Some years ago Geordie Willis attended a families in business course at Harvard University. For Willis, a member of the eight generation of one of the UK’s most storied family businesses, it made sense to learn from some of the greatest minds like professor John Davis about the subject.
But one thing he hadn’t foreseen was how many of the attendees from other family businesses turned to him for advice. That, he says, was probably due to the fact that Berry Brothers and Rudd, is one of the oldest family businesses still in existence. “Given our longevity, they felt we had the answers,” he says. Willis is creative director at Berry Bros.
Wine merchant Berry Bros was founded in 1698 and is said to be the 9th oldest family business in the UK today. Given the UK’s big contribution to the evolution of global capitalism and all the disruption between when Berry Bros was founded and now that is some achievement.
But in a recent interview with Willis and Lizzy Rudd, chairwoman of the wine merchant, you get the impression both are keen to downplay Berry Bros’ contribution to the unwritten laws of what lies behind a successful family business. Maybe that’s because of their British understatement. Also, a prosperous luxury company like Berry Bros – it sells many of the world’s best wines – doesn’t need to brag about itself, the brand speaks for itself. But from an outsiders point of view, Berry Bros has much to teach other businesses looking to survive a bit longer than your average startup.
Yes, good family and corporate governance, attention to how the next generation engages with the business, bringing in outsiders to senior management positions – the usual list of family business best practices have been followed by Berry Bros and their family owners.
But one thing that crops up throughout the conversation with Willis and Rudd, and a bit more original than the usual stuff on what’s behind a successful family business is how they’ve worked with other family enterprises to prosper.
This is most apparent in the business itself. As its name suggests, Berry Bros and Rudd is owned by two families – the Berrys and the Rudds. The Rudd family became part of the St James’s-based company in the 1920s when Hugh Rudd joined Berry Bros in 1920. Hugh, who is Rudd’s grandfather, had run his successful family-owned wine merchant in the city of Norwich in the county of East Anglia. But after the first world war, the focus of much of the wine business had shifted to London, so Hugh moved to the capital and worked for Berry Bros. His contribution to the business was such that in the 1940s Berry Bros added Rudd to its name and as a shareholder.
Unsurprisingly, after working three generations together, the families are very close. “We feel like we’re cousins,” says Rudd. And the two family dynamic in one business helps to keep conflict to a minimum, says Willis. “There are some big benefits of two families in the ownership structure,” he says. “Typically, with one family you’re potentially open to more infighting. You are better behaved with two families.”
But the family business nexus is also very apparent with the relationships Berry Bros has with its stakeholders. “Around 85% of the wineries we work with our other family businesses,” says Willis. This has built trust and lasting relationships, which are able to stay with a business through good and hard times. “To have trusted relationships is so important in our business. This ‘trust and respect’ part of the business is a core value,” says Rudd.
Perhaps another reason why the business has prospered for such a long time is the apparent lack of claims on the fruits of the company from other family members. In the 20th century, both families lost members in the two world wars and reading a potted history of the business in the two centuries before, there is little indication the Berry family became unwieldy big. Or if they did, no member became overly greedy to derail the path of the company.
Another way of understanding the success of Berry Bros is how it has innovated through its considerable tradition. Management academics like Alfredo De Massis have pointed out that tradition, which Berry Bros has in abundance, can represent a powerful and unique source of competitive advantage for family businesses wanting to innovate. “Our research has found that innovative family firms have special capabilities to leverage tradition to develop successful new products – and hence innovate,” says De Massis.
The standards and values should be never-ending and just exist, but the business still needs to evolve
To that point, Willis says: “The standards and values should be never-ending and just exist, but the business still needs to evolve.” Berry Bros has evolved by staying ahead of wine trends, by slowly, but successfully expanding its business abroad, particularly in fast-growing wine markets like Asia – and by seeing opportunities in the digital world early on.
Simon Berry, the chairman before Rudd and Willis’ uncle, made a commitment early to the internet and created a website for the business way back in 1994 before the dot-com boom really got going. Berry Bros was also an early convert to e-commerce, which now drives a considerable part of the sales for the wine merchant. Willis himself has contributed to the innovation process by championing the opening of a shop for Berry Bros wine in Pall Mall.
The business is closely held with both families owning 95% of the company. Given the trend for big investors to buy private businesses right now, Berry Bros must have piqued the interest of investors looking to get their hands on one of the UK’s most storied private companies. Rudd and Willis aren’t saying if this is the case, but for now, the for sale sign isn’t up, nor is it likely to be for some time, if at all.
“I don’t think we would ever entertain the idea of selling the business,” says Rudd. “Although we might think about partnering with someone else to help us achieve a goal.” An example of this partnership idea for the company, says Rudd, is the involvement of Berry Bros in the San Francisco-based Anchor Distiller Company.
Whatever happens over the longer term, for now, Rudd and Willis are confident enough with their abilities and that of their management team at Berry Bros for the business to remain independent and to prosper for many years yet.
They should also be confident enough to answer those difficult questions about family enterprises if and when they arise at places like Harvard in the future. Because Berry Bros represents one of the best examples of how a family business can prosper for more than just a few generations of ownership. Those businesses looking to navigate a long-term path can learn much from them.