Blommer Chocolate is an exceptional company. It is distinctive not only for its business success—it is the largest cocoa bean producer in North America—but also for its tenacity. Only 12 percent of family-owned businesses survive to the third generation; Blommer is among that select few. The Blommer family has successfully navigated the shoals of governance and succession upon which many family businesses founder as they enter their third generation. But it has not always been easy; a rift in the family threatened the company’s independence at one point. “We have a great company, and the only thing that would derail it is if we failed to come together as a unified family team,” says Peter Blommer, a member of the third generation, who serves as chief operating officer.
 Henry Blommer founded the company in 1939 with his brothers, Bernard and Al. One of Chicago’s well-known, family-owned confectionaries, it grew in subsequent decades by expanding its product line and its facilities from California to Pennsylvania.
When Bernard died in the 1950s, Henry and Al bought his family’s shares. Though Henry was the larger shareholder, he gave his brother Al an equal number of voting shares, which, like many family businesses, the Blommers had issued to ensure that control over the company remained centralized. They sealed the deal in haste, with a handshake, when Henry became gravely concerned about his health. Neither brother considered succession or governance issues. Unexpectedly, Al died first, and left his 50 percent voting stake to his children.
Henry, it turned out, would be the sole Blommer brother to enjoy a long life. He ran his business with entrepreneurial skill and energy, and appointed his sons, Hank and Joe, to management positions. Al’s son, Bob, also worked at Blommer Chocolate, but felt increasingly alienated from both Henry and the business. This led to tensions between the two branches of the family, which eventually resulted in their estrangement.
In 1992, after Henry died at the age of 90, his sons were stunned when they received a call from Cargill, the privately held agribusiness giant, informing them that it had purchased Al’s family’s 50 percent voting stake, and it wanted to acquire the company in its entirety. They were particularly shocked that Al’s heirs sold to Cargill without consulting them, since, despite the strains between the two groups, Hank and Joe had been negotiating informally for more than a year to purchase Al’s family’s stake.Hank, Joe and their families had fully intended to continue to operate Blommer as a family-owned business, and to pass it on to their own children. These hopes were now in jeopardy. The third generation of Henry’s family, including Hank and Joe’s adult children and the son of their deceased sister, Ann, had begun to work for Blommer Chocolate, and they were determined to keep the enterprise in the family. Peter Drake (Ann’s son, and the head of sales and marketing) realized, “We had to unify as a family in order to accomplish that, so we could fight the battle together.”
They went directly to Cargill board members who were now on their own board, and explained that, like Cargill, they, too, were a family business and they wanted to remain independent. They were gratified to find the Cargill representatives receptive, and they soon arranged to buy back the rest of their company.
Henry’s sons Hank and Joe kept the voting shares themselves, but, as a result of the company’s near-death experience, the family began to plan actively for the future, and to engage the third generation in leadership. “As [the third generation] started working together, we realized that we wanted to make sure there was structure in place to allow us to work as well together as possible,” Drake explains.
|
