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jerryking : dynasties   12

Andrea Illy: adapting a family business to a multinational world
JULY 20, 2019 | | Financial Times | by Rachel Sanderson.

*The coffee group chairman argues his style of capitalism is good for business, workers and the consumer*

Andrea Illy, third generation heir of the Illycaffè dynasty, last year struck an alliance with investment group JAB Holdings to produce and distribute Illy coffee capsules...he makes it clear that he does not intend to sell the closely held family company..... “It is a very simple principle about preserving our freedom,” he says of his and his family’s decision, one....Freedom is a word that comes up frequently in conversation with Mr Illy.....who espouses a sort of pick-and-mix version of capitalism, resolutely refusing to focus only on sales and profits. Illy argues his style of capitalism is not charity but good business.......Illy has paid its growers on average 30% more over market value for decades in order to maintain its supply of top Arabica beans. “....The company is rooted in the border city of Trieste....which is also ingrained in the nature of the family......globalisation and increasing competition in the coffee sector has forced Illy to adapt. Staying closely held does not work any more. Co-opetition is his new mantra."“It is like the way to adapt in the savannah. If you do not want to be prey to the big lion, you live in a tree.”"

Part of that adaptation has been the deal with JAB, which allowed Illy coffee capsules to be produced and distributed in supermarkets globally, something that Illy could not do alone......The global coffee industry has become increasingly like the beer tie-ups of the 1990s, with big groups such as JAB and Nestlé snapping up smaller companies. Illy has risked being squeezed between these behemoths and the microroasters emerging as the hip caffeine hit for millennials and Gen Z.....Bigger groups have circled Illy for years. Mr Illy says the family chose JAB because it had the technology he wanted and accepted a licensing agreement rather than an equity one.....To build its global presence, Mr Illy is now looking for a retail partner in the US to help launch Illy coffee bars in the world’s largest coffee market. He says he could even sell a slice of equity. But he is very specific who it would be to: a private financial investor, not an industrial group.....there have been other adaptations. Three years ago, Illy hired an outside chief executive — Massimiliano Pogliani, a former executive at Nestlé’s Nespresso — for the first time since the company was founded in 1933 by Mr Illy’s grandfather, Francesco. Mr Illy has also built a board including executives from clothing group Moncler and Italian cosmetics group Kiko...... studies show that family businesses often fail in the third generation. The move to hire outside management and governance comes as studies also show that family-owned, professionally-run companies are among the best performing in the long term. ......Mr Illy sees these alliances as the only way for a family business model to thrive and to not have to cede control to a multinational when “complexity is becoming too big for a single person to manage”.
.....good stewardship is good business......The Illy family is a supporter of arts and culture, including Trieste’s annual sailing regatta, the Barcolana, where hundreds of boats race across the bay. Mr Illy says this creates a virtuous circle: the more attractive Trieste becomes, the more talented people Illy can attract to work for it and the more visitors come to the city and raise its brand profile........A portrait of his father Ernesto hangs opposite his desk. “I put the painting there to ask him to control what I do,” Mr Illy says.

What, then, has he learnt from his family? “Society is made by the private sector, mostly. And if you want to improve society then we need to be able to pursue long-term goals which are beyond profitability, and then you have to be free and accountable only to yourself,” he says.

Three questions for Andrea Illy
Who is your leadership hero? I have three: Muhtar Kent, former chairman of Coca-Cola; my father; Sebastião Salgado [the photojournalist].

If you were not a CEO/leader, what would you be? A neurosurgeon.

What was the first leadership lesson you learnt? My father asked me when I turned 14 years old where I wanted to go to school. Do you want to start a journey to be a leader or do you want to have fun? I chose the first option and as a result chose boarding school in Switzerland over a local school at home. There I learnt about discipline and hard work but also about the power of a charismatic leader from my headmaster.
alliances  boards_&_directors_&_governance  climate_change  coffee  coopetition  dynasties  family  family_business  family-owned_businesses  financial_buyers  heirs  high-quality  Illycaffè  investors  JAB  licensing  Nestlé  premium  private_equity  privately_held_companies  stewardship  sustainability  the_counsel_of_the_dead  virtuous_cycles 
july 2019 by jerryking
Canada must reassess its approach to China - if not, we may get steamrolled by the world’s new juggernaut - The Globe and Mail
JONATHAN MANTHORPE
CONTRIBUTED TO THE GLOBE AND MAIL
PUBLISHED JANUARY 30, 2019

