Saturday, July 19, 2008

Mr. Jelly Bean Agenda steps down

Most of you probably know David Ganong as that self interested individual who at last year’s Security and Prosperity Partnership (SPP) meeting in Montebello had the brilliant idea of standardizing packaging for jelly beans as between Canada and the US as the solution to all of our economic woes.

You see, David Ganong is one of 10 CEOs handpicked by Stephen Harper to ostensibly represent the interests of Canada on the North American Competitiveness Council.

The composition of the “Canadian” representatives of this panel is quite telling of not just the SPP, but also Stephen Harper, as it includes two US born citizens, the CEO of Home Depot Canada (how’s that for Canadian?), the CEO of the worst phone company on the continent whose directors give new meaning to the words “Strategic Oversight” , the CEO’s of not just one life insurance company but two (just to make sure that they are over-represented), and a guy who makes chocolates (and jelly beans), but can’t seem to turn a profit:

Shaken by chocolate woes, Ganong goes outside for help

From Saturday's Globe and Mail

July 18, 2008 at 9:14 PM EDT

In 1977, David Ganong, a young pup of just 34, took over the president's job at his family's chocolate company from his aging Uncle Whidden. He was woefully unprepared, and Ganong Bros. Ltd. suffered while David was learning the ropes.

Thirty-one years later, Mr. Ganong is determined not to make the same mistake with his own succession – not when upheaval in the chocolate industry is creating both hazard and opportunity for his St. Stephen, N.B., company.

On Tuesday, food industry veteran Doug Ettinger will succeed Mr. Ganong as president and CEO of the candy and chocolate company.

He will be only the fifth president in the 135-year company history and the first from outside the family.
David Ganong, pictured with daughter Bryana, steps down Tuesday as Ganong Bros. president

“We want to do it in the best interests of the business, not just because there's bloodline,” says Mr. Ganong, who has two children in the business, both deemed not ready to assume the reins of chief executive.

Mr. Ganong joins the legions of family business leaders compelled to look outside the company for transitional leadership until the next generation shows whether or not it can do the job.

In this case, the next generation consists of David's daughter Bryana, 35, who is manager of the expanding private label business, and son Nick, in his late 20s, who runs the chocolate department. (Another son, Aaron, works in the hospitality industry.)

“They need some broadening and some time,” says Mr. Ganong, who says he hopes one of them will ultimately take over. “I don't believe I have the fire and the energy to stay on long enough to act as that bridge.

“The company needs someone younger; it needs some new ideas; it needs some new energy.”

For those things, he is counting on Mr. Ettinger, a Nova Scotia native in his late 40s who has held positions with Coca-Cola Co., Nestlé, Parmalat and Saputo Inc. Recently, he has been working as a leadership consultant for Eagle's Flight, a Guelph, Ont.-based firm.

He joins a chocolate industry that has lost half its Canadian manufacturing capacity in the past 18 months, Mr. Ganong estimates. The rise of the Canadian dollar, combined with soaring commodity prices, have forced the shutdown of a number of factories.

Mr. Ganong says his own company has been forced to slash costs, including cutting management and rank-and-file jobs, and invest in better equipment. But as rivals' plants have closed, Ganong is about to emerge as the largest Canadian chocolate maker.

“The company survived the worst of the consolidation and stayed standing when the tsunami washed out,” Mr. Ganong says.

It has benefited from its ability to perform contract production for other brands, in addition to its own Ganong, Delecto, Fruitfull and other labels. Mr. Ganong says contract and private label volumes have risen to more than half of total production, giving Mr. Ettinger a base to build on.

The private company suffered a big financial loss two years ago, but came close to breaking even in the fiscal year ended in March, says Mr. Ganong, who forecasts a profit in the current year.

After two years of sales declines, largely because of a challenging U.S. market, it rebounded to double-digit growth last year and should do it again this year, he says.

The succession plan has been two years in gestation, as Mr. Ganong has worked with a board dominated by outsiders and headed by chairman Purdy Crawford. Mr. Ganong will remain a director, will advise the company in some capacity, and is still the 93-per-cent owner.

Ganong Bros. employs more than 340 people in New Brunswick, up 40 from a year ago. It does not disclose annual revenue.

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