At a glance
- Coronilla successfully transformed itself from being a local pasta manufacturer to a global health food player
- At the heart of the company’s successful pivot was a new purpose: to put social and environmental issues at the fore
- As a family business, a key to ensuring smooth successions to younger generations was to refresh and formalize governance processes
- Coronilla’s family owners put in place a unique and innovative model for issuing shares that allows a dynamic rebalancing of the share structure
Coronilla is one of the world’s premier producers of gluten-free pastas and snacks. It was a pioneer in using quinoa, a grain cultivated in the Andes mountains since the time of the Inca Empire, in health foods designed for people with gluten intolerance and celiac disease.
The road to success has been full of twists and turns for this South American family business, however. Coronilla underwent several transformations to survive the economic and political turbulence of its home country of Bolivia. Its most dramatic shift has been reinventing itself as a purpose-driven, Fair Trade producer that puts social and environmental issues at the heart of its endeavors.
The broader issue
There are both advantages and disadvantages to being a family business. On the plus side, family businesses are more likely to embrace a long-term vision of success. They are more financially conservative and therefore better able to weather the booms and busts of economic cycles. On the minus side, they must contend with the intricacies of three overlapping areas: family, business and ownership. They must also balance the harmony-seeking interests of the family with the market’s performance-based demands. For the founder, this is a simple matter since the entrepreneur makes all the decisions. However, as the second and third generations of the family take the reins of the business, a more sophisticated governance must be put in place. Families must engage in frank and open discussions over the fundamental values of the company if they wish to replicate and preserve its DNA for the future. Over time, we see a varied typology of shareholders emerge: some family members remain actively engaged in running the business, some are interested and involved shareholders, and some see it merely as a source of dividends.