John Sleeman draws his inspiration from the proud brewers who are mainstays in his office. The chief executive officer of Sleeman Breweries looks up from his office desk and George A. Sleeman, his brewing grandfather, stares back at him from a photograph. He looks back over his shoulder and George Sleeman, his brewing great- grandfather, gazes down at him from another photograph. His great- grandfather ran the Sleeman brewery from the same chair and desk.

The most treasured possession in Sleeman's Guelph office is also a source of great inspiration. It is the brewing recipe book of his great-great-grandfather, John Sleeman, which was the catalyst for the youngest of the Sleeman brewers to revive the proud family heritage in the beer industry 20 years ago.

Sleeman, the adopted son of Warren Sleeman - who was not a brewer - is fiercely proud of the family's heritage in brewing. It goes a long way in explaining his passion for a business that was unceremoniously put out of circulation for 52 years after his grandfather's brothers were hauled off to jail in the 1930s for smuggling beer into the U.S. during the Prohibition period.

Under John Sleeman's direction, Sleeman Breweries has carved out a niche as Canada's leading brewer and distributor of premium beer. No doubt, the men staring down at him from those black-and-white photographs would be proud as punch.

Ken Kerr, Business Edge
CEO John Sleeman tips a glass of the family tradition as he poses in the Sleeman Breweries old brewing room.

1. Who was your mentor as a youngster?

"I really didn't have any mentors. From a very early age, maybe 10 or 11 or 12 years old, I wanted to be my own boss. I wanted to be in business for myself. I've watched with interest as people started and ran their own businesses and became successful, but no particular individual stands out. I was asked by a group of university students whether entrepreneurs were born or whether you could become an entrepreneur. I think my inclination is to say that I believe it's a personality type and generally you're born with whatever type of personality you're going to have. Business-wise, risk-taking and hard work are things that have always appealed to me."

2. How were you influenced by your parents?

"They were very supportive. I decided when I was 16 or 17 that I wanted to drop out of high school and start working for myself. Looking back on it, it's quite amazing that they said that was OK because I certainly wouldn't say that's OK for my children. I dropped out of school (after completing Grade 10) because I found school not particularly interesting and it was - in my mind at the time - impeding me from getting out into the workforce, working for myself, learning and trying to start businesses."

3. Did your father have any interest in the business of brewing beer?

"No. My dad was in the generation of the family that was not in the beer business. It was not something we discussed around the dinner table. The family was in the beer business until 1933 from the 1700s in England. Some of my grandfather's brothers were smuggling beer to the United States and got caught, so the family lost their brewing licence in 1933. My dad started out in the Air Force and then ended up working at Bell Canada for the balance of his work career. I was adopted by my parents. I'm very lucky. I was in a foster home for a year and a half and then the Sleemans adopted me, so I had a pretty good childhood."

4. When and how did you learn about the Sleeman family's history in the beer industry?

"In my early 20s, with my wife and her dad, we built and opened a British pub, and went on to open a beer importing and distribution company (The Imported Beer Company). But while doing that I still didn't know about the family's brewing business until the early 1980s when my aunt (Florian Wall) came to me and brought me my grandfather's (beer) recipe book and an old beer bottle. She said, 'Now that you've been in the beer business for a few years, it's about time you found out about your heritage.' Unfortunately, she has passed away, but she lived long enough to see the brewery constructed and make beer again."

5. If you were involved in the family business in the 1930s during U.S. Prohibition, do you think you might have smuggled Sleeman beer across the border to those parched throats as your relatives had done?

(Laughing) "I don't know. If I was a young man and kind of stupid, I'm sure the lure of easy money would have made me sit up and take notice of the demand. I've always been interested in supply and demand, but there's also something about spending time in jail and losing your business that has a bit of a balancing effect on your decision. It's hard to say. Certainly, these days, the idea of spending time in jail doesn't appeal to me, so we strictly abide by all the laws."

Ken Kerr, Business Edge
John Sleeman and Sleeman Breweries have come a long way since 1985.

