FAMILY OWNERSHIP SPANS 75 YEARS FOR ANDRONICO'S

David Merrefield

How unusual is it that a supermarket company founded by an entrepreneur 75 years ago is still operated by members of the third generation of the founder's family?

Well, like all rhetorical questions, the answer to that is impossible to ascertain, but suffice it to say that much happens to a family-owned business in the course of 75 years. Typically, by the time the second generation of a company concludes its tour of duty, things start to fragment. Many families, at that point, comprise a host of individuals, each with a separate agenda. If the family is lucky, a few of its members will want to operate the business, but they may find themselves competing with a family faction that would prefer to take the money and run. There are many reasons a branch of an owning family might want to cash out. Running retail isn't the easiest way to make money. Also, competitive pressures increase all the time, so some might think it wise to monetize the business while it still has value. So unless the faction that wants to keep the company in the family has the means to buy out the faction that doesn't, selling the business starts to look like the only alternative.

Regardless of how typical this ownership scenario may be, its denouement is not always the sale of the business. Fortunately, that hasn't been the case at Andronico's, the 11-store upscale food purveyor based in Albany, Calif. Andronico's remains under the operation of four members of the founder's family. The business was founded in 1929 by Frank Andronicos. (The final "s" was eventually dropped from the family name.) Andronico's is the subject of a news feature referenced on the front page of this week's SN, written by SN reporter Elliot Zwiebach. The occasion for the attention in SN is to commemorate Andronico's 75th year of operations.

The fact that Andronico's remains in third-generation family hands -- and that the original store in Berkeley, Calif., remains in operation to this day -- is a nice story, but it isn't a situation that's the product of happenstance. To the contrary, it's the product of much early thinking about what must be done to ensure business continuation over the span of many years.

Bill Andronico, the current principal, told SN Andronico's avoided the problem of second-generation dropouts because of his grandfather's foresight: "At the time of the transition from my grandfather to my dad, there was a stock buyback from most of the family members and employees who had an ownership stake, and that made it less complicated over the years."

Even more fortunately, that kind of foresight continued into the next generation. As Bill's father approached retirement a decade or so ago, he shed responsibility and had the wisdom to let Bill ease into running the enterprise.

That's a bit of the story of how one company overcame the odds and remains in family hands, but it says little about why the business itself prospered, as it has, over the years. It happened because the business is currently operated with the kind of foresight and attention that was exhibited by earlier generations. Don't miss this story.