The Entrepreneur Podcast
The Entrepreneur Podcast

Episode · 1 year ago

16. How does 150-years in business prepare you for modern day disruption?

ABOUT THIS EPISODE

Entrepreneurship is a journey, not a destination, and few have been on that journey as long as the Oland and Stanfield families.

In this episode, Eric Morse speaks to QuantumShift alums Andrew Oland, CEO of Moosehead Breweries, and Jon Stanfield, CEO of Stanfield’s Ltd, on how the long history of their business impact how they view, and handle the current disruptive landscape.

Listen to the fascinating histories of two pre-Canadian institutions, and how they continue to balance history, innovation, business, and family.

You're listening to the ibion toFrenertia podcast from the PRLMOR set institute, Fronto Menership at the AvyBusiness Gool, my name is Eric Mors and I ill be your host for this episode. I I'm really happy to be trying thistoday we are. I I've started a series of hodcasts and we're going to givethis one a shot thought it was a great opportunity to have two of Canada'soldest businesses oldest family private, run businesses with us today, and weheard from Charles Hundred Year business almost and today thisafternoon we're going to hear about a couple more that are even older, I'mgoingto. Let them tell their stories, I'm not going to steal that, but I'mreally happy that both Andrew and John agreed to be with us today to to talkabout their business and my idea behind it was when you are able to get to anage of business that long you've been through a lot: okay, whether it was agreat depression, World War, two World War, one I mean your companies survivethat and those were times of huge uncertainty and I'm sure, there'sprobably half a dozen or or other episodes. So I was really kind ofinterested in the in the idea of family, Lore and and some of those thingsaround. How do we deal with these situations? So I'm putting a lot ofpressure on Hem, but that was one of the things that I that would beinteresting to explore and how they've dealt with uncertainty over the ear. Sowhat I'd like is I'm going to have Andrew Start and just to tell the storyof his family business? And you know what are some of the stories youremember about how the familyes dealt with uncertainty in the past and maybe,if there were decisions made during those times that changed the course ofthe business. That would be interesting for us to t understand as well, soanter. Thank you very much Eric it's pleasure for me to h to be here thisafternoon and I just thought I'd start with a disclaimer. Sometimes when youget O on these panels, you portray that sort of everything is perfect in yourbusiness and everything's PR perfect in your life, and I want to be very clear.That is not the case with my business or with my life, but I'm I'm lookingfor offering some some insights, so Moushadbreris multigenerational familybusiness started about a kilometer from here from right, where we're sittingjust across from halfack shipyard on the darkness side of Halifax Harbor bymy great great great grandmother, a woman named Susanna Olwins move fromEnglands to Halifax in eighteen. Sixty five, a family of very limited meansher husband, John, was a bit of a man about town but didn't do much abouttown and she was. She was a home brewer as many women woreth the time she wasable to ssecure some capital and h. They started in eighteen sixty seven and what Ithought is a it. Take you through four stories, sortof between eighteen, sixty seven and in about nineteen. Seventy eight ECAUSE, Ithink in any multigenerational family business, there's one or two big events,ore, big decisions that define that that generation and as I've been goingthrough. This is reflecting on this advance of of the remark this afternoon.What occurred to me was they often occurred when the nextgeneration was relatively young in their tenure. So it was the next generation coming inand saying yeah this, maybe your company today, but it's mine tomorrow,and this is what we need to do today to pivot or to adjust to go forward soSusanna, relatively successful business fromeighteen, sixty seven on to when she died in eighteen. Eighty five, inaddition to starting the business and running it for almost twenty years, shedid something very unusual for the time she left the business to her youngestson when she died, and that was in...

...eighteen. Eighty five and I think itturned out to be a pretty good decision, because her son George ran the businessuntil nineteen thirty three and that included by far the mosttraumatic event in the history of what is now musaid brewries and the old onefamily. That would be the healfox explosion. So I think most people inthis room would know about the halthax explosion. At that time, the burler was,in the north end of Halifax, where it was completely destroyed. Member of thefamily died and that's where you hade the split between all called theHalifaxol Ans and the Saint John Ollans, so George Olland was still very much incharge. He and some of his sons stayed in Halifax and rebelts here in Halifax.My greatgrandfather another George George Bil Wen, to confuse things movedto Saint John N in nineteen eighteen purchased, a brewer there and continuedthe family business and the idea in nineteen seventeen nineeen eighteenthat a business, aebrewery and saint an Halifax would compete with a bewer inSaint Johnue. Brunswok could be like us going to the moon tomorrow. It just wasnot in anyones C, no one could ive verseen that in n Tousanine, hteen andthirty seven, my grandfather, Phyllipoland had graduated from UNB hadgone off to Europe to Copenhagen to Brewing School, and this was his firstexpor exposure to Logger Beers, so prior n Thoand, nineteen, thirty sevenas a brewery and most Berizin Canada. All we brewed were ales stronger darker in two thousand andnineteen terminology: less drinkable, less sessionable than lawters, and mygrandfather came back created a logger which is which we're still selling today Alpinelogger. It's actually a number one stllseller to this day in the provinceof New Brunswick and his insight was just this is, and I'm trying not tospeak beer sort of commercial t terminology to you all. But his insightwas just refreshment and the consumer and I don't think too many people werethinking about the consumer and our family in our business. I N nine teen,Thirty, seven or the previous sixty odd years. It was Breu the beer or get itto the market, and that was it, but he had the first insight in terms of whatdoes the consumer want and where whereis the consumer going and then thefour story revolves around my father again, a young man, early nineteensixties, so father was born n Hsanine Hutden, an thirty nine, so wes sort oftwenty three twenty four and a federal cabinet minister. I was in Saint Johnfor a speech and behind the podium is a banner and the bannersays: Exporter Die and my father tells this story. This Day he had neverthought of exporting. Now it was. It was abusiness that was in a soldeer an at that time. NOVASCOTIA NE buns. We am Piunder rules of the time you had to actually have a physical brewery inanother province just to sell beer there, and he would have familydiscussions with his father about the merits of exporting, but eventually didexport starting in n Nineteen D, Seventy eight to the United States, andso we were selling in California long before we were selling an Ontario whichis sort of classic Canada again. So you know, if you think about my grandfatherand the consumer and my father thinking about where is growth going to to comefrom so I'll pass it over? John Thanks...