6. What was your main inspiration in restarting the brewery?

"My aunt. It wasn't at all about money. It was about family heritage. It was about being lucky enough to wake up one day in the beer business and finding out the family had a heritage in the beer business. As my aunt said, 'This is the kind of thing some people dream about and you've been given an opportunity and you're going to waste it if you don't do something about it.' She didn't give me any money to start the business, but she gave me the impetus."

7. After running into a financial crisis in the startup phase, did you consider giving up on the brewery?

"Oh yeah. There were some pretty tough days when I kind of looked at myself in the mirror and asked, 'What in the world are you doing?' We thought it would take $10 million to build the brewery, and in fact it cost considerably more. There were days and weeks and months where it was hard to make enough money to cover all the bills coming in. In the early days, the brewery was responsible for some personal hardships as far as my first marriage was concerned.

There were all kinds of things that contributed to it (failed marriage), but certainly the strain of the money and the long hours and everything didn't help my first marriage. There were a lot of days when I reconsidered what I had done in restarting the brewery, but I never contemplated walking away for more than about 15 minutes. It was one of those things where I said, 'I'm not going to allow 50 or 60 people to be put out of work who have families and mortgages.' Even our bankers said we weren't going to be successful, but I wasn't going to let people stop me in my desire to recreate a family business with high-quality products that were different from all our other competitors. When someone says you're going to fail, those are the kinds of comments I love, because it gives me the incentive to prove them wrong."

8. How do you think that adversity might have shaped your character?

"Well, they say what doesn't kill you makes you stronger. It's not fun going through that at the time, but when you come out the other side there's certainly a feeling of success and elation.

"And I'm not a quitter and I don't have a lot tolerance for people who give up when things get a little rough. I don't like whiners. Kids in entrepreneurial studies at universities ask me what it's like to be your own boss and be rich and all those things. I guess being rich is a matter of scale and opinion. I don't think of myself as rich. I think of myself as a working guy who still has a job and a brewery to come to every day. I ask these kids if they are willing to give up their social life and work 18 to 20 hours a day and really have no friends. I ask them if they are willing to have it cost them their marriage and whether they're willing to go bankrupt at least once. An awful lot of the kids start out by saying they want to work for themselves, but by the end of the class a lot of them decide that the costs are too high.When I didn't have money or knowledge, I made up for it with drive and gained experience along the way. There aren't a lot of people willing to do that."

9. What do you think is the main ingredient that would explain your success with the brewery besides hops?

"In each one of the three businesses that I've started, I have changed my management style. If one assumes that the latest one - the brewery - is the most successful, then I think the reason for the success is being absolutely focused on my mission and my goal for the company and marrying that up with doing something that entrepreneurs usually don't do. That's giving up most of the day-to-day control to other people who may just be smarter and better at certain things than I am. I've learned that if you really want the business to grow, chances are you're not good at everything necessary to run a $300-million company. Sometimes, it's very hard for entrepreneurs to think anybody else can do things as well as they can. But you'd be surprised at how gratifying it is to see your business grow because you're suddenly not constraining it. I'm absolutely focused on brewing the best-quality beer. I wouldn't want anything to be embarrassing to me or my family because our name is associated with the product. I'm fanatical about quality and growth, but equally I want to surround myself with those people who can help me achieve those goals."

10. Do you plan to continue growing the company through acquisition?

"Absolutely. There are still some interesting brewers (as potential takeover targets) in Canada and then, of course, there's the world. The beer business is a very local business. What we've done is acquire companies and allowed them to stay local as we've done with Okanagan Spring Brewery and Shaftebury (brewery). Overlaid on top of that, we've given them the ability to produce Sleeman and some of our other brands. So perhaps that strategy would work in other countries. Plus, we have international relationships with some of the world's most technically advanced breweries. I think one of the areas of potential future growth is the export business. Premium imported beers are doing exceptionally well in the United States and other parts of the world. And, once people get a chance to see our bottle and taste our liquid, they seem to be pretty pleased with it."

