Billionaire chicken farmer, racehorse breeder and entrepreneur Bob Ingham has finally put his iconic poultry company on the market, ending 94 years of ownership by the Ingham family.
The move is the second shake-up in just a week within the family business market, after Darrell Lea was placed in administration last week.
Inghams Enterprises has confirmed 81-year-old Ingham, who has kept out of day-to-day management for some time now, has appointed Investec to help sell the company.
“My decision marks the next phase for the successful ongoing development of the company and is one that I, as sole shareholder, have considered for a number of years,” he said in a statement.
The decision marks the end of an era for the iconic company, which could be worth as much as $1.6 billion, and together with rival Baiada controls about 70% of the chicken market in Australia. That market has grown significantly during the past decade, with chicken now the most popular meat in the country.
Inghams Enterprises began in 1918, when Walter Ingham purchased a farm in Sydney for the business. The company started with one rooster and six chooks and only started expanding into a national business in the 1960s under Ingham and his brother Jack. When Jack passed away in 2003, Ingham became the sole shareholder.
There is no doubt the company has become a financial powerhouse. In the past year alone, the company has sold more than $2 billion worth of chickens – making the business a sure takeover target for private equity firms and overseas food businesses.
While much is unknown about the business – Ingham has been notoriously quiet about the company in the past – there is much to be learned from his longevity, management techniques, and position in the market.
Here are three lessons SMEs should take away from Ingham:
1. Jingles – they’re still important
While businesses are slowly moving away from jingles, the catchy tune still represents a fundamental part of advertising. Ingham’s put up a classic with Inghams – Love ‘em, which gave the business a distinctive stamp back in the 1960s.
While the importance of jingles may be dwindling, the relevance of catchy branding remains a universal business truth.
2. Succession planning
One of the most important aspects of running a family business is succession planning. According to family business experts, too few owners think about succession, with family members having to then deal with a raft of business issues once the owner passes away.
Ingham is avoiding that trap. After putting the company into the hands of a management group some time ago, he’s confirmed none of his children have any hand in the business. As a result, he’s selling up.
In fact, The Australian Financial Review reports one source close to the family suggests Ingham wants to keep the family inheritance intact before he passes away – and this is one motivation for selling.
3. Always aim for dominance, if you can
Inghams is a huge company, but as IBISWorld points out in its most recent research, the largest operators are vertically integrated. So while individually they may not have much market share, they are able to grow their own chickens, and then contract out the growing of chickens to other farmers. In short, they own every step of the process.
Baiada Poultry and Inghams control 70% of the market combined, exactly because of this structure.
This is a good lesson for other businesses – you may not need individual market share. If you just happen to control some critical elements of the supply chain, then your dominance can grow.