Yander, I'm happy to be here: I'm goingto share a little bit of story about underwear, it's an exciting topic Um. So our would be my great greatgrandfather emigrated from England to Prince Edrode island in eighteen. Fiftysix and built a factory there that basically made warn blankets and such along the way he eventually sold thebusiness to his two sons, frank and John and frank and John moved thebusiness to Novascotia. They first went to Saint Kroy, which is down in thevalley, and then they settled in Turo in the eighteen seventies and built afactory where we manufacture oupro today. So we moved into that factor ineighteen. Eighty two and that's where her head office is that's where thefactory is that's where we make today, roughly you know, seventy percent ofour products we're not lily white, any more. We do import and when I think ofthe generations, probably where Stanfield's first got its name was inthe eighteen nineties, which is you know, amazing, when you think of it, itwas diring a clandic Goldrush. Obviously these people who wereparticipating that were running for money. They were probably taking theirlives in their own peril and we were able to provide a one piece combinationmade of coarse wool that would not only help them survive the climb survive,the weather, the rain and everything else that went along with that, butwhen they found the gold stanfields was senonymous with. You know thatparticular product that went up the mountain with them and a great story ofthat today. We still have the same shirt that they used when they went onthe clondic cold rush other than it's, not a hundred percent boll any more.It's like eighty twenty, so it's not at's kind of itchy and scratchy, butthat is something that is very symbolic in her company and especially in theWestern market, is still a very popular item, which is amazing. They call itthe island Tuxedo now so tho. That was probably where stamfields got its name,frank and John we're also political in nature. The stanfield family also haseither it's Underwearr. It's politics so would be. My great grandfather wasan MP for our area for lots of years. John Stanfield went to World War Oneand he came back and he became a senator. So his brother Frank, you knoweventually took him out and, and then we get on to the third generation andthat generation created. You know they had patnable one piece: What we call ineCanada combinations, what they call the United States as union suits. So we hadthe patent for that which was basically taking a shirt and a bottom andconnecting them to one piece and of course, pattens last for x amount ofyears today wee probably workh money, but back then it was part of what wethink around our place as being innovative in under our products. Soback, then that was quite an innovation to be able to put one piece underweartogether. The other thing that would have been in my grandfather'sgenerationss. This is the third generation was the shrink proof likethat was on the outside of the building used to stay stanfields unshrinkableunderwar rigt. They there is a process that in the time, was environmentally Ok todo it's not today, so we had to take unshrinkable off thebuilding and paint a big black, uh paintover, but h. You know that isinnovation as well, so that is separating difference in your productsin the market, h versus what others are doing, because at the end of the day itis underwear there are other people make underwer and there's choices. Mygrandfather who I never met, he died in n nineteen. Sixty seven of her attackand my father took over the business at the age of twenty two years old. He wasjust a recent graduate of...

...tax school of business. I know it's notivy, but TUK was pretty good in the day, and I remember the story that he toldme about his prost and his proswes say Li Jestom. Why are you going back toTrono te Scotio to run your little family business like you should begoing to Wall Street? You should be doing this and that- and he said well,this is sometimes family duty, family calls and unfortunate a year after hegot home his father passed away. He he was thrust into running the business and being handedto keys by his mother, one of the biggest impacts oer that my father hadon. My caree would have been my grandmother. So my my grandfather's. USTANFIELD'S WIFE! She lived next to me growing up. I spent a lot of time withher when I was born. I was born when RobertStanfield was in Helfax at his speech and everybody in the Familywasthereexcept Er. My mother was in the hospital given birth to me, so I'm notsure if the t e, the next underwear annointment was was was occurring butcertainly and Charles lives in trarl. So he knows lot about the family storyin our area, so my grandmother was a heavy influence on really myparticipation in passion towards the business. I really didn't get that frommy father when he was young because he was very busy. He was at work sixteenhours a day putting in all of that time, wheres today, like I don't have to dothat 'cause we have people that can actually help, but you know it. It cameon later in life, my passion for the business there was, you know a coupleof things that in my time, so I would consider my time I started in thebusiness when I was thirteen years old. I just completed my thirty fifth yearof being in the business so and I'm still young at under fifty, but one ofthe things that I remember the most I would have been in college and and myfather and the VPS sales at t a time similar to maybe what Andrews story wasaround. You know. Canada only had so many people on so many restrictions interms of where you could go with your business and we felt well we'll just besmart, we'll get own to the. U S, we'll just take our products and replicateourselves down there, we'll hier sales force and do this and that well, thesample order was abouth the biggest order we got and it was it was as wetalked about there. Maybe maybe you know a flawed strategy, but really wasprobably when you look back on. It was testing because of our presence at theshows. We recognized that we might have not ave been able just to take ourbrands there and be successful, but what we did have expertise in hismanufacturing finance capital, branding, understanding how the markets werewhich led to the next year, the show a little bit more eyes. Open Buwho mightbe available for us to acquire. So we can build a platform. We can startwiththat. So in Nineteen, ninety three, which would have been my last yearuniversity- that's what we did. We went down and acquired a company whichstarted the geographic expansion for our business today, nineteen ninetyseven, we acquired another American company in the snow, Sports, SpecialtyBusiness and and today the revenues are about Split, actually O, probably havemore: U S, revenues than Canadian revenues. So if we didn't, if we hadn'tof deployed that type of strategy back in the early nineties, we probablywould be in trouble today because of what's going on in the retail market inCann. I'm sure we'll get to some of the disruptive things that have happened tous, and these are the things like free trade agreement came in. NAFDA came in.We went from nine hundred employees to six hundred employees. We reengineeredthe firm again in nineteen. Ninety three and went to five hundredemployees were roughly a little bit over three hundred today that are stilla sewing product in trll, so that to me- and that was maybe at the front part ofMine Ander like and Referr to a lot of the stuff est o the front, and it wasprobably in the middle of my father's, but it was a real turning point for ourbusiness when we point it south and today you know these types of thingsreally...