11. What have you learned about the beer tastes of Canadians?

"Historically, Canadians have been able to be satisfied in their taste profile by what we call Molson and Labatt mainstream brands. Molson and Labatt sell about 75 to 80 per cent of the beer sold in this country and ... . there's not a lot of taste difference between, say, Molson Canadian and Labatt Blue. What I've discovered is that there are more and more Canadians who want something different in taste, and that's the premium, heavier, high-priced beers, whether they're imported or domestically produced beers. But there's also a general change in taste where Canadians are wanting beer that's a little easier to drink. The heavy, dark beers that our grandparents drank are not as popular as the middle-of-the-road-type tastes. So we've got consumers kind of going out of the bottom of the mainstream brackets, going to cheap brands that still taste fairly similar to Molson and Labatt mainstream brands. Or, they're going out the top to premium brands, which taste quite a bit different and are heavier but also give them a unique badge that they can walk around the bar and be seen drinking a Heineken or a Sleeman or something like that."

12. Are you surprised the larger breweries haven't done more to change their products?

"Certainly, they're very successful companies and, because they're losing a little bit of market share, one shouldn't assume that they're going to do nothing about it and that they're comfortable with that and won't change. Labatt has a portfolio of premium brands now with Alexander Keith's and Beck's and brands like that. They see the success of the small breweries with unique products and they also see the success of the cheap beer people. They're moving, but larger companies take a little longer to move and I sure wouldn't count them out as tough competitors."

13. Do you think that one day Sleeman could possibly overtake one of Canada's top breweries in production?

"Well, I guess if my grandfather's brothers hadn't gotten caught smuggling, we'd be that large now.

I don't think it's likely that in my lifetime we'll be at a 40 (per cent) share (of the Canadian market). My personal goal for the company is to grow the business in Western Canada, for instance. We're at about 10-per-cent market share in Alberta and B.C., and I'd like to see that go up 50 per cent (to about 15 per cent). In Eastern Canada, where we're at about six or seven per cent, I'd like to double that so I see us at some point being a 15 (per cent) share company across the country. If you average it out, we're probably at about six per cent across the country."

14. Do you think your ancestors would approve of what you've done in resurrecting the family business?

"Oh, I think about it every day as I sit in my great-grandfather's chair and at his desk, which I was fortunate enough to find and have refurbished.

In a family business, you want to be proud of what you do. You don't want to get up to the modern high jinks that you see some of these corporate CEOs doing and then going off to jail. I think every day about whether we're making the right decisions and whether, if my grandfather or great-grandfather were sitting in this chair, they'd make the same decisions. Regrettably, they're not around to give me their advice, but hopefully they would be pleased with what we've done here."

15. What kind of beer did you drink before brewing your own?

"Well, I've always been partial to a pint of Guinness. I think my first beer when I was growing up in Ottawa was a Molson Brador. But I've always liked ales versus lagers, and to this day of all the brands that we produce, my inclination is towards the Cream Ale or perhaps the Porter, although I must admit that the new Original Draught is a very, very nice drink. So I tend to be more of an ale drinker than a lager drinker."

16. So that's not just a commercial (Sleeman appears in the company's television commercials)?

"No, that's not just a commercial. That's something else I feel pretty strongly about - truth in advertising. Every once in a while in meetings with our marketing people I can see them turning grey before my eyes and wincing because I correct them on something. But at the end of the day I don't want someone coming up to me and questioning my integrity."

17. Are you considering converting Sleeman into an income trust?

"We looked at it this year. To be an income trust, you need to have relatively low and stable investments in capital, equipment and so on. Well, our business is growing. Big Rock (an income trust) doesn't have to spend a lot of money every year on more tanks and bigger brew houses and more breweries and stuff.

"As an income trust, you have to be fairly sure that you're going to have lots of profit left over to turn over to your unitholders.We're a growing company that needs capital, so as long as I'm here I want to grow this company. At some point, when it appears we can't grow anymore, then I guess we can look again at becoming an income trust. But it doesn't suit the Sleeman company at the moment, and I think over the next 12 to 15 months we will show the investment community that we're on track for meeting our financial targets and we'll see the stock price rebound again. It's now a couple of bucks off its high of $15 and I think it'll get back there and continue to grow. At that point, the shareholders will be just as happy with that as they would be if we were an income trust."

