In this episode of Beyond Succession, host Leah Tolton is joined by Partner and Head of the Agribusiness Industry Team at Bennett Jones, Lorelei Graham, as they delve into the rich legacy and promising future of Canadian agricultural family enterprises. From household names like McCain and Weston to the community-driven farms that anchor our local economies, these businesses are living legacies with deep roots in the land and the hearts of their communities.
This episode explores the resilience and adaptability that have allowed these enterprises to flourish across generations. Leah and Lorelei discuss the role of innovation, from sustainable farming practices to the integration of artificial intelligence, in shaping their future. Additionally, they tackle the challenges of succession planning within multi-generational businesses and the importance of maintaining trust, transparency and strong community ties.
Tune in to discover how these family-owned agricultural businesses continue to thrive in a rapidly changing world.
Transcript
Lorelei Graham: [00:00:00] You know we put a lot of faith and trust in the agricultural and food industry in Canada so there has to be that trust and transparency. So I think when AI is being adopted it has to have sort of that lens over it to make sure that the stakeholders the family farms the people who've been in business for hundreds of years are feeling confident.
Leah Tolton: [00:00:27] Welcome to Beyond Succession. A podcast series within the Bennett Jones Business Law Talks podcast that discusses topics around navigating the complexities of the family enterprise. I'm Leah Tolton partner at Bennett Jones LLP and I'm a family enterprise and corporate lawyer. Passionate about helping family enterprise businesses navigate the complexities of governance succession and growth.
Before we begin this podcast please note that anything said or discussed on this podcast does not constitute legal advice. Always seek proper advice from your legal advisor as every situation is different and outcomes can vary. In this new season of Beyond Succession I'll be exploring the unique history and development of family enterprises within the agricultural industry in Canada.
We'll dive deep into the stories behind some of the nation's largest and most influential agricultural brands like McCain Westin Saputo and Burnbrae. Many of which you've probably purchased from the grocery store. I want to uncover how family enterprises in agriculture including these large brands have successfully managed generational continuity succession planning business growth strategies and philanthropy efforts.
In addition I'd like to explore how these family enterprises are adapting to today's challenges in agriculture and making innovative contributions to help evolve the industry. Joining me today is my colleague Lorelei Graham partner and head of the agribusiness industry team here at Bennett Jones. I'm excited to have Lorelei join me as she has significant experience in agribusiness especially in intellectual property law.
She has assisted countless clients in the food and agribusiness sector and her practice manages IP portfolios on an international level for a wide variety of clients in a variety of disciplines including mechanical biomechanical and agricultural food industry and environmental areas. Welcome to the podcast Lorelei.
Lorelei Graham: [00:02:44] Thanks so much Leah. I'm so excited to be here and to talk about my great passion for ag. So thanks again for having me.
Leah Tolton: [00:02:47] Well great. Let's get started then. When I think about a family enterprise you know I think of an organization that may include an operating company. It may include a company that may own some real estate it may have some investments other than the operating company might have some assets some people are going to inherit might have some philanthropic interests and obviously it has people that operate all of those components.
What is significant about family enterprises in the Canadian agriculture industry?
Lorelei Graham: [00:03:24] Well I think you've you've sort of got a great broad brushstroke of all the amazing things that sort of touch on a family enterprise business in the agricultural sector. And I think sort of the most impressive thing is sort of the impact that these family enterprises in the ag space actually play on our Canadian economy.
I think it's amazing to see how they range from the very small local farm to these very very large corporations some of which you've mentioned earlier and that they often span sort of multiple generations. And typically we're seeing huge sort of family involvement. It's not just one family member.
We have lots of different generations working within that enterprise. And that creates both you know incredible opportunities. But it also creates some challenges right? So I do think it's a little bit different maybe from some of the other industry sectors that you've spoken about and are involved in.
And it has lots of interesting ties to our land and to Canada as a whole. And I think that's important to remember. We're such a large country with very diverse interests and ag interests right? So it is very interesting that way. I also think it's interesting because these family enterprises you know like how did how did they you know what were some of those challenges that sort of led them forward and and to have this big presence in Canada because they're resilient.
And you hear right they're they're often resilient that that despite all these sort of ups and downs of the economy or ups and downs from challenges like in the typical sort of you know environmental world that we're living in now they continue sort of to to move forward. So I think it's their adaptability also and their resilience that sort of makes them unique and why I'm glad we're here talking about it today to be honest with you.