...get you thinking about. What is next,what is next for the company, in terms of where are we going to grow? Welltalk about a bit of what happened to us in our Canadian market and how businessevaporate ut essentially, but to that is a little bit of the history line ofwhere we came from thanks n. So again, I'm going to ask both the followingquestion is: What's what's the biggest issue you're facing today or issuesyou're facing today, and maybe you know given what we've been talking abouttoday? What are some of the greatest uncertainties that that you're thinkingabout Andrew will start with you again so I've been I've been president nowfor eleven years, and I had to grin when you were doing the drug plan. Iknow about more about drugs than anyone h. We have H, maybe not Charles but H.let's just say we had some very generous drug plan offerings,particularly for our retirees that I had to deal with very early on in mytenure as as a new president and I'll be dealing withthose for the next forty years from a CAS perspective. So the reason I saythat is when I became president. The decisions that I had to make were veryeasy. Executing them was difficult, so we got to get out of the retire healthcare. Business got to get at ofe defined benefit pension business we'vegot a modern eyes. The facility we've got to evolve the culture from aculture of entitlement to culture of business, acumen safety thinks of those,so we' make good progress on those. So now it's like okay, where do we want togo today? Got Options? Didn't really have options just have to get this done,and it's all about growth, and where do we find growth in a category that isnot growing, and that is under pressure from big small governments, alternativeproducts such as Canabis, all those those type of things and so you'redealing with all of these sort of uncertainties in your day to daybusiness or how you go to go to market while you're still looking to to try totry to uncover those opportunities for growth. So an can. Can you tell me maybe alittle bit? I just follow up with that when you think of the differentopportunities in in front of you, what are those things you're taking in mindin terms of making that decision o you have you have framework of some sort,family, history or you know something that you've picked up along the line.That's helping you frame those issues where I mean. Ultimately, it comes downto the consumer and where, where the consumer is going and what the consumeris is is looking for, but you also have to put that through the Lens of thecustomer. So, and you know- and people often get consumer and customer mixedup and they use the terms ow, the consumers, the end user, the customeris the buyer, it's the bartender, it's the Barowner, it's CENSLC, it's Lcbo orthings of that nature, and as we are, we have to be realistic as as a smallerplayer in the category in terms of what are we going to be able to achieve froma customer perspective and actually be able to get it in front of our Cconsumers. thangs ener, John, so I'll go withthree ID, probably have a list of twelve but Doggo. Three main issuesthat have affected our business. I'm similar to Andrew I've been probablyrunning her business for about twelve years as as the lead, I've always beenat the table so to speak, learning and understanding how the company madedecisions and where not only t e the directors of the company thought weshould go. But you know the family and management thought we should go o lotsof conversations in around that, but I...

...think my generation, even more so thanmy father's, my father- would say you know we had the oil en bargo. We had.You know big time inflation. In my time we had kind of price controls that werein there. We had free trade and after that came in there he had to battle allthose, but I think the the consolidation of the retail channelin the bankruptcies that occurred within our business, not only in Canadabut in North America, posed our biggest challenge and continue to posechallenges on our business as we have to remain very fluid through theprocess and it's far from over. I don't want to wake up with that. Cybersecurity call like that scarce crap out of me, but I sat at my desk one day andthe first one to go was sports authority in the? U S, and that was ourlargest customer in her California Business and they were twenty fivepercent of our business and I said wow. I've never thought that I would have to deal with that becauseyou just humeg along you're, huming long, everything's kind, O good, thentwenty five percent of your business as gone the next day not only gone, but inthe U s they sue for the receivable a year back, so you lost all thereceivable that you collected to and not perialling up to that. So it was. It was roughly five million dollars atwet out the door, which was you know, an amazing amount of money and H. NorthCarolina Company, the largest custom in the snow support side, went bankrupt aswell within six months and when I was dealing with that, I was thinking aboutwhat's next and I could just think of sears Canada and started to prepare forthe demise of sears Canada inside of my own mind, even though they were a thirdlergist customer, I was always at the table soing. We must replace thiscustomer. We must start now. We must move on they're going to be gone on, OJohn they're. Okay, that's going to be all right and well it wasn't. They wentbankrupt. So in that span of eighteen months, we lost of sniff nown revenuefor company, of which we also had to recover. We had to manage to, or sothat was a significant challenge for us and Um. A little bit of a lessonlearned for me on that was we always were a lean company interms of management and style, but I think, keeping lean, keeping verynimble. Keeping Very. I don't, like the word, use, agile, loosely 'cause, it'sa big word use in business, but being to be able to have a little bit ofagility inside of Your Business's key, and from that I, the reason whyconsolidation occurred in bankruptcy happens because consumer preferenceswere changing rapidly and they're still changing, whereas it's the onset of ofonline and ECOMMERCE businesses, the digital and social, how they changeconsumer preferences. And now it's all. Basically, in your hand, which, whenyou think about how you're running your life you're running tout of your handand the challenges that that poses for what I would consider ourselves as amanufacture to bricks and mortar to the new world versus there's. Lots ofunderwher companies are just onlie direct, that's how they star ut theirbusiness, but we have to come from a different angle, so that reallychallenges our position in the market, so consumer preferences and they'reevolving rapidly and impacting everybody they just shrink marginseventually. Because of that- and the third thing I would say- and it'sreally result of to- is the people inside the businesslike- I I Lov Erpeople- we have a great culture, O Eur People, but they don't fit anymore withwhere we need to go, and some of these managers is not their fault. They'vebeen with their business for twenty twenty five years and they've served usreally well, and it's not about having you know, as they say that you knowit's the wrong ass and the wrong sea type of thing. But it's not it's notthat just the world has gone by them and that is really challenging for notonly our company but for probably every employers to how do you deal with thethirty year employee that very costy to...