.....The current CCP regime will not last forever. Dynasties never do, and the historical record in China is that they all die violently. This will likely happen to the CCP, but it’s not a good bet that it will happen anytime soon. Thus, Canada and all other countries having to engage with China while maintaining their own liberal-democratic institutions face some harsh realities. If Canada wishes to preserve its values and its standards of living based on trade in a world dominated by China, if it wishes to expand its influence as a global middle power, present and future governments in Ottawa need to prepare the ground. They need to cement political, economic social, and security ties within NATO and the G7, along with other like-minded countries [JCK: that is, "strategic alliances"]. Canadian politicians need to assume a much tougher and more self-assured attitude toward Beijing than is now the case.
arbitrariness  authoritarianism  Beijing  bullying  Canada  Canada-China_relations  China  Chinese_Communist_Party  Donald_Trump  dynasties  editorials  extradition  fascism  hostage_diplomacy  isolationism  Meng_Wanzhou  never_forever  reassessments  rule_of_law  strategic_alliances  U.S.  Xi_Jinping 
january 2019 by jerryking
An unusual family approach to investing
May 30, 2018 | FT | John Gapper.

JAB’s acquisition of Pret A Manger resembles private equity but with a long-term twist.

Warren Buffett’s definition of Berkshire Hathaway’s ideal investment holding period as forever. ....Luxembourg-based JAB, owned by four heirs to a German chemical fortune, takes a family approach to investing. It is unusual in that this holding company seeks to retain its portfolio companies for at least a decade. These include Panera Bread, Krispy Kreme and Keurig Green Mountain coffee, which it merged with Dr Pepper Snapple in an $18.7bn deal in January 2018. This week JAB acquired the UK sandwich chain Pret A Manger for £1.5bn, continuing its buying spree of cafés and coffee, mounting a challenge to public companies such as Nestlé.

**These companies are acquired not to be traded but to be invested in and expanded.**

JAB is an innovative combination of ownership and investment in a world that needs challengers to stock market ownership and private equity. It is family controlled, but run by veteran professional executives. When it invests in companies such as Pret A Manger, it deploys not only the Reimann family’s wealth but that of other entrepreneurs and family investors.......Some of the equity for its recent deals, including Panera and Dr Pepper, came from funds raised by Byron Trott, the former Goldman Sachs investment banker best known for being trusted by the banker-averse Mr Buffett. Mr Trott’s BDT banking boutique specialises in advising founders and heirs to corporate fortunes, including the Waltons of Walmart, and the Mars and Pritzker families.

This is investment, but not as most of us know it. By definition, the world’s companies are mostly controlled by founders and their families — only a minority become big enough to be floated on stock markets and need to disclose much of their workings to outsiders. Family fortunes also tend to remain as private as possible: there is little incentive to advertise how much wealth one has inherited......As [families'] fortunes grow in size and sophistication, more of the cash is invested in other companies rather than in shares and bonds. That is where JAB and Mr Trott come in.

Entrepreneurs and their families tend to be fascinated by their own enterprises and bored by managing their wealth. But they want to preserve it, and they often like the idea of investing it in companies similar to their own — industrial and consumer groups that need more capital to expand. It is not only more interesting but a form of self-affirmation for the successful....Being acquired by JAB is appealing. The group turns up, says it will not take part in an auction but offers a good price (it bought Pret for more than its former owner Bridgepoint could get by floating it). It often keeps the existing executives, telling them they have to plough their own money into the company, and invests in long-term growth provided the business is efficiently run.

This is more congenial than heading a public company and contending with a huge variety of shareholders, including short-term and activist investors. It is also less risky than being bought by 3G Capital, the cost-cutting private equity group with which Mr Buffett teamed up to acquire Kraft Heinz. While 3G is expert at eliminating expenses it is less so at encouraging growth.
coffee  dynasties  high_net_worth  holding_periods  investing  investors  JAB  long-term  Nestlé  Pritzker  private_equity  privately_held_companies  Unilever  unusual  Warren_Buffett  family  cafés  Pret_A_Manger  3G_Capital  discretion  entrepreneur  boring  family_business  heirs 
may 2018 by jerryking
The Politics of Clan: The Adventures of Jared Kushner - The New York Times
David Brooks MAY 30, 2017

We tell young people to serve something beyond self, and Kushner seems to have been fiercely, almost selflessly, loyal to family. But the clannish mentality has often ill served him during his stay in government.