Leah Tolton: [00:05:20] So then do you think it's the adaptability and the resilience that's been important? You know throughout their history like is that key to the evolution of these enterprises over time? I think so.
Lorelei Graham: [00:05:32] I mean and I'm sure we'll delve into a little bit more but there's all kinds of challenges when you're sort of transitioning businesses from one generation to the next.
And so that's I'm saying it's not just about you know how do we whether a bad year on the farm it's a lot more about economy you know that's affecting people buying our groceries or what have you it can be a lot more. So I do think these family enterprises well they have to sort of address those challenges and be adaptable and be resilient.
They also allow us to create a buffer right? If you think about that like when you have that ability to sort of pivot whenever you need to that creates a buffer for our economy. And that's where the Canadian economy is I think benefited greatly from these Canadian family enterprises.
Leah Tolton: [00:06:19] You know you referred to some of the challenges that exist in these enterprises when you have multiple generations working in some of these businesses and you you've talked about how in these types of enterprises it's not uncommon actually to see multiple members of multiple generations to be operating there.
What kind of common challenges and successes do family owned agricultural businesses face when they transition from one generation to the next?
Lorelei Graham: [00:06:48] Well I think I'll look at this sort of both from the challenge and also how they've had some successes because I'm I'm very much like you know we want to talk about the negative but also the positive and there's so many positives.
So I think on the challenges side obviously succession planning and a little bit out of my bailiwick but succession planning is obviously uh has been a challenge for the family enterprise in the ag space. It can be complex right? You think about the challenges of the world and this is where also I think our geography plays into it.
You know when people are in isolated communities farming versus you know if they're in sort of a more populated area can you keep your kids safe? your kids on the farm or can you you know are you are you struck to be doing it alone in the future? So I do think there is finding this is sort of the suitable successor shall we say can be complex and so those family dynamics I think the ones that can navigate that can be very successful.
I think uh it also requires having people engaged in the space that you're in whatever that ag business is right? Whether it's crop management or livestock care or maybe it's in food production and sort of developing products for the next generation all those things sort of play into keeping people engaged in the family business and having successors to the business as the family grows.
I think also ag is different from sort of some of these other sort of family enterprises in that there's often like an emotional attachment to the farm or to the business. It doesn't and I use the term I keep saying farm but it could really be anything you know we get attached to things uh whether it be the land or maybe the animals or the legacy right?
If you have a legacy that's you know you'll often see the designation for century farms or businesses that have been around for over a hundred years that have been attached to the family name and we might talk about that a bit later how the name means a lot to people and what does that legacy mean?
So the attachment the emotional attachment is sort of unique. I think a bit in in the ag space and you know it's not to say that in other industry areas you know with family businesses that have been gone on a long time that that isn't important to them. But I do think sometimes you know when you have the emotional connection to a piece of land that or a farm that's been in your family for generations that that can play a part.
I think also the financial aspect is always something we have to consider um you know transferring assets and all that good stuff is sometimes complicated with families as we all know. I think we have all experienced that when you have a complex family. Business especially some of the big large family um enterprise operations we have operating like the Westin's and the McCain's Saputo's all of those you know when you get to that level and stage there's obviously transferring assets can be complicated to say.
I come back to being the personality to be able to weather adoption and whether the adaption that you might have to have to be able to do that adoption of new ideas and new things that can be challenging for families as they're transitioning uh you know the older generation versus the younger generation is is always a consideration.
And you know unfortunately there's always maybe some conflict there and how are you going to resolve that conflict? And I think that's that's something to consider in any sort of family enterprise. You know how are you going to manage that transition peacefully and positively? Um and sure there's always legal and and you know the the proverbial tax implications of transitioning but that that's beyond my my sweet spot.
But I do think you know to sort of discuss briefly about sort of the successes or the positives of transition. I think you know going back to legacy and building that brand that means a lot to people and in the in the agricultural space when you pass something down especially land to your you know it could be your children your grandchildren your great grandchildren some places I think that is incredible.
Maintaining that identity that business identity intertwined with your brand. Personal successes is a wonderful thing. And I think we have lots of great examples in Canada about that. I think um it also is that continuity in the Canadian landscape and the ag is is really profound in some ways. Um you know it it's what sort of also makes us Canadian given the size of our country and and how these families have sort of I'm going to say gone from east to west or west to east whichever way you want to talk about it how they've managed to actually navigate that large geography and do it successfully.
And on a global scale in a lot of cases is pretty impressive. Obviously you know we've also you know I I can't be talking here without being an IP lawyer and say something about innovation. Obviously I think innovation is critical. You know when you're transitioning those new generations bring a lot of interesting things.
