Latest / Family Business Stories with Fexingo: Succession, Legacy, and Multi-Generational Companies / How the Molson Family Brewed a Five-Generation Legacy
Transcript
- Lucas: So, Luna, you know how we've covered some pretty old family businesses on this show, but I think we've got one today that really takes the cake for sheer staying power. Luna: Oh? Who are we talking about? Lucas: The Molson family. You know, the Canadian beer folks. They've been brewing since 1786. That's before Canada even existed as a country. John Molson started his brewery in Montreal when he was just twenty, and the family has kept control for over two centuries. Luna: That's remarkable. I think most of us know the name from Molson Canadian, but I didn't realize the family was still so deeply involved. Lucas: Right. And that's what I want to dig into today. Because the Molsons have faced everything you can imagine: world wars, prohibition, corporate raiders, even a nasty family feud that went public just last decade. Yet they've managed to keep the company in family hands and stay relevant in a consolidating global beer market. Luna: How have they pulled that off? I mean, most family businesses don't make it past the third generation. Lucas: Well, a big part of it is their willingness to adapt. So, let's start at the beginning. John Molson was an English immigrant who bought a small brewery on the St. Lawrence River. He was also an early investor in steamships and railways, which gave him capital to reinvest. But the brewery remained the core. Luna: So diversification, but not at the expense of the main business. Lucas: Exactly. By the 1860s, the company was the largest brewery in Canada. And the family kept expanding, absorbing competitors like the Dow Brewery in the 1960s. But the real test came in the late twentieth century, when global players like Anheuser-Busch and InBev started consolidating. Luna: That's when they merged with Coors, right? Lucas: Yes, in 2005. Molson merged with Adolph Coors Company to form Molson Coors. It was a merger of equals, and the family kept significant voting control. That move gave them scale to compete globally while preserving their influence. Luna: But I recall there was some drama within the family around that time. What happened? Lucas: Well, in 2008, two cousins — Andrew and Paul Molson — launched a very public proxy fight against the company's board, including their own cousin Eric, who was the chairman. They were unhappy with the financial performance and the direction of the company. It got pretty messy, with lawsuits and public letters. Luna: Sounds like a classic family feud. How did they resolve it? Lucas: Eventually, the dissidents settled and the board added two new independent directors. But the episode revealed cracks in the family's unity. Yet, remarkably, the family still owns around 17 percent of the company's equity and controls about 99 percent of the voting power through a multi-vote share structure. Luna: Wow, that's a powerful governance tool. But it also means the family really can't be challenged from outside. Lucas: That's right. And that's been crucial to their longevity. But they've also been smart about bringing in professional managers. The current CEO, Gavin Hattersley, isn't a Molson. He's been in charge since 2019. The family is willing to step back from day-to-day operations, but they keep their hands on the strategic wheel. Luna: So it's a balance between control and letting go. Lucas: Exactly. And they've also had to adapt to changing consumer tastes. Beer consumption in North America has been flat or declining for years, especially as craft beer and spirits have gained ground. Molson Coors has had to diversify into hard seltzers and non-alcoholic beers to stay relevant. Luna: That's the same challenge we've seen with other legacy beverage brands. Lucas: For sure. But the Molsons have also invested in their brand heritage. They lean into the Canadian identity, with slogans like 'I Am Canadian.' That resonates with consumers. And they've been involved in hockey and other national institutions, which keeps the brand top of mind. Luna: I think that's something a lot of family businesses can learn from: leveraging their history without being stuck in it. Lucas: Absolutely. And speaking of history, the family has also set up a family council and a family constitution, which are essentially a set of rules for how family members can be involved in the business. It helps prevent the kind of infighting we saw in 2008. Luna: But that didn't stop the feud entirely, did it? Lucas: No, it didn't. And that's a good reminder that even with governance structures, emotions run high in family businesses. But the fact that they got through it and continued to thrive is a testament to their resilience. Luna: So what's the current state of the family's involvement? Lucas: Well, there are about sixty-five family members who are shareholders, but only a handful are actively involved in management. The rest are passive investors. The sixth generation is now coming of age, and they're starting to think about how to keep the family engaged and how to train the next leaders. Luna: It's interesting how they've managed to maintain a sense of family identity even as the business has become a global corporation. Lucas: It really is. And I think one of the keys is their commitment to philanthropy and community. The Molson Foundation supports arts and health initiatives across Canada. That gives family members a sense of purpose beyond just the bottom line. Luna: That's a good example of how a family business can have a positive social impact. Lucas: Right. And it also helps with the family's reputation, which in turn benefits the business. People trust a brand that has been part of the community for over two centuries. Luna: You know, Lucas, this conversation about legacy and staying power makes me think about the value of supporting independent media that tells these stories. Lucas: That's a fair point, Luna. We do put a lot of work into researching these family histories, and we're able to do that because of listeners who appreciate what we do. If this episode has been worth a coffee to you, you can head over to buy me a coffee dot com slash fexingo and help keep the show going. Luna: Yeah, even a small contribution goes a long way, and it means a lot to us. Lucas: Alright, back to the Molsons. So, looking ahead, the big question is whether the sixth generation will be as committed as their ancestors. And that's a challenge for all family businesses: how do you keep the entrepreneurial drive alive when you're born into wealth? Luna: It's a good question. Some families end up with members who are more interested in the dividends than in the business itself. Lucas: Exactly. The Molsons have tried to address that by encouraging family members to work outside the company before they can join the board. They have to prove themselves elsewhere first. That's a common practice in many successful family businesses, and it seems to have worked for them. Luna: And they also have a policy that limits how much stock family members can sell, right? Lucas: Yes, they have a share liquidity agreement that prevents family members from selling their shares on the open market. Instead, they can sell back to the company or to other family members. That ensures that the ownership stays within the family, which is a key part of their long-term strategy. Luna: So they've essentially created a private market for their shares. That's a smart way to keep things in-house. Lucas: It is. And it's a lesson that could apply to any family business that wants to remain independent. You have to be intentional about your ownership structure. Luna: What about the beer market itself? Is there still room for a family-controlled company like Molson Coors to compete with the giants? Lucas: Well, it's tough. The global beer market is dominated by a few mega-brewers. But Molson Coors has carved out a solid position, especially in North America and Europe. They've also been innovating with brands like Vizzy hard seltzer and Coors Seltzer. And they're pushing into non-alcoholic options, which is a growing segment. Luna: So they're not just relying on the legacy brands. Lucas: No, they're not. And that's a good sign for their future. The family seems to understand that to stay relevant, you have to evolve. But they also know that their history is an asset. It's a unique selling point in a market where consumers are increasingly drawn to authentic stories. Luna: I think that's a key takeaway for any business, family-owned or not: your history can be a competitive advantage if you use it well. Lucas: Exactly, Luna. The Molson story shows that with the right mix of adaptation, governance, and a bit of stubbornness, a family business can survive and thrive for centuries. It's not easy, but it's possible. Luna: And it's a story worth raising a glass to, don't you think? Lucas: I'll drink to that. Here's to the Molsons, and to all the family businesses out there trying to keep their legacy alive.