How a 357-Year-Old Company Reinvents Itself for the 21st Century
The Van Eeghen Group was founded in 1662 and the family still owns the business, has reinvented itself over the centuries.
(Bloomberg) -- Owning a company with 357 years of history brings some perspective.
The Van Eeghen Group was founded in Amsterdam in 1662 and the family still owns the business, which has reinvented itself over the centuries. It traded wool and wine, helped finance the newly established United States of America and moved into coffee, cocoa and dehydrated vegetables and spices after World War II.
Its long history features plenty of hits and misses, including a bet on U.S. immigration that included the purchase of about 5.5 million acres in New York and Pennsylvania before unloading the real estate for a small profit by 1840 (the family concedes it may have sold a bit too early).
Today, it specializes in sourcing specialty ingredients such as plant extracts for products like infant food and nutritional supplements, which it set up in 1991. Managing Director Jeroen van Eeghen, 41, hails from the 15th generation of the dynasty, having taken over in 2012 from Willem, 70, a cousin of his father.
The pair discussed their view of family businesses, succession and the challenge of balancing tradition with progress in an interview with Bloomberg at the company’s Amsterdam canal house headquarters in April. Their comments have been edited and condensed.
What’s unique about your company?
Jeroen van Eeghen: In general, one thing which is special about family companies is I don’t think we need very opportunistic people. Of course we are dynamic, but you have to have a bit of feeling for the long term and also appreciation of employees and things like that.
How important is growth versus stability?
JVE: If you go horizontal at one stage you will disappear. We have been growing quite aggressively over the last few years. So don’t think that we are just holding hands here. Sales have almost tripled compared to 2013. But maybe I have some reason that next year we will not really grow. Then I will explain to the board and it will be fine -- if I have a good reason. There will be no one at the shareholder meeting -- if you have a good reason for it -- who will say, ‘Why are we not growing at 10% this year?’
How does the family plan for succession?
Willem van Eeghen: Succession is different in every generation. The way we handled the hiring of Jeroen was excellent. We outsourced the hiring process. In 2011 the supervisory board sent a letter to the broader family and said I was about to retire in a few years. We also said if no qualified candidates presented themselves, we’d look outside the family. People had to send a cover letter and CV. They made a committee with an external head hunter with an HR person, and they did the preliminary assessment.
Why did you shift to functional ingredients?
WVE: We were doing coffee and cocoa and I didn’t like the trade. The market had changed in such a way that either you’ve got to do it on a large scale like Cargill does or you don’t. Otherwise you’re going to get stuck in the middle somewhere, you’re going to be squeezed out.
We needed to do something else and I really thought about something which required more knowledge in a certain way so that the entry for newcomers wouldn’t be easy. And functional foods fitted in very well there. I was doing some work in Japan and I saw supplements in shops and I thought this is something really new.
What does 357 years of history bring?
JVE: Perspective. Around the 1900s you could argue we were one of the most powerful companies in the Netherlands. And I spoke to a historian, and they said around 1800 we were also one of the biggest houses in America. In between there was a dip. If you look in these longer terms you can keep successes and failures in perspective.
Why has van Eeghen survived?
WVE: It helps that the family aren’t dependent on the dividend. You have a lot of family companies where shareholders have become more dependent on dividend pay and if it’s a bad year they have to sell their house. I’ve had a shareholders meeting where we declared a dividend and our shareholders said, “We don’t need that much, put it in your reserves.”
What’s a favorite family anecdote?
WVE: Suzanna Block was from the second generation. Her husband died at an early age. She had three sons but when her husband died, her sons were too young to take over. So she took over. It was highly unusual for a woman to take over in those days. It was a male-dominated, macho world. She did a lot of the preparatory work for going to the West. The eldest son eventually took over from her but then he died and she took over again. So she took over twice. She saved the company. They often say that family companies don’t survive two or three generations. That was nearly the case for us.
To contact the reporter on this story: Tom Metcalf in London at tmetcalf7@bloomberg.net
To contact the editors responsible for this story: Pierre Paulden at ppaulden@bloomberg.net, Peter Eichenbaum, Steven Crabill
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