18. How would you feel if Sleeman were taken over by one of the big breweries, say Molson Coors or Labatt?

"Yeah, I've thought about it. I mean, the company's not for sale. It's not in play. I don't have absolute control over the company by voting shares. We don't have two classes of stock. And my personal holdings coupled with management and board directors and things probably amounts to 20 or 25 per cent. So we couldn't block a hostile takeover. I think I would probably find it a little difficult to work for a large company because I've always worked for myself. But if somebody comes along with an offer, you know, I'm the chairman of a public company and I have to bring it to the board and do my best to create shareholder value. You know, the beer business is a dynamic business. It changes every day. There's consolidation going on around the world. Who knows what tomorrow holds? You've got to keep an open mind about it."

19. Is there a chance that one of your sons or daughters may continue the family heritage and grow up to be brewers?

"My two daughters are married and both have their own careers outside of the beer business. My two young sons are certainly keenly aware of and interested in Sleeman Breweries but, at the moment, they haven't told me if they'd like to be in the beer business or not. They're a little young for that. It'd be nice but they can't just get into this office because they happen to have the last name. That can be terribly demoralizing to everybody else who has skills. They aren't named John or George. We thought that would make their lives pretty miserable."

20. Besides the beer business, what else do you want to achieve in your life?

"I've done a fair amount of travel and I don't want to stop that. I enjoy driving around in racing cars, but I don't have enough time to do that. Eventually, I wouldn't mind getting my pilot's licence. I need, as my wife and family and several other people tell me, more balance in my life. Working 80 hours a week doesn't leave a lot of time for family. I've got to learn to balance trying to run a company with being a private person. It's very difficult, especially when you've made a decision 15 years ago to plaster your name all over billboards, do radio and TV commercials and have your bottle of beer in people's fridges. Then, you have no right to complain about invasion of privacy. So I don't, although I must admit that at times it's very hard on my family. I don't often think of what I do as a job. I guess I could get a CEO, but I'm 52 years old and I'd like to keep doing this job for a few more years before I give up the CEO role and stay on as chairman. That may be in the next five years or so."

John Sleeman

* Title: CEO/chairman, Sleeman Breweries.

* Born/raised/age: Toronto/Ottawa/52.

* Family: Married, four children.

* Education: Grade 10.

* Brewing heritage: Grandfather George A. Sleeman, great-grandfather George Sleeman and great-great-grandfather John Sleeman were all brewers.

* Beer career: Sleeman built and ran British Pub in Oakville, Ont., with partners from 1977-79. From 1979-92, he was a partner in The Imported Beer Company. He restarted the family brewing business in 1985 and has been chairman and CEO of Sleeman Breweries since 1996.

* Moonlighting: Sleeman is a member of the Young Presidents Organization and past chairman of the Brewers Association of Canada.

* Toys: Sleeman owns two racing cars - a Maserati Quattroporte and a Ferrari 355 Spyder.

* Passions: Reading historical biographies, cottage life.

Sleeman Breweries Ltd.

* Brass: John Sleeman, CEO/ chairman; Rick Knudson, president and chief operating officer; Dan Rogozynski, vice-president, finances and development; Murray Mateyk, chief financial officer.

* Profile: Sleeman is Canada's largest craft brewer and distributor of premium beer and the country's third- largest brewer.

* Key Brands: Sleeman, Okanagan Springs, Shaftebury, Upper Canada, Unibroue, Stroh's.

* History: The Sleeman family began brewing beer in Guelph in 1834. The family business was restarted in 1985 after a 52-year drought.

* Recent Stock Price (TSX:ALE): $12.90 (52-week range, $11.50-$15.65).

* Website: www.sleeman.com

* Head Office: 551 Clair Rd. West, Guelph, N1L 1E9.

* Phone/Fax: 519-822-1834/ 822-0430.

(Gyle Konotopetz can be reached at gyle@businessedge.ca)