The food and beverage industry continues to evolve at a rapid pace with new advances in technology, workplace trends and consumer preferences. With change happening so quickly, it is important to stay informed on what your peers are doing in order to learn from their mistakes or successes. Maintaining a robust network of peer relationships within the industry provides a chance to learn from others, as well as a chance to share effective advice with others on how to succeed.
During a recent panel discussion, select executives of family-owned food and beverage companies that recently faced ownership transitions shared their succession paths and views on the current opportunities for middle-market companies. The panelists included:
In an excerpt from Challenges of growing and transitioning a private food and beverage company, the panelists share advice they received to help them succeed, as well as the advice they would share with fellow peers in the food and beverage industry.
Tom Walzer: One of my personal advisors often tells me to “relax, trust the process and enjoy the journey.” I sometimes worry too much about the outcome or the destination and that is not what being an entrepreneur is about. The fun and the reward is in writing each chapter of your book. My other bit of advice is to surround yourself with people you can trust because the journey is much more fun and rewarding when you can share it.
Jonathan Del Re: In regards to buying an established business in an industry in which my experience was limited, I received this advice from several people: Do not change anything right away. If a company is not broken, then sit back, carefully observe and make changes slowly. Incremental change aimed at continuous improvement has been our philosophy from the start. We announced this approach to a stunned group of Lacas employees on day one of the transaction, and by following through on this approach over time, I believe we gained trust from our employees.
Our industry is constantly changing. So, our company must always evolve along many dimensions. When you do change things, do not take on too many projects at once because organizations with our depth cannot handle multiple complex projects simultaneously. When we have done this, we have ended up with everything half-done and it created a lot of stress.
Advice I would offer regarding employees is to treat everyone with respect, no matter what their role within the company. Foster a culture of honesty and ongoing feedback. Be patient and open, but cut the cord as soon as you don’t believe the job is a fit for someone. Early on in my tenure at Lacas, I was much slower than I should have been with tolerating underperforming individuals and at times I took a few months too long in dismissing people whom I knew needed to go. There are widespread organizational effects to such delays.
Dimitri Pappas: It is very easy for family businesses to become complacent. I know a family business owner who says it is good for a family business to lose money every six or seven years – it forces you to take the steps you need to take to make the business better. I don’t know if I would go that far, but it is easy for family businesses to be stuck in their ways and it is important to make sure you take steps to continuously improve.
Another thing I cannot stress enough is the importance of growth. So many things become easier if you have a growing business as opposed to fighting other companies for market share in a mature category. Good businesses are very thoughtful about how they pursue growth and have a well-thought out strategy, grounded in reality, for increasing sales. Businesses in a growing category are so much easier to manage than businesses in a declining category, even in ways that aren’t necessarily intuitive, like employee morale. Growth strategy has to be a constant focus.
Finally, you want to think about your company culture. It is important to build a culture that is going to attract employees and contribute to your success. Family businesses can, and should, make working for a family company central to their culture and find employees who value the stability that comes with a family business. At the same time, you want people who are going to push to make the business successful. Figuring out that balance is critical for a successful privately held company.
For more information on this topic, or to learn how Baker Tilly Capital specialists can help, contact our team.
Baker Tilly Capital, LLC disclosure
Baker Tilly Capital, LLC social media disclaimer