Working in government is about teamwork, majority-building and addition — adding more and more people to your coalition. It is about working within legal frameworks and bureaucratic institutions. It’s about having a short memory and not taking things personally.

Clannishness, by contrast is about tight and exclusive blood bonds. It’s a moral approach based on loyalty and vengeance against those who attack a member of the clan. It’s an intensely personal and feud-ridden way of being.

Working in government is about trusting the system, and trusting those who have been around and understand the craft. But the essence of clannishness is to build a barrier between family — inside the zone of trust — and others, outside that zone. .......Our forebears have spent centuries trying to build a government of laws, and not of hereditary bloodlines. It’s possible to thrive in this system as a member of a clan — the Roosevelts, the Kennedys and the Bushes — but it’s not possible to survive in this system if your mentality is entirely clannish.
clans  dynasties  David_Brooks  Donald_Trump  hereditary  Jared_Kushner  personal_connections  nepotism  tribes  White_House 
may 2017 by jerryking
NDP win fits historic pattern - The Globe and Mail
JEFFREY SIMPSON
The Globe and Mail
Published Thursday, May. 07 2015,

Alberta was growing fast until recently. Having so much money, PC governments siphoned much of it into public services. On a per capita basis, for example, Alberta spends the most on health care (along with Newfoundland), and yet demands for even more spending never relented. The province needed more schools, more university and college places, more police, more roads, more of everything. As these services expanded, so did the number and clout of public-sector unions, who formed the spine of the NDP’s victory on Tuesday and to which the new Premier, Rachel Notley, will now be beholden. They will expect some degree of munificence from her, and she will be hard-pressed, given the province’s straitened fiscal circumstances, to accede to all of their demands.
Jeffrey_Simpson  Alberta  elections  NDP  Preston_Manning  public_service  public_sector  unions  history  reform  provincial_governments  Wildrose  Rachel_Notley  creeping_normality  complacency  Ralph_Klein  dynasties  populism 
may 2015 by jerryking
Review & Outlook: Breaking the Kim Dynasty - WSJ.com
DECEMBER 20, 2011| WSJ | Editorial.

Moments of transition are also when a syndicate like the one that rules North Korea may face internal leadership disputes. It's possible that as the Kim gene pool gets shallower, the young Kim may not be able to maintain control the way his father and grandfather did. The West can exploit this tension by staying united in isolating the regime until it changes.

The wrong approach is to believe the regime will change with another round of cash and other carrots. In recent days Washington and Seoul have been tempting the North back to the six-party talks on denuclearization with offers of humanitarian food aid. But the lesson of the past 20 years is that this helps the regime by giving it currency or other aid to pay off its members and by enhancing its international stature.

The Clinton Administration tried and failed with its Agreed Framework of 1994, and the Bush Administration tried and failed in its second term with Condoleezza Rice's ploy to remove North Korea from the U.S. list of state sponsors of terror. North Korea pocketed everything, lied about dismantling its nuclear plans, and kept on proliferating. A replay might enhance Kim Jong Eun's stature inside the regime.

Dictatorships tend to split when they are under economic and diplomatic pressure
dynasties  editorials  North_Korea  Kim_Jong_Il  gene_pool  deaths  dictatorships  Kim_Jong_Eun  succession  nepotism  transitions 
december 2011 by jerryking
John Bolton: 'The Great Successor' - WSJ.com
DECEMBER 20, 2011
'The Great Successor'
There's no guarantee that the North Korean military will accept another hereditary ruler.

By JOHN BOLTON
John_Bolton  North_Korea  U.S.  succession  dynasties  op-eds  Kim_Jong_Il  deaths  dictatorships  Kim_Jong_Eun 
december 2011 by jerryking
Paying a Call on the Adams Family - WSJ.com
MARCH 1, 2002 | WSJ | By JOHN QUINCY ADAMS JR.

"America's First Dynasty: The Adamses, 1735-1918"
By Richard Brookhiser
Reviewed by John Quincy Adams Jr.

The greatest of all American political dynasties, however, is not a recent one. It is that of the Adamses, the subject of Richard Brookhiser's multigenerational study. (I should confess to being a member of this large and ever-expanding family.) Of course John Adams, the patriarch and second president of the U.S., has received a great deal of attention of late thanks to David McCullough's magnificent biography.
book_reviews  dynasties  Founding_Fathers  family  David_McCullough 
november 2011 by jerryking

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