Ross Greenwood speaks to Alister Haigh, CEO of Haigh’s Chocolates, about succession planning in his business that’s seen his children start to learn the ropes.
Introduction: Sweet Succession Planning
Ross Greenwood: First up on Work. Life. Money. I want to talk chocolate to you. Not only do I want to talk chocolate to you, I want to talk Australian Chocolate to you. I want to talk Australian chocolate that you have probably known, eaten, and loved since you were a kid. That’s because Haigh’s Chocolate has been around that long. In fact today the chairman of the company, is a young bloke, I’ve got to tell you. He’s about to turn 88 years old. John Haigh.
The company’s actually run by his sons, Alister and Simon, the Chief Executive and the CFO. In fact there’s a fifth generations of the family now coming into the business. If you think about the fact that Australians even make high quality chocolates as Haigh’s makes, that’s not a bad story of a family being able to manage against competitors from Switzerland and other parts of the world. Because they’re all out there.
Of course then to be able to survive in the retail environment that we’ve got, with the imports coming in from overseas, they’d be doing something right. Let’s go and have a chat now. Alister Haigh, the boss is on the line. Hello Alister, how are you doing?
Interview with: Alister Haigh, CEO, Haigh’s Chocolates
Alister Haigh: Hi Ross, very well thank you.
Ross Greenwood: This program is called Work, Life, Money. I’m going to say that work, certainly that’s what you’d have to do plenty of. Life, well that’s chocolate in itself, I guess. Money, well you’ve got to have enough of that to go around. From that point of view, it almost exemplifies the struggles occasionally but also the ability to manage your business as it goes through the generations.
Alister Haigh: That’s right. Some ways I guess, survive the old saying of business can’t survive for three generations. I’m fourth along with my brother so we’ve defied it.
Ross Greenwood: Take me all the way back to when the business started. It was Alfred E. Haigh and again he’s still noted on the boxes and so forth. He started the very first Haigh’s Chocolate store in Adelaide. In King William street. Just explain his background and how he came to chocolate making in the first place.
Alister Haigh: He was making sweets, I guess you could say, at Jamestown where he grew up. Then he moved with his family down to Mount Gambier and got a bit more involved with sweets, sugar confectionery and to a lesser degree a little bit of chocolate. Because I don’t think chocolate was made in Australia at that time, it had to be imported.
Ross Greenwood: That’s the strange thing even to me. Why would a person in that day or even today, suddenly decide they’re going to go and make royal sweets or toffees or something of that nature? He must’ve had a bit of an entrepreneurial bend I would have thought.
Alister Haigh: He was a serial entrepreneur, but obviously he had a bit of a sweet tooth as well. Enjoy playing around with confectionery. The end of day because there was high content of sugar, it’s a natural preservative. Without air conditioning and refrigeration readily available it is a relatively safe product to make and has a reasonable shelf life.
Ross Greenwood: Of course it can travel. That’s another thing for a pretty much all conditions. People could use it for energy or use it for their own entertainment on the way through. From that point of view also, it was a situation where clearly the business has been through so many transitions. Just explain Alfred’s grandson, John Haigh, and just the way in which he also changed the business. He went to a whole different level. He went to Switzerland to try and learn, I understand.
Alister Haigh: He did, yes. We’re actually making the chocolate from cocoa beans. We had old machinery and old knowledge that have been acquired by my great grandfather in 1915. Dad decided that he wanted to lift the bar and was lucky enough to secure a job in Lindt & Sprüngli in Switzerland and learned how Swiss make chocolate and then came back here to try and replicate.
Ross Greenwood: It’s just incredible. Now South Australian business of course we understand that that is very much the home of Haigh’s Chocolate. Anybody who has had a look at this business or understood it, but of course now the business is right around Australia to even expand the business and to try and cater for a national audience. That must have been logistically a little difficult in those early days as well.
Alister Haigh: It was. When dad and my grandfather decided to go to Melbourne, there was no air condition or refrigerated transport available to get it from Adelaide. We actually had to build our own trucks and air conditioned them. We were actually doing the transporting for, I don’t know, probably 30 odd years.
Ross Greenwood: Seriously? So you build your own truck. Your own air conditions in truck, you build them yourself?
Alister Haigh: That’s right, yes.
Ross Greenwood: There must have been some complete disasters in the prototypes of those, I would have thought.
Alister Haigh: No, it wasn’t too bad actually. By today’s standard they were pretty primitive and they were very heavy to be insulated and the old technology and of course the volume is very low. Back in those days it enables us to do it, but of course now we use professional transport company.
Ross Greenwood: I mean you look back at Alfred. He’s bought the family home at Parkside in South Australia, he built a small factory there to make the chocolates and so forth. That’s a hundred years ago now. You can see that you can almost look back as you’d have seen a lot of the documents and the photographs from the family history. You’re running that business now. To look back at the way in which he operated as compared with what you do today, complete chalk and cheese. But at the essence, the emotions that make people buy your product and also the quality of the product that’s put out, is absolutely true today as to what it was when he created the business.
Alister Haigh: It was. Couldn’t say he really compromise on the quality of the chocolate. He just used and made what was available at the time, but he always used high quality ingredients wherever possible. We always had good quality cocoa beans and then all the nuts and fruits were always first grade. He was trying to make a high quality product back in those days.
Ross Greenwood: The other point about is also just in terms of being a family business and trying to work out the succession. The line of succession inside that business. I mean, having come down to four generations and potentially a fifth generation. As the family expands and gets bigger, that’s always an absolutely vital role or path that the family has got to go through, to understand who will run the business? Who will own the business in the future?
Alister Haigh: Yes. We’ve been a bit lucky that up until my brother and myself, there’s only been one son and follow the European tradition of the oldest son inherited it. Everyone else was told to marry well, but times are changing. You don’t get away with that anymore.
Ross Greenwood: No. What’s the idea now? What is the new family plan?
Alister Haigh: They’ve been encouraged to follow what career path they want and then think about the business when they’ve got a bit of experience under their belt. We’d normally say the age of 30 for them to consider that. But my children, they’re all have worked in the business part time through holidays and they have a pretty good understanding of the businesses. When our son comes back from Sydney, he touches base with the finance department because he’s an accountant. Youngest daughter follows all our social media because she is Marketing Manager for O’Leary Walker Wine, so has a keen interest from that side of the business.
Ross Greenwood: I tell you what? It’s quite interesting just thinking about the way in which you’ve got to constantly modernized, you’ve got to constantly refresh a business, a family, and operations no matter what it might be. I tell you what? That is a terrific story. Haigh’s Chocolates, fourth now going into a fifth generations potentially. The father, John, still the chairman at the ripe old age of 87 about to turn 88 which is incredible in itself. Also, then the great to see an Australian operation, a family run operation that is able to maintain itself through 100 years. I got to say to Alister Haigh the Chief Executive, we appreciate your time here on the program today.
Alister Haigh: No problem, Ross.
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