Transition strengthens family produce business
Photos courtesy of the Streef family
From left: Dylan, Jaidin, Jack, Peter, John, Nathan and Chris
It began with five brothers and a 100-acre farm in southern Ontario.
Martin, Peter, John, Albert and Jack Streef became partners in June 1977; today, Streef Produce Ltd. is a 2,400-acre family-run vegetable-growing and wholesaling business with a farm near Princeton, Ont., and wholesale space at the Ontario Food Terminal in Toronto.
“Mom and Dad were partners with us in the beginning because three of the five of us were still under age. But they got out after a few years, because we were going in a different growth direction than they had planned, and (they) just let us go,” Jack says.
Streef Produce now has three senior and four junior partners: Martin’s son Chris and Peter’s son Jaidin work in Toronto focused on sales, distribution and quality control. Jack’s two sons Nathan and Dylan head up on-farm production and food safety.
Dylan with Chris’s son Logan.
Their crops are potatoes, green beans, sweet potatoes and asparagus, with corn and soybeans grown for rotation. Produce is packed fresh-to-order at their full-scale on-farm packing facility. They supply a wide range of buyers with product sourced from around the world via their distribution hub at the Ontario Food Terminal.
Change began a decade ago when Martin passed away. Five years later, Albert wanted to exit the business and retire, and at the same time, a next generation was ready to come on board. The transition started with a conversation with their accounting firm, BDO.
“We didn’t know how to handle bringing in junior partners with a senior partner exiting at the same time,” Jack says. “BDO guided us through the hard questions and opened our eyes and minds to what we needed to do. They had transition experts, but we also worked with our usual people who knew our history and the obstacles the business needed to overcome.”
The biggest concern was making the transition as seamless as possible and knowing who was responsible for what. Having that in place made it business as usual for the company during the process.
Success through communication
A big part of their transition success was communication. Everyone spoke openly about their personal goals and what they wanted to see in the partnership’s future; having mediators at the table helped keep everyone focused and in check.
“It opened up a whole new conversation, where compromise came into play. Goals could be met, the business could stay sustainable, and everybody was satisfied with the final outcome,” Jack says.
They also made sure they considered everyone’s interests and skills so the junior partners – who had grown up working in the business in jobs ranging from sweeping floors to management – could have positions suitable for them. That approach was used by the Streef brothers when they first started the company, and Jack believes it’s helped contribute to their success over the last four decades.
“The worst thing in a transition is to bring a junior partner into a position they’re not interested in. They’ll feel like they’re chained and won’t put 110 per cent into it,” he adds. “Once our junior partners became owners, though, it became much more than just doing a job for them.”
Determining how to extract net worth from the company without choking the next generation’s ability to grow was a challenge, but for the senior partners, the biggest hurdle was being more hands-off in the day-to-day operations of the business and accepting there is more than one way to reach a company goal.
“They will make mistakes, but we did as well 20 years ago and we still do today. We learn from those incidents – the key is embracing change instead of being scared of it,” Jack says. “During the last five years, we’ve seen real change in our junior partners. In year one, there was a lot of asking what we wanted them to do. Now, in year five, they sarcastically ask us what we’re doing.”
If they could do it all again, they’d start the process earlier – a more gradual transition would have given the next generation the opportunity to ease in to their roles sooner and made the senior partners more comfortable with stepping back.
But overall, it’s been a positive move for both business and family. Since the transition, Streef Produce has taken advantage of changing market opportunities and their new team’s talents to expand, adding asparagus and sweet potato production. And a vegetable equipment division that focuses on supplying growers with cutting-edge technology never before available in Canada, from computerized transplanters and automated weeding machines to optical graders for all kinds of vegetable crops.
“The benefit has been two-fold: it has strengthened my relationship with my kids and my family, and it has taught us to stay focused on what’s really important and not sweat the small things,” Jack says. “We’ve been opening door after door and we’ve never looked back since we’ve done it.”
Family first and business partners second
After 25 years as the Streefs’ accountant, BDO’s Coralee Foster knew both the business and the family well. When it came time to talk transition, she brought in BDO business transition specialist Brent VanParys to facilitate discussions among family members and help everyone participate in creating a vision for their common future.
“A fresh set of eyes without preconceived notions of what they should do is valuable in this kind of situation,” she says.
According to VanParys, involving the next generation directly in the decision-making was a key strength of the Streef transition. And even when opinions differed, they were respectful of each other’s needs and opinions – remaining family first and business partners second.
“You can’t transition ownership or management without considering the impact on the family. These three systems overlap,” VanParys says. “But if you do a good job of family, you can generally do a good job at the other two as well.”