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To ensure the survival of his sixth-generation family business, Richard Strang, CEO of Strang Produce Inc., knew that he had to invest in his company’s future.
To ensure the survival of his sixth-generation family business, Richard Strang, CEO of Strang Produce Inc., knew that he had to invest in his company’s future.

Case study

Slow and steady approach no longer suitable for sixth-generation business Add to ...

THE CHALLENGE

To ensure the survival of his sixth-generation potato farming family business, Richard Strang, CEO of Strang Produce Inc., knew that he had to invest in his company’s future.

Mr. Strang’s father, Robert, had built the business at a slow and steady pace, expanding as funds became available. While this cautious approach had ensured the survival of the farm during lean years, it also meant that they didn’t capitalize on new growth opportunities.

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Mr. Strang knew that spending 14 hours operating aging equipment and then another four in the workshop to repair it wasn’t efficient. Given the ever-increasing wholesale contracts, he knew that investment in new farm equipment and acquiring more cultivable land was critical to the future success of the family farm. The challenge was how to convince his father of the merits of borrowing.

THE BACKGROUND

In 1855, the Strang family started a potato farm in Malden, N.B. With five acres of land, they used the produce to barter for provisions, selling off any excess in the local markets. Mr. Strang’s father continued the operation, selling the produce door-to-door in the local area.

A chance encounter with a buyer for Atlantic Wholesalers, who was impressed with the quality of the produce, led to a small bulk order contract.

Over the next 38 years the relationship blossomed into bigger orders from Atlantic Wholesalers as well as from Loblaw Cos. Ltd. and Co-op Atlantic for supplying potatoes across Atlantic Canada and Newfoundland.

Growing up on the family farm, Mr. Strang knew that he wanted to carry on the family tradition and joined the operations on a full-time basis after graduating from high school in 1987.

THE SOLUTION

Mr. Strang had to figure out a way to balance his aggressive strategy with his father’s cautious risk-averse approach.

Both agreed on the need to expand, but rather than following an approach that relied heavily on borrowing, they established an incremental plan that allowed them to buy new equipment and specialized machinery, as well as more cultivable land to feed the demand. The family continued to re-invest their earnings to supplement borrowing for the expansion and mechanization of the farm. The operation prided itself on always meeting demand from their wholesale customers as well as maintaining their quality produce and service.

THE RESULT

Over the last 10 years, the farm has seen impressive growth with business expanding over 50 per cent and the cultivable land increasing to more than 330 acres employing more than 15 people on a full-time basis. The farm has continued to keep up with the latest safety and environmental regulations to stay ahead of the competition.

Moving ahead, Mr. Strang is keeping up with industry trends by investing in new labelling and packaging processes as well as sizing of product. Keeping up with the family tradition, his two sons – David and Devon – have joined the business.

David has been working for the last two years after completing his high school and Devon has recently joined after graduating from Mount Allison University’s business program. Devon is working on setting up Canada’s first farm to table Vodka cottage distillery, which will use the farm grown potatoes as raw material. Blue Roof Distillers is set to launch next year with their Vodka product.

Nauman Farooqi is a professor and head of the department of commerce in the Ron Joyce Centre for Business Studies of Mount Allison University.

This is the latest in a regular series of case studies by a rotating group of business professors from across the country. They appear every Friday on the Report on Small Business website.

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