The Ode: Steelback Brewery

Ugly plastic bottles. A marketing budget that sometimes
exceeded revenues. An oddly indifferent slogan. Eight years
actually wasn’t a bad run.

0

Born to flamboyant entrepreneur Frank D’Angelo in 2002, Steelback Brewery was a mistake from start to finish. When D’Angelo Brands, Frank’s sizable juice and sport drink company, bought a juice plant in Tiverton, Ont., it contained a small brewery. D’Angelo planned to make apple juice, and tried to offload the brewing equipment. But he failed, and eventually decided that shipping apples to the community made little sense. “So we said – you know what? We’re going to try and make beer.”

Steelback unveiled its first three brews on Super Bowl weekend in February 2004, selling exclusively in Tiverton. “We want to be Bruce County’s favourite son,” D’Angelo told a local paper. “We are not interested in playing in the big leagues right now.” They shipped in screw-capped plastic bottles. D’Angelo reasoned the unorthodox packaging distinguished them from competitors and was safer for employees. In fact, it was more costly, and damaged the product both physically (it reduced shelf life) and in the eyes of consumers (who associated plastic bottles with poor quality).

D’Angelo’s local focus was quickly overtaken by his trademark exuberance. Within two years, he was selling 10 brands well outside Bruce County and planning to expand nationally. And while craft brewers typically maintain tight marketing budgets, he went wild – sometimes spending more on marketing alone than all revenues combined. He hired retired hockey players such as Phil Esposito and Dennis Hull to star in TV commercials. He sponsored a Formula 1 racing team. He even attempted to purchase his own football and hockey teams. “We’re yelling like crazy in advertising and billboards to let everybody know that we’re here,” he explained.

But for all the yelling, Steelback never earned a favourable image among beer drinkers. Even one of the company’s slogans, “It is what it is,” seemed to suggest a strange indifference to the product. Critics maligned Steelback beers for inconsistent quality, and retailers returned large quantities.

The mystery of how Steelback survived for so long baffled many. Late in 2007, it was resolved, when D’Angelo abruptly announced he’d sold his stake in D’Angelo Brands and Steelback to Barry Sherman, owner of generic drugmaker Apotex. Sherman installed his son Jonathon, a recent university graduate, in the executive suite; D’Angelo was to remain Steelback’s chairman and public face.

It later emerged that one of Sherman’s companies, Wasanda Enterprises, had bankrolled D’Angelo’s companies for years, and was now owed more than $100 million. Wasanda tipped D’Angelo’s companies into court-supervised bankruptcy protection, and the Shermans gained control of Steelback in 2008 after paying $8 million. At this point, D’Angelo departed entirely.

The Shermans quickly distanced themselves from their former partner, blaming him publicly for overspending on advertising and admitting to past inconsistencies in beer quality. Under new president Ian MacDonald, Steelback eliminated more than half its offerings, sold off the plastic bottling equipment and contracted a third party to package its remaining five beers in conventional brown bottles. It also divested a recently acquired brewery in Rougemount, Que., which had never produced a drop of Steelback brew.

Steelback fared little better under new ownership. MacDonald left the company last July. Shortly after, Sherman laid off most of its employees, paring back to a skeleton crew. Operations wound up completely in January. Thus ended one of the strangest episodes in the history of Canada’s alcohol business – not, it must be said, an industry lacking in colourful characters.

Leave a comment

Your email address will not be published. Required fields are marked *