Steam Whistle Part #2 : The Brewery Takes Flight

Perspective is a remarkable thing. Looking back to the launch of Steam Whistle in 2000 it seems like a no brainer. The craft beer market in Ontario was about to explode, beer sales of the big guns Molson & Labatt were essentially flat. All Steam Whistle needed to do was start making beer and the money would flow like a cask full of great pilsner….. right? Ahhhh no, not really. Making great beer was the goal, getting there was anything but rainbows and skittles.

Talk to Greg Taylor, one of the founding partners of Steam Whistle, and he’ll tell you that after his experience at Upper Canada Brewing, (previous post) he knew he wanted back into the beer business. He knew the challenges of a market controlled by the Beer Store and the big brewery competition. Yes, there was a risk but, “not as much as you might think” he says. He knew the appetite for craft beer was growing and, he says, “maybe the bigger risk was in NOT doing it.” There were a few craft breweries around. Brick  and Wellington were producing good quality beer, Creemore and Cameron’s had launched a couple of years before. But the industry had not reached critical mass. It was still only 2 – 3  percent of total beer sales in the province. What Greg saw was an opportunity to launch a brewery, and to use Steam Whistle as a catalyst to grow the industry as a whole.

By now the founding story of Steam Whistle is part of the beer firmament in Ontario. Three guys, all dumped from Upper Canada Brewing after the Sleeman takeover, get together on one of their famous canoe trips in northern Ontario. Shortly after, they form the “3 Fired Guys” company, write a brilliant business & marketing plan and pull together a few million dollars from some investors. Eighteen months later they are brewing beer in their gorgeous new Roundhouse brewery in Toronto, in the shadow of the CN Tower. Well, you know it wasn’t quite that simple. Greg had to mortgage his house as part of the financing. Cam Heaps, one of the other partners, had his dad invest in the brewery (his dad was Frank Heaps the founder of Upper Canada Brewery where they all worked and met).

In the 17 years that followed, thanks in no small part to Steam Whistle’s advocacy for the industry, craft breweries now flourish in Ontario. There are more than 100 in the province and a new one seems to pop up every week or two. Greg believes it’s critical to pass on what he’s learned as the industry has grown over the past 2 decades. First, he says, beer makers, especially the newbies in the industry should always show some humility. “A lot of work has gone into building the industry” Greg says. “You need to show some respect for that and for the people who drink your beer”.

Almost as important is his  belief that craft breweries need to work together, even if they’re in competition with each other. That’s part of the reason Steam Whistle holds the Roundhouse Craft Beer Festival twice a year – right in front of the brewery. “People say to me, how can you invite your competitors onto your front lawn twice a year?” says Greg. For him the answer is simple, they may be competitors, but they’re all in this together. The success of the craft beer industry is not guaranteed. It has to be nurtured and it has to be celebrated.

Right now there certainly is cause for celebration. Craft breweries hold a 25 per cent share of the Ontario market. Craft beer is now available in the Beer Store, in the LCBO, and in some grocery stories. Those grocery stories guarantee a minimum of 20 per cent of shelf space goes to craft beer. But in many of them, Ontario craft beer gets over 50 per cent of the space. All of this is a far cry from that 2-3 percent market share just 20 years ago.

I guess if you had to sum up Greg’s approach to the business it would be in one of the last things he said to me during our conversation. “Love is cash. If your customers love you, it’s cash, if the people who work for you really want to come to work every day, you’ll make a better product”. Customers do love the product. Steam Whistle is now the largest independent craft brewery in Canada. Staff seem to love working there too, and beyond salary they are rewarded for their loyalty. After 5 years with Steam Whistle they get an all expenses paid trip to Munich, Prague and finally to Pilsen in the Czech Republic – ancestral home of pilsner beer. This level of commitment to employees is probably why Steam Whistle is consistently ranked as one of Canada’s best managed companies.

Steam Whistle was not an overnight success, it’s survival was not a “sure thing”.  But here it is 17 years later, and Greg Taylor’s business and the industry he helped launch has never been healthier.

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