30,000-square-foot brewery in the backcountry locale of Tiverton, roughly a three-hour drive northwest of Toronto.
You may well wonder, what does he know about the beer business? The unsurprising but pleasing answer is that his experience comes from the consumption side. "As a beer drinker, I can make a very quick evaluation whether or not I like a beer," he says helpfully. But there's more going on here than you might think. Sherman has a degree in industrial engineering and operations research from Columbia University. Post-graduation, he took a job at Apotex, spending seven months overseeing the installation of new technology to monitor the drug company's packaging line. Last spring, he threw it over to train for the 250-kilo-metre Gobi March foot race with his sister Alex--seven days of 50 C highs in the no-shade Taklamakan Desert, headed for Kashgar in China's far western reaches. Going in, he thought, How hard can this be? On day one, he thought, How much harder can this get? He took note of people older than himself, "marching through and, like, beating us."
His father, he says, supported the adventure. "He understands that for now, it's not the best fit for me," he says of Apotex. By drawing Jon into the brewery, the father gets to keep his son, if not close, then not much farther than arm's length. And Jon gets to develop an independent business persona, which he's just figuring out. On the day in May when the Steelback deal closed, he headed not to some chic restaurant for dinner, but rather, to softball practice (he plays outfield). All of which is to say that Sherman appears refreshingly down to earth.
This sets him apart from D'Angelo, who grew the Steelback portfolio to 11 beer lines focused largely on bottled--not kegged--beer for which the Tiverton facility didn't have the appropriate packaging equipment. This explains the uncomely plastic sheaths, or "body sleeves," that encased Steelback's clear plastic bottles, which were shrink-wrapped on trays meant for apple juice cans. Other D'Angelo commercial endeavours included the Cheetah power surge drink, the marketing for which infamously cast D'Angelo himself opposite sprinter Ben Johnson offering the I-can't-believe-he-really-said-that tag line "I Cheetah all the time."
Back in beer land, the go-forward strategy for Steelback is being co-led by president Ian MacDonald, who has a deep history in the beer business, from his beginnings as a beer rep wooing kids on campus to drink a particular brand--"It's a touchy subject nowadays," says MacDonald--to executive stints at Labatt and Lakeport. So, how much beer did he have to sewer when he stepped in? There was, he says, "old core product that had to be dumped." Thousands of litres? He smiles: "Higher than normal."
Here's the plan: Cut back the beer portfolio from 11 to five. (RIP the rather dreadful Copperhead. "It didn't make the cut," says MacDonald.) Aggressively build the keg business by wooing licensed establishments with a price point that undercuts national competitors by as much as $30 a keg. (The Toronto Street restaurant in which we're sitting is the first to get on board.) And sign a packaging deal with an unnamed brewery to get the beer properly bottled and labelled until Steelback can justify an investment in capital expenditures at the existing facility.
The season's marketing push is to focus on small-batch, premium craft beer. "We're calling it 'value premium,'" says MacDonald. "We're offering an award-winning crafted beer at mainstream domestic pricing. I guess you could say we've developed a beer for people with champagne tastes and a beer-bottle pocketbook."
In order to give the five-beer lineup a true craft look, the new labels feature the landmark lighthouse in Kincardine, Ontario, and a sweet-looking cottage with smoke puffing from the chimney. Very crafty--but an incongruous pairing with the steel-toed Steelback logo. Sherman admits that some thought was given to changing the corporate name. But name recognition is all the company has to build on as it positions itself in the crowded craft beer category. Which means that Jon Sherman can't shed the D'Angelo legacy. At least not yet.
He sips on his Steelback Tiverton Dark. Is this a career? Is this a future? He says he likes the idea of commercial real estate very much.
So where does Jon Sherman see himself in five years' time?
"In five years? Jeez. Five years from now is a long time. God, I'll be 30."
You can go your own way
Just because these kids sat at the same kitchen table as some of Canada's business titans doesn't mean they wanted to sit in the same boardroom. Take a look at how far these apples fell from the tree
Dad Toronto developer Rudy Bratty
Occupation Magazine publisher
One of five kids, Bratty launched Toro magazine in 2003. It ceased publication in 2007, but Bratty relaunched Toro as an online entity in May. He remains COO of the Remington Group, where he is the heir apparent.
Dad Barrick Gold founder Peter Munk
Occupation Business writer and contributing editor to Vanity Fair
While writing her 2004 exposé of the AOL Time Warner merger, Nina Munk turned to her battle-scarred dad to be a sounding board. This year, Munk released a book about Dad's first Canadian success story: the Clairtone stereo company.
LAURA M cCAIN-JENSEN
Dad Frozen-food magnate Harrison McCain
Occupation Co-owner of the Creekside Winery near Jordan, Ontario
As a kid, McCain-Jensen worked at McCain as a Xerox girl and even did a stint in "potato research." In 1998, she and her husband bought Creekside for $1 million and now produce 70,000 cases of wine a year.
Dad Billionaire generic-drug king Leslie Dan, founder of Novopharm
Occupation Theatre impresario
While the 44-year-old still runs the $50-million private equity fund Dancap (the money behind Porter Airlines), Dan Jr. recently announced he'd be producing three musicals next season: Happy Days, Anne of Green Gables and How the Grinch Stole Christmas.
Dad Former Petrocan CEO Jim Stanford
Occupation CAW economist
Junior was a peace activist and general rabble-rouser before joining the autoworkers' union. Stanford Sr., who is credited with turning around the lumbering Crown corp., is apparently very supportive of his son's decision to veer left.
Jennifer Wells started writing about business and its characters before the crash of '87.
She can be reached at email@example.com
The amount of beer, per capita, that Canadians drink annually. Contrary to our perceived legendary capabilities, Canadians actually rank 21st in suds consumption, behind the U.S. (1.39 kegs/year), Britain (1.69 kegs/year) and the leader, Czech Republic (2.67 kegs/year).