...get rid of you move them sideways? Whatcan you get out of them? But that is one of the things that I'm reallychallenged with today. What I'm really struggling with internally is how to do the skill set realignment inside ofor Business and a couple of guys who hear my wite peal for me an and Charlesfor disclosure in my form group. So you know they hear a lot about my kind ofrants and rambles from time to time, so they they have a little bit of personalknowledge of that is John. So the world is changing when you think about growthand where it might come from next. What what are you thinking about? So the thegood thing that we've done is: We've replaced all of that business over thetwo year period that we lost with those three bankruptcies and largelyorsreplaced through similar channel, maybe close proximity channels, but Ithink our growth in Canadais very challenged because of it's just not a big place. I mean it'sa big place in geography, but is thirty six million people we're already coastto coast? I think we can expand a little bit, maybe in channels we can bea little bit better in industrial safety and those types of things, but Ithink our growth is probably going to come more from geographic expansion inthe future versus kind of domestic expansion. Thanks TA, so you know onemore question and then we'll open it up to to the group here but h. You knowthese are long standing companies, so you know use your crystal ball. Wheredo you see the business ten years from now? So in Canada there are forberies who have a Coasto coastoperation sell across Af people in Um in all all provinces, of course, Labat Molson, sleman and Lusaid Musa's, the only one, that's Canadian Os, so Labat Wilson andsliminsbarnth Ik. If Um. So we need to do a better jobtelling that story in a meaningful way that resinates with our that resonateswith our consumers. So from a branding point of view, we want to be in Teners,we'd like to be candicebury and we're we're not there today. I would say thatone of the challenges for Canadian companies is. Everyone knows what their firstinternational or export market is going to be. It's easy T, so the UnitedStates. What's the second one? Is it Mexico? South America is CEDA? Isit China, like you, know, pick a spot right? We don't have as a country anatural number to market, so we're going to have to figure thatout for Muset in terms of where that's going to be. It won't start with bricksand mortar, but it wouldn't surprise at some point if it's evolved to to Briksand Ortar, just because of the nature of particularly shipping beer, an thecost associated with that that being said in Canada, you know we have a nice business inOntario we conjund to have a nice business in the mirror times lots ofgrosth potentials. We would still see in western Canada. I know the folks andAlberta say that it's tough times there, but when you grow up in Atlanta Canadaand you go to Albert, it looks pretty good and in classic Canadian fashion,we've only been shipping beer from New Brunswick to the province of Quebec fortwo years now so t sok us a hundred and fifty years to do that, Um and h. So we would still see us andthere's eight or nine million people live in Quebec. So still we still seeopportunities in Canada, both from a volume but also from a margin playperspective, but we do need to find that either that one or that group of ofinternational export opportunities-...

...thankeer John, so in ten years, I' like to still be on earth, would bethe first thing I would like to be, because my kids are both young and thisbusiness is very challenging. It comes with a lot of heartache and a lot ofheavy thoughts about producing products in Canada. We have taken enormousamount of pride in saying we're made in Canada and Um some of our marketing people, internaland External Isay. We gotto put the flag, opt the POL and Alwa say that,and I said we can't say that a hundred percent, so we have to be a Canadiancompany. First, that's how we have to explain our story and or talked about astory like we have. We have a fabulous story and if people knew more about ourstory, I think they would resonate towards us as a company and us as abrand, whether that brand is produced in Canada or produced in Vietnam orproduced in the Cribian base and wherever that might be produced. So probably our company is going to look alot differently in where and how we make products in ten years. All of ourcompetitors are global. We do not have a a local competitor other than maybesaxs apparel. Now, who has sacks underwerout there in Vancouver? Theyhave done a really good job as a new entrinto the market. It's also allowedus to expand INO different price point, so I welcomed that rigt like they takea little bit of piece of the Pie, but it also extends our brand from into adifferent price point that gives us opportunity for the future as much asanything. So I'm thankful for that, but our our maincompeters are fidloom HainsCalvin, clind jockey. I mean these guys are big companies compared to to OsCitin Inturonoa Scotias so and saying that, as as retail consolidates youknow, pricing pressures come that forces you generally to go offshore toget production Andand to hire people an Troo to come in and be soers th. Thisgeneration just doesn't want to do it like the previous generation, and maybethey want to come in and run the Ballyn line for beer, maybe a little bitsimpler, like we don't have a problem: riting our text teelevisions, who arebigger machines or ninny machines or dying machines. These types of things,but to find people on the street to come in and sewl a product is verychallenging. The other growth is going to come from her. U S, businesses,management and my my father would have thought of He. He thought of it as aconsolidated business, but how I'm structuring, where I'm going with mysenior leadership team is. Is these three businesses are the same and weare working together and the people that I put in place in those are goingto help not only the company where they are situated, but they're going toprovide insight and input to all three companies and help guide us to thefuture, because the challenge that we face is a lot of the decision makingmost in one person, and I don't want to be that one person ten years out and even today, so Ithink you need at least four or five people at your table who can help guide?You like, I might be at a C Eo. I am the majority shareholder. I am thechairman. I am a state holder, I am a director, I have all kinds ofresponsibilities and these people in the manrage e Tum arereally strong. Help Guide you for your next ten years and you have to reallyfind strong people to help guides you. You can hire external people. You canhave sessions like this, with your management Tean that you come in andhelp you get focussed and so on and so forth, but it always well come down tothose who you surround yourself with to be to be successful. Great thanks, Dohn.So at this point open it up to to any questions in the group. So let me just repeat the question realquick. The question was asked: Uh h. How did you guys feel when you tookthe range of the company? What was the relationship like with the family, andyou know kind of how to did you deal with that? As you went forward I'll start, so we had quite a longsuccession plan. In two thousand, I...

