Beer in his blood

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There are nine kinds of beer on tap at the Canyon Creek Chophouse in downtown Toronto. None of them are products of Brick Brewing Co. Ltd.

But never mind that. George Croft, chief executive officer of the Waterloo, Ont.-based brewer, is sticking with Diet Coke. By the time our two-hour lunch is over, he will have downed three.

Make no mistake: Mr. Croft is passionate about his craft, but he seldom partakes during the day. "I think there is that sort of notion that, you know, folks in the booze business are busy drinking at lunchtime and they go back to work half-gunned," he says. "Those days are so far gone."

Heading into the crucial summer season, beer executives like Mr. Croft need to remain clear-headed. Several factors have sparked concerns that price hikes may be in the offing this year, something unlikely to go unnoticed by a nation of beer lovers. Stubbornly high energy prices are hitting brewers' distribution and freight costs. Households are feeling pain at the pump, so indulgences like beer are falling in priority. And cold and wet weather from February to the end of April caused the industry's overall beer sales volume to sink by 7.6 per cent during that period, compared with the same period last year. When the weather is bad, people are less likely to drink beer.

So far, Brick has done more than stay afloat. Sales of its beer brands rose by 12.4 per cent during its fiscal first quarter, which ended on May 1. The company is benefiting from a budding renaissance of craft beers - those that are made with an emphasis on local roots and distinctive taste rather than mass appeal - and its Waterloo Dark, Red Baron and Laker brands are selling well.

Still, Mr. Croft remains mindful of those larger industry trends.

"We aggressively manage our costs. Certainly the last resort for us is to ever take a price increase," he says.

Mr. Croft joined Ontario's first craft brewery in May of 2008, in the midst of a dark chapter in Brick's history. The company was in violation of loan conditions set by its lenders, inefficiencies were rampant throughout its operations and its core business was in decline. "You kind of had that triple threat, where all the indicators were pointing in the wrong direction," Mr. Croft says of those early days.

But now, after directing a shakeup of its senior management team, steering the settlement of a number of high-profile lawsuits - including one involving founder Jim Brickman, whom the company alleged had misused expense accounts - and hammering out the company's new strategic plan, Mr. Croft has no intention of looking back.

Instead of trying to save on costs by closing facilities, Brick is focusing on boosting revenue by filling up its excess capacity, which totals an extra 2½ million cases. The company has begun selling select beer brands in new markets including British Columbia, Atlantic Canada and Ohio. And as always, the scrappy company is waging a constant "David and Goliath" war with Molson Coors and Labatt.

Mr. Croft also knows what it's like to be on the Goliath side. During his university years, he worked for Labatt as a summer rep, organizing special events including slow-pitch baseball tournaments and rodeos. During the school year, he served as a campus rep for the company, boosting Labatt's profile among faculties and fraternities. Before he even finished his degree, he was steeped in the corporate world of brewing. After graduation, he joined Labatt full time and worked in a variety of roles from 1984 until he left the company in 2005.

But now with Brick, he faces different challenges in boosting the brand. Perhaps the most ambitious element of Brick's new growth strategy revolves around coolers. Specifically, getting men to drink them.

Brick's most transformative move was acquiring the Canadian rights to the Seagram Coolers brand from Corby Distilleries Ltd. in a transaction worth $7.3-million earlier this year. Now that it owns those rights, making coolers "cool" for males will require a product makeover. Among the changes, the company is considering introducing two new can formats for coolers, including six-packs and single-serve cans. Those would complement the existing four-pack bottles that are more popular with women.

"I think male consumers have been brought up a little bit in beer space and so a four-pack doesn't feel like a male-friendly pack size - quite small," Mr. Croft says.

Seagram, though, has struggled with boosting the man appeal of coolers for years. In the 1980s, for instance, actor Bruce Willis starred in a series of cheeky commercials, including one where he croons about drinking Seagram Golden Wine Coolers with his boys. They proved effective at the time, but sustaining long-term popularity of coolers among male drinkers has been elusive.

Because Seagram products are sold in every province but Quebec, Brick now has a foot in the door when it tries to pitch provincial liquor boards on carrying its beer brands. "It is a great platform for growing our total business," Mr. Croft says.

Brick is also grappling with another key challenge - this one involving the Beer Store. The retailer, which sells the majority of the beer in Ontario, is jointly owned by Labatt Brewing Co. Ltd., Molson Coors Canada and Sleeman Breweries Ltd. - three of Brick's largest foreign-controlled competitors. Those brewers' parent companies are Belgium's InBev SA, U.S.-based Molson Coors Brewing Co. and Japan's Sapporo Breweries Ltd, respectively.

Brick, like other small brewers, was riled by the Beer Store's decision to make changes to its payment terms in May, 2010. Those changes mean that brewers now receive payments from the retailer four weeks after a shipment, instead of one. As a result of that change, Brick was forced to obtain a $2-million increase to its operating line of credit and a $2.2-million increase in its long-term debt.

You might think the continuing disputes between small brewers and the country's biggest beer retailer would make Mr. Croft an advocate of alcohol sale reform in Ontario. Actually, he's cool to the idea of expanding beer sales to new outlets such as corner stores, as is allowed in Quebec. That's because he says both the Beer Store and the Liquor Control Board of Ontario run "very efficient" systems that allow brewers to predict and control their distribution costs to some extent.

A private system, such as the one that exists in Alberta, would inflate the cost structure for craft brewers since they would have to distribute to numerous retailers. That, in turn, would inevitably drive up beer prices for consumers, he says.

And higher prices certainly wouldn't help it sell men on trying its coolers. Perhaps stealing a page from Seagram's eighties ad campaign is in order?

"No, no, we won't be bringing back Bruce Willis," Mr. Croft says with a laugh.

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Curriculum vitae: George Croft, Brick Brewing Co. chief executive officer

Early years

Born Feb. 10, 1961, in Mannville, Alta., a village east of Edmonton known mostly for wheat and cattle farming

Spent first three years of his life on grandfather's farm, but primarily grew up in Edmonton

Bachelor of physical education, University of Alberta (1984)

Family

Married with three children (two sons and one daughter)

Family home is in Campbellville, Ont., about 50 kilometres northwest of downtown

Toronto

Career

Held a variety of positions since joining Labatt Breweries of Canada on full-time basis between 1984 and 2005

President of the Oland Specialty Beer Company, a division of Labatt, from 2001 to 2003

Labatt's Ontario president from 2003 to 2005

Lakeport Brewing LP president and chief operating officer from 2005 to 2007

Brick Brewing Co. Ltd. president and chief executive officer from May, 2008, to present

Hobbies

Golf, exercising with weights and running.

Ran the 2005 Scotiabank Waterfront Marathon (Early Bird race) in four hours and three minutes. "I didn't set the world on fire but I made it to the finish line."