More so than any other individual, John Labatt Jr. put the Labatt brewery on its modern footing. After his father’s death in 1866, he grew the London-based brewery to be one of the biggest in Ontario and its beers were internationally recognized for their superior qualities.

In terms of his approach to business, John Labatt was his father’s son. He was pragmatic, principled and forward-looking. He was paternal to his employees and honest, almost to a fault. But above all, like his father, he was proud of the beer that was being produced at the London-based brewery.

Growing up in a house situated on the brewery grounds, John Labatt was constantly surrounded by beer, brewers and beer drinking. While he received a formal education, he never talked about doing anything other than entering the family business. Thus, at the age of nineteen, John Labatt took up full-time employment at his father’s brewery. Two years later, in 1859, he journeyed to the U.S. to work as an apprentice brewer. When he returned in 1864, he was made the brewmaster and manager of his father’s firm.

As manager and brewmaster of the newly-named “Labatt and Company,” John Labatt made all the important strategic decisions. Like his father, he was willing to take reasonable risks in order to grow his business. In 1867, he introduced India Pale Ale (IPA) to the marketplace. It was an immediate success. Labatt sensed that beer tastes were moving away from heavy porters and stouts to lighter pale and amber ales. By century’s end, pale and amber ales constituted almost half of the Canadian beer market. At Labatt, IPA accounted for the bulk of production for more than three quarters of a century, from the 1870s to the end of World War II.

Between 1861 and 1870, production at Labatt’s brewery almost doubled from 3,000 barrels to 6,000 barrels of beer a year, substantially higher than at most other breweries in the province. With the profits flowing in, John Labatt decided to change the firm’s ownership structure. On August 15, 1872, after six years of partnership, and almost twenty-five years to the day since John Kinder Labatt entered the business of brewing, John Labatt bought out his mother’s interest in the brewery. The two partners agreed that the brewery had significantly appreciated in value since 1866 and was now worth $87,280. Eliza Labatt lent John Jr. the money necessary to purchase her half share in the brewery, in the form of two mortgages at eight percent interest per annum.

Disaster struck in 1874 when a fire burnt down the brewery. But John Labatt was quick to rebuild. When the reconstruction was completed, the new brewery was substantially larger than the old. The brewery had a capacity of 30,000 barrels a year, with storage space for 85,000 bushels of malt. In the months that followed, sales steadily increased due to his business strategy of manufacturing new, superior products and expanding his market.

In 1876, Labatt decided to take on the competition at the 1876 World’s Fair in Philadelphia. Companies from around the world were attracted to the exhibition by the prospect of winning prizes and drawing attention to their products. In a world that had not yet witnessed the advent of electronic media, expositions like this offered manufacturers a medium through which to situate their products in the hearts and minds of the public. Brewers came from all over the world – Great Britain, Sweden, Portugal, Australia, India, the Netherlands, and many other places. Canadian and American brewers therefore faced stiff competition. But when the judging was done, Labatt had bested them all. While his XXX stout beer was pronounced by the international judging panel to be “first–rate,” his IPA was awarded a gold medal.

After the competition, Labatt seized upon the advertising opportunity that the victory gave him. In a series of advertisements that appeared in the press, he trumpeted his success in Philadelphia. At the same time, Labatt began including images of the medals in his ads.

Over the next three decades the brewery flourished despite price wars and government restrictions on the sale of intoxicating beverages. In 1911, the Labatt brewery sold almost $500,000 worth of beer. In a move to ensure continuity of ownership, in April 1911 John Labatt incorporated the firm, the last of the big Ontario brewers to do so. The new public corporation did away with private ownership and the separation of ownership from management. This was the hallmark of what the Harvard business historian Alfred Chandler has termed “managerial capitalism.”