...became executive Ice President of thecompany. That was really the onset of the succession plan to the presencerole. I was Appointe od the board at that time. So on our boarder directors,we have eindependent directors, we have family directors, so those familydirectors were able to get exposed to me, my thinking, my participation, becauseI was probably Um, I had a couple of older cousins and I have youngercousins, of course, and my siblings never were interested in the business.So they really didn't know me, so they had to really understand how he thoughtyou know was John just like the kid riding around his bike. That was in hisgrandmother's yard. As that, that's how they probably thought of me at firstand they were probably skeptical like Johns Toms son Tom Sont, a great joblike John's, not going to be able to do aswell a his father, so ther, probably a lot of skepticism Wen, I cam, so I hadto earn the and I really earned their respect through participation at theboard level and outside of that trying to spend some time with them. The biggest thing when I kindo tookover the whole thing was um through all this bankruptcy stuff andbasically they really understood the chops that you have kind of thing to beable to like just put the macinations in place to survive that not onlycapitalized with your banking partners, your internal people, like Maga Apper,my job's, going to go well. No, it's not we're. Goingto fix this going totake time, but we're going to do it right and they were more worried abouttheir investment. Like Oh, we got ta sell. We got to move off from thisbusiness and I'm saying like no, we need to generate value. You know weneed to there's going to be time to recover so and through that whole process theygained. You know a lot of respect, for me is a leader. A lot of understandingof you know, work ethic and I'm not just you know, tha. You Know Tom's sonfrom Churel, I'm a you know an individual who can lead a company, butI was probably greeted with a little bit of skepticism when I first startedD Youknow, the evolution of the process. So on the oldest of F four boys, mybrother Patrick, is r CFO and he has an ineresting career. He was on thecommercial side of the business brand management and at early thirties.Society want to go back and become a ca at the time and went through the wholeauditing thing and h and so h went for ther. My brother Matthew,who's currently running our cannabus business was started in sales in sortof multinational CPG and then went over to marketing. Thbrother Giles is a itentrepreneur here in Halifox and my father was able to execute a byout of H, my uncle and aunts in the mid twothousand, so my father had a hundred percent of shares. So in nineteen,ninety seven father hired gentleman named Bruce mccubban to be the firstnon old ane to be president mused proce around the company for about eightyears and then two a thousand and five bruce was starting eas into retirement.SOOUR VP of sales, Americanat atomae e named Stephen Porie, became presidentand true story. I'm sitting in my office December early early December,two thousand and seven, and I get a call from my father's assistant whosJanet who's. Now my assistant, your father, wants to see you very unusual.I go down it's father and Bruce. My immediate thought is: What did I dowrong here and they said Steves resigned and we'd like you to becomepresident, and all I could think of is don't see anything stupid. They mightchange your rmind. How do you GE? How do you get out of this office as quickas you can we sort of shatted for like and andthen they said, and we're not going to...

...tell anyone til sort of Januaryfifteenth or something like this? This is like December tenth. So it's like afive minute meeting and I leave and sort of go back to what I was doing gethome. That night, my wife says h any interesting happing today at work well, and I I think from the rest ofthe family perspective. I was the one they would have seen as as becoming thenext president, but this was this was premature. This was earlier than thanwe had expected and in higdsight I if, if they had made the decision, becauseI was, I was very early forties if they'd made he decision to bringsomeone in for a period of Ti. That would that would have been a greatexperience for me and I would have been fine for that and just one other thing I'll say is soI'm heavily involved in in Tech, Canada, H, most of would know it in in my groupand part of the tech experiences the tect chair. You have a monthly coachingmeeting and I would say from the second meeting that I had with with Mike Maller the tech Shar s as hewas saying: Andrew You're, the head of his family you're on the company or the head ofthe family and Um W. I have that a family I'm forty four years old and nyou're, the head of the family and, ultimately, when you are in thatleadership position in the family business, you are the head of thefamily. There are lots of little decisions that if they go the wrong way, conddisrupt the dynamics of the family and it's not necessarily equal, but it hasto be fair and that's that's a rule. That's that I've had to grow into. I would say-and it's just to me- it's it's it's part of being a family businessthanksgus, any other questions. So the question is: will robotics helpreplace the need for Labor on the sewing factory floor here in Canada? Yeah? I think in time. Arbotics canhelp support appair of manufacturies thro, North America that are left the technology, isn't quite there interms of you, would Sayn with your own fingertips, a dexterity of robots tomove things efficiently down a production line on the so side is notquite there yet they're, still multiple steps in Sewin, a tshirt or apair of boxer briefs that you know Thau rotics can't quite do yet, but I dothink that someone is going to resolve that issue. You know that might be inthe ten year window, where we we could repatriate some of that prod productionback to Canada if it happens to move offshore because of robotics have alevel of labor force and then have a level robotics and investment andtechnology, and that should be ableto support production Heras, a big question there, somicrebrewr is very prevalent in the in the markets today and Andrew. Do youhave a a plan for that? And what do you think the future hold great questions, so I'm gonna take itfrom a couple of angles. So, first of all micro craft, small, whatever you wantto call Upreris, have been fabulous for the beer industry. If you look at theexcitement and the interest of beer today versus twenty or twenty fiveyears ago, it wouldn't have been acceptable to t in some cases to have abeer in your hand at at a high end cocktail party, or somethinglike that. Twenty five years, no, no, you have to have a scotch right so now,there's' lots much more offerings available for the consumer, and you know the tremendous styles that areavailable for beer and it's done just a lovely, lovely thing, and that is tak alot more money out of each of your pockets, because it's premiumized thecategory and you know it used to be all...