Uh we're seeing that in the AI space and how you know AI is coming to the farm or or to your business or your grocery store near you. And I I also think uh community impact. And you mentioned that a bit with philanthropic ideas. And you know I have my thoughts on that. But um that really also impacts a lot on just in general whether it's philanthropic or not how a family or uh enterprise engages in the community.
As I mentioned there's all kinds of farming communities you know rural really rural and you know close to home in a city. But the reality is is that they also bring a sense of community whether it's farmers markets or people engaging uh and learning about where their eggs come from on the side of a truck transport truck coming along the road or whatever.
Like those are those things where you know our food where we break bread every day with our family or if you're gluten free a rice cake or whatever. The reality is it's a big part of our day to day. Um for some maybe more than others but the reality is it's a big part of our day to day.
So I do think that those sort of the successes and the challenges of transitioning in the ag space sort of come to mind.
Leah Tolton: [00:13:03] So so there's a lot to unpack there. You know you've you've brought up a lot of no no no no no no I want to hear all about this. And um you know so I think you know there are a number of things that you've raised there that I think would be interesting to explore a bit further.
And I know you know as you've mentioned that your particular passion is in innovation and in intellectual property and you know those related concepts. In the family enterprise space you know from my window I often see that one of the struggles or challenges or perhaps rites of passage that needs to or often needs to occur in these family enterprises is that in connection with generational succession is that often the new generation the rising generation is the one that comes at the business and the the operation of the business in a new and different way. That's not always easy for the first generation or the existing generation to accept but you often see these new ideas coming from the new folks who are coming behind the people who've been running the show for a while.
And so you know that's that's a theme that you know I see in the corporate world that can cause some issues to work through. Let's put it that way. And so obviously this is something really important to you and really important to your practice. You know maybe you could speak to how family owned businesses contribute to innovation in the agriculture space.
You know what do you see happening here? Is it a generational thing? Is it a thing that you see across the enterprise? How does that usually play out?
Lorelei Graham: [00:14:37] So I think I'd want to talk about it in sort of sort of three buckets because from innovation comes things like you know how does the farm navigate AI which is on everybody's mind lately.
So I think it's important to address that. I think it's important to sort of talk about what do we mean when we talk about innovation. And then I also think it's important to understand how innovation whether you adopt it or not adopted and how you adopt it impacts sort of the family. And the enterprise and their reputation.
And that all comes I hate to say it from my IP background but you know whether it's trademarks and branding and how we manage that to whether or not we're protecting something by a patent or what have you or or adopting an innovation. Those are all sort of the three things that sort of intertwine and interweave and sort of to the fabric of how family enterprises in the ag space sort of adopt this.
And I would say like from an inner from a pure innovation if you go back to that basic question what does innovation mean? I think I think it can mean a lot of things in the ag practice. Like certainly from a legal perspective we think about you know protecting you know confidential information data innovative ideas things like that.
And those all are on in a in the agricultural sector for sure in Canada. But certainly sort of for the I'd say for the last 50 years and I've been practicing 30 of those 50 years which I'm embarrassed to say was true the adoption of ag innovation is still slow. And unfortunately in Canada we're probably you know people who know me know I go on about this but we're slower to adopt.
I certainly think there's more of a spotlight on it right now which I think is great for innovation but purely on how how it sort of impacts a family enterprise and in particular a farm is I think we have to think about innovation as being things like sustainable farming practices. In other words it doesn't have to be.
As I said you know adopting an AI specific innovation or your business is going to all of a sudden be sort of an AI focus. It just more means how we can sort of change our farming practices or our business practices within the family enterprise. So I think you know sustainable farming practice is one specifically for the farm community.
Um a lot of you know Canadian Ag farms are doing that. Burnbrae is a really good example of that. I think it has a whole bunch of uh sustainability initiatives. For instance they have energy efficient egg grading operations and waste reduction programs. Those kinds of innovations whether they're you know proprietary or not is another question.
But you're seeing that you know like everybody’s looking to do be more efficient have better you know returns all that good stuff. So sustainable farming practices are certainly one aspect of innovation. Obviously as I said technology advancements are a huge one right now and that are AI enabled.
Everything from figuring out on sort of what I call crop management and how your your inputs and whether or not you're using sort of I'm going to say uh technology assisted programming or or you know smart data collection all that good stuff falls into that bucket. And you know it could be drone technology that you've all of a sudden decided to adopt to sort of review your crops especially in some of the more rural areas is another one that we're seeing a lot more drones.
