In this issue
At a recent European family office conference, a member of the audience asked me what would be the best investment for a family of wealth. I responded that if she meant a truly long-term investment with a 50- to 100-year horizon, I would rely on the advice of a wise old American friend of mine. The best investment, he said, would be farm real estate in a common-law jurisdiction with a good recording system, such as the U.S., Canada or Australia.
About 210 attendees, representing 60 families, came to the Coronado Island Marriott Resort & Spa in San Diego for Transitions West 2013, the seventh conference presented by Family Business Magazine and Stetson University’s Family Enterprise Center. The theme of the conference, which took place November 13-15, was “Family Business Dynamics and the Dynamic Family Business.”
Shareholders in family companies frequently come into conflict as the company grows, the shareholder mix changes, generations succeed each other, outside investors appear and non-family professional managers are hired. The biggest divergence of interest develops between shareholders who actively participate in the management of the company (“insiders”) and those who do not (“outsiders”).
Not every family names their company after their dog. But the Cohn family, founders of Sage Financial Group, are closer than most families. The golden retriever they dearly loved became their firm’s namesake. Established in 1989 by David Cohn and his sons Alan and Stephen, Sage has gone through several stages, each one a building block for the next.
One of those stages brought Sage considerable national attention.
Schuette Markets, which employs about 140 people at five locations in rural southern Illinois, celebrated its 150th anniversary in October. The fifth generation coming on line at the company is all female. President Michael Schuette, 64, says his daughters bring a new perspective. They have expanded marketing efforts to include social media.
German immigrant Peter Schuette founded the company in 1863 amid the turmoil of the Civil War. It began as a trading post bartering locally sourced goods; by 1870, it had evolved into a general store.
At our Transitions West 2013 conference, held in San Diego in November, panelist Anne Eiting Klamar—fourth-generation CEO of Midmark Corporation—wisely observed, “If you’ve seen one family business, you’ve seen one family business.”
Klamar’s point was that few generalizations can be made about family companies. Each family has its own unique values, history, cast of characters and family dynamics. All those variables influence family interactions and the way each family operates as an ownership group.
Cornfields Inc., headquartered in a 220,000-square-foot facility in Waukegan, Ill., makes an array of snacks that includes chocolate-covered popcorn, drizzled kettle corn and veggie chips.
The menu of offerings parallels the diverse ways the Cretors family has deployed its intellectual capital instead of all working together in a single company.
Five generations after Charles Cretors invented the popcorn machine in 1885, Cretors family members have started a variety of businesses—all with some connection to popcorn.
If ever there were an industry that lends itself to family ownership, it’s the wine business. At least that is the thinking of the Mariani family, owners of Banfi Vintners, importers and producers of wines from around the world.
“Wine is not a short-term business,” says Banfi co-CEO Cristina Mariani-May. “It requires patience, which is something family ownership brings. Also, a lot of our wholesalers and leading producers around the world are family-run, too, and families working with other families carries a lot of weight.”