...on price. And now people don't thinkanything of going in in Novascotiean spending four, fifty or five dollars.For you know four. Seventy three milk, sixteen ounce can- and it's created,different conpetition, because you have consolivation with the big guys so theanheyser Bush, so the bud by H, lights of the world and th, and then thehinekens and all those thees massive consoldation there. One of thechallenges in Canada, the the small brewer's face, is in most provinces,they're subsidized and if they go above a certainthreshold or volume threshold, they lose that subsidy. So you have a abusiness. That's pick a number: it's got an Ebito four hundred thousanddollars Nice Business and then we buy them and now thebedas hundred and fiftythousand dollars or less or they merge and they lose the scale they lose. Thatmark up advantage of of both of those. And so that is h. You know that'ssomething that they're grappling with is they're trying to figure out theirexit strategies. You've seen a few instances where both in the Canada andthe U s where the big guys have come in and they've absorbed that hit andthey've done it for one reason and that's the brand. So they want thebrands because they think they can grow the brand and because they think theythey need to keep that. Take up that shelf space. They'd rather have theshelf face from one of you know theirs n than somewhere else. So for us, whenwe look at at those opportunities and the reason that we w we did onetransaction, but it was really more for a distribution reasons than than for branding. You know how do weovercome this small brewer's tax advantage? And you know if you've gotthe business with the four hundred thousand dollar eve. You expect to bepaid off the four hundred thousand dollar Utnot to one hundred and fiftythousand dollar ybut Al that you're going to have that we're going to haveso that that creates an issue and then ultimately becomes how strong is thatPrand, because most of the brands are geographically constrained, so Oky,I'm craft beer and pick a spot stuweacnova Scotia, no m not going todo I'm Gont OI'm craftbeer in Chicago ll, that's great! But when I go toCleveland, I'm just the same as craft beer from everyone else. Why wouldn't IDRINK THE CLEVELAND CRAFT? Beer bows would be one of the ones that's beenable to, I would say: Do a good job, as has steamwhistle they've they've gonethey've gone beyond that, but most are very geographically limited. I'm not going to reprase that one justgo ahead. I I yeah, I think, to a certain degree everyday those types ofh, things that can impact your communitycreep into your thought process about, for instance, if if we all shore more,what's the impact of that to or people you need a you need, a level of scale inside your manufacturing operation tosupport the overhead and these types of things you know people I think, driveby our factory every day and say you know there is stamp. ULS is stillthere. You know, John and Tom are still in the building. He things must begoing swimmingly. Well, a Andra alluded to earlier. It's you know. Sometimesit's not as it appears from the outside on the inside of the battleground. Soto speak. You know when I was younger. I felt an enormous responsibility in mycommunity and that was bestowed on me, a very young age through my father andwould be my grandmother again about having to get back to the communitysupporting the community. I did a lot of that when I was in my mid twentiesto bout the age of forty before I I had my first child, where I backedoff some of the community stuff. So I...

...got a a wreck center bilt to Inturo. Ustanfields was a big Doghnor to that and I was the energy behind gettingthirty million dollars for that place through government and local. My fatherwas instrumental in m getting the new hospital built, Antro and instrumental and raisingmoney for the old hospital throughout the years. So there's there's always aface. There's a serious responsibility that you take on when your C of afamily business in the Maror Times that has a significant size for thatcommunity. Now turol has changed. There's a lot of good size companies inTruo. So there's a little bit of diversification. That's happened,there's other people that can rise up and take on and bear some of thatresponsibility. But there's no question deep down inside in your soul and yourheart, some of these Um, you know community impacts. You know reallyimpact your decision when you're 'cause you're making the decision alone.Really it's your decision, so you can sit in a chair somenight. You can bestaring at a wall saying when I make this call it's going to affect thosetwenty two people over there and but at the end of the day, he're in business. You have to do theright things for your business to move it forward a and hopefully m. You knowthe decisions that you do make that are hurt for it to people in your communitycan get dispersed in a short peor of time throughout the Community Yeah I've had to sort of I've had tomake a you know a number of tough decisions in terms of layoffs,restructurings and all type of stuff, as I'm sure everyone else in t e in theroom atd had to, and with my make up it's it's it's veryeasy for not easy, but but I quickly get to you know, what's best for thelong term of this business and generational- and you know it's better-to have a business with X, minus fifteen percent employees in acommunity, then O Xso. I I don't. I don't struggle with that long history, obviously in the family,in terms of of investing in volunteering community, I'm currentlychair of the economic development, a entity for Saint Johnnie Brunswick soand that's giving back. But it's also it'svery much. If Saint John's, not a competitive city or community forattracting human capital, then we're just not going to be successful. Longterm. You know capital. Human capital was just so mobile and there's so manyopportunities for folks to to go, and so that's that's really really part ofhow got into that. I will just ttell you a little but, as I'm sure, everonehere, Yo're sort of inundated with these requests for corporate donationsand all that type of thing, and so we didn't exercise about five years ago,where we did an extensive study and we actually picked te corporate charityand we wanted something that would go across Canada, but would have anability to make a significant impact in Saint John, you know some charities,the national offices in Toronto- and you know yeah sure temp. So the moneygoes local, but most of it's going to the national office or whatever they do.So. We wanted that. We wanted something where our employees could actuallyvolunteer as as part of it and then something connecting with families. So,and so we ended up picking habitat for humanity, yeah Keith, I it doesn't cause me any sleeplessnights, Um, there's, not a logical succession planand place. Currently, my kids are nine and seven. I did get a little heartstring, the other night driving in the truck jacks, and I were driving tohockey and Um. He said Dad, I'm thinking about cominginto the family business. He said, I don't know what that lookslike yet, but I'm thinking about it and and then he said,...

