Case Study Beerenberg 165 years in the making Presenters: Anthony Paech – Managing Director Beerenberg Andrew Doust –BDO Chartered Accountants & Advisers

Located in Hahndorf in the Adelaide Hills

1.Johann George Paech1793 – Johann Christian Paech1821 – Johann August Paech1860 – Herman Christian Paech1903 – 1969 Our family origins

Anthony Paech – 1968 Managing Director (married) Robert Paech – 1969 Farm Manager (married) Carol Paech Financial Controller Grant Paech – 1940 New Product Development The 5 th and 6 th generations Sally Jane Paech – 1971 No business involvement Natasha Jane Scott 1998 Shannon 2002

Management committee (meet monthly) Managing DirectorAnthony Paech Production ManagerMatt Noske New product developmentGrant Paech National Retail Sales ManagerRussell Heyzer Farm ManagerRobert Paech Financial ControllerCarol Paech

Brief business history Farm settled in 1838 by Paech Family from Germany 1966 Grant inherits family farm from Father, two sisters paid out and get married 1968 Anthony born 1969 First crop of strawberries planted 1969 Grant's father dies, Robert born 1970 Strawberries sold on side of road and first batch of jam made

1971 Sally born 1975 Beerenberg brand created 1980 New packing shed and jam kitchen built 1985 Qantas contract started New management talent employed Brief business history (cont)

1989 Anthony graduates in IT, starts in SA wholesaling business 1989 exports start 1993 new machines bought and shed built 1995 strong exports Business poised for growth Late 1996 Anthony leaves to study MBA in Perth Brief business history (cont)

Discussion 1996 – Beerenberg is ramping up – good growth potential. One son is committed to and dependent on the business. The other leaves with no promise of return. What would you do if you were Grant? What are his options.

Brief business history (cont) 1998 Anthony returns to business – General Manager 1999 decision made to invest in huge new portion packing machine and facility 2000 machine commissioned Good export growth New key staff employed 2002 Sydney competitor purchased Strong Growth in profitability and revenue

Sales history

What drives our family business? Satisfaction of seeing products distributed world wide Aussie battler takes it to the world! Not the money (but nice to have) Pride in our heritage

Looking forward – vision Pursue excellence not size Globally recognised for best quality Available in every 5 star hotel around the world Profitable enough to explore opportunities

Discussion 1.What challenges can you see on the horizon for Beerenberg and how would you suggest they deal with these to avoid future problems? 2.Can you anticipate a potential clash in aspirations between the brothers? How would you manage this? 3.How can Beerenberg use its family origins to compete against the big boys in the international market. What are some of the drawbacks for them as a family business as they expand internationally? 4.How would you suggest Beerenberg sustain its entrepreneurial spirit especially given that they now have so much more to lose?

Looking forward - what could cause tension for us in future? Different aspirations – how big, motivations for growth Burn out Risk aversion as the stakes get higher How far to stretch the brand Introducing more outsiders in core roles Defining and retaining our culture Sustaining the innovation cycle and retaining a commercial edge Industry pressures – supermarkets Marriage break ups