...you can't sell the factory and you know so. You sit there in thefront seat, driving the car and you're going like. Oh Man, if there's anythingthat could ever get you in a statement. Be That so you know the the battle the the battle lines havebeen drawn. So the strategy needs to be mapped out forthe next generation. But who knows where that will be, but from a from afundamental perspective, it is the desire of the family to maintain thebusiness in the family, whether that is a six generation leader in the future. Hopefully we wild L, we wuld like tohave that as a family, always as as a head of the business, be a standfieldor or a you know, a generation of a standfield. It may happen to be that weneed a transition. We might need an external cel president, no differentthan Andrew refer to earlier that allows us to transition, allows us tomentor that next generation, but on the Raidar. Today, it's not fully onthe Raider. If something were to probably happen to me, it would have tobe an external se. You'l have to come a place unless my father chose to comeback in the business, which I would highly doubte that he would, but hewould probably step back into a chairman, typearole summered apome. SoI used to be able to just say we have a rule in the family business. You haveto work outside the family business. Before you work in the business and ofanswer. I now have three adult children. My eldest is an architect, and so younever know but unlikely. My other one is a CPA with earnston young and theother is the CPA. Whe Hey took the course th the exams in in September, so wit hopeutble CP as orwill be soon, and so it's becoming more of a topic. It's becoming more of atopic in my mind. I have had conversations with both of my youngerchildren, so the accountants about Ou know I'm not going anywhere orhopefully I'm not. My brother Patrick, is not going anywhere and if anythingsort of happened, if I get hit by the proverbial bus, he would be the next.He would go in there right away, and so you no take some time. Do some reallycool things. You have just this incredible opportunity to work all overthe world and really get exposed to things and stuff like that, and then itgoes back to what I talked about earlier right in terms of the role sortof leadership of the family, because Yeah I've got three kids, but mybrother, Patrick, has three kids and my brother Math, who has four kids and mymrother o Jils's kids, are only like one and two or something. But sothere's it's not just my kids, it's and you get into really complicated. Youknow well whose kids can come and work in the business and went role and ultimately we have set up thesuccession planning where I'm going to go on a little high horse here, but Idon't believe cousins should have her own family business. I think siblingscan own us, but I think when you get into cousins, I think they move frombeing owners to shareholders and there's a completely different thing,and if they're going to be shareholders, somehow figure out how to give themsome money and then they can be shareholders, a Td Bank or Royal Bankand get the dividends from there and go to shareholders meeting once a year. NDcomplain to those fooks right, and so we are because that that's that's what happens right, th they'relike well, I need the give at end of you know, pick a number every year tosupport the lifestyle and if it doesn't come in well, I got this lifestyle o.The support right and business doesn't work like that, and you know one of thethings you know about uncertain time. You just you don't know. I mean John.Had the situation with, you know the account in California and then a couplemore I've had a similar situation where you know it was always there that wecould lose this piece of business. But I think someone was talking about ithere. It's like, but you know what we...

...really don't want to talk about that'cause. You know, that's just we're having a good day. Why would we spendthe next five hours ockbut and then it happens and you go? You gotto deal withit, so that was a bit of a rent, but anyhow we're trying to get to the pointwe e're going to get to the point where we will, just it will go fromgeneration, five to generation, six, just one family, it's your job to look after the family.Well, not the family, business, the family wealth! Well, not the familybusiness. You know talking about money, an afamily business, it varies from family to family and it's like talking aboutsex in a family like some families talk about it openly and some it neverhappens and you just appeared right and each family is different. I would saythat I'm perhaps more inclined to talk about those aspects would the rest ofthe family than maybe previous generations were, I'm not sure ifthat's a, if that's just a an advancement in time or if it's mymakeup versus the interests of of various previous generations in termsof talking about it. But ultimately it's it's just it's about communication and I think about setting expectationsand really you know, they're sort of two elements of this. One is dealingwith with children. You know whether they're eight years old or whetherthey're fifty eight years old and what? What the what's the scenario therewhat's going to look like and then the other element is, is dealing withspouses and that is that can be challengingbecause you know everyone has expectations. Everyone has a struggle,sometimes between a want and and EAD, and that's, whereas a as a as a family.There has to be some leadership and again it goes back to ter, but notnecessarily equal and the littlest things can just be blown out ofproportion and can be cause a lot of anx. On the other hand,I would say that a family business that does have some wealth gives you anamazing opportunity as a family, and so one of the things that we've copiedfrom another family, my parents are both in their early eighties. Is We nowdo every couple of years a family trip together? So I don't know it's alltwenty three or twenty four of us, it's paid for by the business and you know,Sierre gets their thousand percent or whatever, but they're they're awesome,and so and that's a good way to have communication. I would say the same thing:Communication is, is very key inside of family wealth and inside a familybusiness, and I agree with Youn like the prior generation. Just didn't do it.They didn't structure themselves to do it, they weren't as open to do it. Itprobably took me, I think, until the late two thousands to get my father tothe table with my mother to talk to the sisters aboat, how it was structure'cause, they never knew how it were structured and back in the you know,before the succession plan kind of started. I I would have two sistersthat would have zero interest in the business, no interest in maybe doinganything with it. I don't know, but what I said to my father at the timewas: If I don't have controlling interest in our family shareholdings, Idon't want to go through the succession process, because I know where it'sgoing to land it the other day. So at least I had a hundred percent of myvote, our family side, what I'm at the board table de with potentialshareholder decisions, and we had shareholder decisions in the end whenwe were going through the big disruption process and um through that process. Communicationwith the cousins was ky all on the family, wealth versus family business.As C Eo. I focus very much on the...

...family, business and and building thebusiness and moving it forward, because, at the end of the day, that's going togenerate value and wealth for the family and what I always think of- andI've said this to my cousins inside of our family meetings, whether rightwrong or an different. But I said: listen if it's good for John, it'sgoing to be good for you, because I'm in the driver's seat and I'm not tryingto drive this business into the crowd, I'm trying to make it work. So I candrive wealth for my children, so they would have an opportunity to do whatyou know what I had as a child, which was to be able to travel and ski andplay hockey and do all those types of things that everybody does. But so Ithink it's a combination of both. Obviously, if succession is not in the family and it becomes to asale, then it's in my interest to see Yo to drive the business to build it asbig as Hiy can, which will also drive the family wellside if there is ever anexit strategy to the business from the family, just saying, let's just rollthe flag out, we've taken this as far as we can and let's carry on thit life.So it's it's a bit of a balance, just a small addition. Unfortunately,there's just a lack of financial creativity amongst many family businessowners, that's ohell! I got four kids, so every kid gets twenty five percentof the business and and it's like well no, I mean, if yougave me a million dollars at thirty two years old. Instead of you know theseshares at seventy will guess what you know. I'd probably take five or tenpercent. You know e there's lots of ways. You can do that and to to John'spoint at a certain point that next generation has to have control. Theyhave to be able to make the tough decisions. The decisions are t toughenough, but if you gotta be worrying about going to the family, counsil toyou know get the approval on the capbax budget. Then there's something wrongthere jest Les Less Question. Yes, so you know when Canavas firstcame in it was bat scan, that's stupid. You know. Why are we going to do thisand part of it was because all of mycustomers at time and Canda liquor boards saw this canpas opportunity andevery time you went to them to sell beer all they wanted to talk to, butwas Canabus, and so we were a little late to the party, and it was becauseof me because I was a little late getting on board in terms of, I thinkthe same issues as you just getting comfortable with what Camvus is it andthen, and this agame speaks back to the family one of the few times we actuallyhad a family meeting, which included my mother on whether we're going to getinto the CANASAS business, because it's it's it's a big deal and mother was I.It was an interesting comment. My mother made my motheris a veterinarianand if you think about the whole issues with Oxycotton N in a sacler family andwhat they she said, boys, if ten or fifteen years from now, it's proventhat canibus is actually harmful. Will you shut the business down yes mo at was great last question for Johnjust to keep things Herra deavy yeah, I mean it's yeah. We used to talkabout Shere offs stomach in terms of I don't know what it is: Sheri, brainecells or whatever, but it's it's a it's definitely, I would say: There's notenough data so far to prove that it's affected the business or the purebusiness, but I see signs that it has and it just comes back to the consumerwho, at the end of the day- and this is probably the person who's working foryou- who has twenty five bucks for Friday night and I used to get it allwith a case of beer and now I only get a six pack because he's boughtsomething else do have a uestion for John and Canada's watching John H. Well, so national expansion has not been aparty for the business. Our PRIORITI is...

...to do what we do well and the mark istat. We know well, which is essentially been North America. So when you thinkof stanfields underwear, you think of stanfields, but we have the number one:a Ski Basleir brand in the United States market, hot chilis. We have thenumber one brand if I should say, ther's O not: U S Military Baselayer,homeland security, custom boarder patrol enx go out of North Carolina, so what we have done is we try tostrategically build brands in markets in North America that we know well thatwe can manufacture here that we can deliver here and we can expand that way in should we be focused on thinternational markets, it all comes down to to people an process whereyou're going to get it made and whats your priority in terms of m. You knowwhere you're going to go with your business and we were very lean in ourmanagement and management style. It would be very difficult for us toexecute what we need to do in North America and all three business unitsand then think about okay. Well, let's go let's go to Europe because we decideZeda and let's focus on you, know these five or six countries. I think weprobably have to get there at some point. We do show up in little bits andpieces with our hot chilis bran and places like Japan and South Korea withher fire retired in safety business in in Norway, South Africa and Australiaand their fire protection programs. So we we do it. We don't do it, probablyas in your faces. Maybe we should, and obviously our company could do, that wewould have to you know, get a lot of help with doing that: Ecause Er Procust,as primarily North American, in the channels and categories that that we know well, but there's noquestion. We have to look geographically, it's just a matter ofyou know when and then how we're going to take that approach to protect theStanfios Branso. It can be legacy forever and the building can stillstand up and people can come and see it, and so on all right, guy, thenks, very much listo John and Andrew. Would you guys join me and Takei you've been listening to theIvionjminor potcast to ensure that you never miss an episode subscribe to theshow in your favorite podcast player, or visit ivy dot ca forward, slashentrepreneurship? Thank you so much for listening until next time.

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