I actually do have positive influence. Things are not always a negative. They're not always an attack somewhere but you know everything also from innovative products. Like you look at the large companies like a McCain's for instance that have they've been at the forefront of innovative products managed to scale that take it out of Canada take it globally they've been incredibly.
Effective that way. And then also like a lot of these farms and this is what I love about Canada. We give back and we are involved in trials involved in testing and we should do more of that always but because we have such a diverse geography we're actually really I think primed to do a good job of that.
And especially with climate change and things you're going to see more of that and getting so there's they're involved in research and development. So even though it may not result in something you're going to see on every farm there's aspects to that where I think family business and ag have really made a big difference.
And finally I think too innovation sort of gets down to community engagement right? Uh they're a big part of the community and that innovation spreading big believer in education and spreading that sort of education and knowledge on innovation out into the community they're a great conduit for that.
So I think that's important as well. So that's sort of uh I think on the innovation side now do you know when we talk about sort of the hardcore if I was to drill down on some of those buckets that really are impacting uh I would say the Canadian uh family ag business area I would say obviously AI has had a huge impact.
And there's some challenges right? Like I think we all know that I think everyone is having challenges with AI but the reality is there's some barriers to adoption and then there's some ways to overcome that. And once again looking at it sort of from a glass half full perspective I would say that um one of the biggest ones is making sure people are ready and understand right? Once again education. Uh so many I would say farmers and and agri food businesses are not really fully aware yet of the potential that AI can have and how it can be integrated I would say successfully. All this comes down to is education. As I've said it's all about taking the time and that's hard right?
When you're you know anybody it's hard because you're busy and and what have you but getting down to sort of how we can make a difference in how the younger generation impacts the older generation. And it's all about sharing that knowledge and education. So you have to you have to find somebody who can bridge that gap.
Leah Tolton: [00:20:34] And sort of have it available to like you using your kids as tech support.
Lorelei Graham: [00:20:37] I've been known to do that. So uh guilty as charged is guilty as charged. I think the other thing that's really a struggle right now in this area just an Ag in general but it impacts obviously family businesses. It's sort of the available data uh in this space and sort of the quality of the data. I would say on the whole and hopefully I don't offend anyone by saying that especially in the farming community there and rightly so they want to have transparency about where their data is going and how it's being used.
Leah Tolton: [00:21:05] Yeah.
Lorelei Graham: [00:21:05] And um they've been slower to maybe share and that's okay.
I think it comes down to encouraging uh sharing and education incentives. He sure people understand sort of the privacy around it and and making sure we're preserving that privacy and. Having the people who are developing these tools really understand the farmers or the the the stakeholders concerns which I think they're getting there but we still have we have a way to go.
I think so much of the ag community and and the food area is based on trust whether we're talking food and and food security people want to be able to trust where their food comes from. You know we put a lot of faith and trust in the agricultural and food industry in Canada. So there has to be that trust and transparency.
So I think when AI is being adopted it has to have sort of that lens over it where this is a little bit different. Maybe it should always be this way but I can certainly speak for ag. It does require that sort of level of transparency and trust to make sure that the stakeholders the family farms the people who've been in business for hundreds of years are feeling confident.
And I think that once again comes down to education and sort of. Understanding the science. So getting back to to who's you know who in the business is doing what. And sometimes we encourage people to have designated tech uh you know tech ambassadors right. To try and get farm adaptation of AI to happen or just technology and in the ag space being adopted at a at a faster rate uh really requires somebody in the business to take on that mantle and take on that cross to bear which is sometimes hard to convince.
Not everybody wants to do that.
Leah Tolton: [00:22:47] So you know you made a comment earlier about legacy and you you you commented about how important legacy is you know are some of the things that you're talking about here related to legacy? Are they related to public image and brand reputation and that kind of thing?
And so is this something that family enterprises in the agricultural space are particularly concerned about managing?
Lorelei Graham: [00:23:11] Yes and I think they you know in one word they have to do it very carefully right? There's a lot at stake. And I come back to the subject matter. What is ag about? They're managing food which we all consume and rely on right?
So their legacy in some ways. It's not you know we all have to you know we all go to the grocery store. We all you know ingest the food that's grown around us hopefully. And so legacy to these family operations and their brand reputation is everything in my mind. And there's some unique sort of advantages I think and challenges.
Uh when managing sort of that public image and brand reputation these enterprises these family enterprises have such a rich history. They have a strong connection to the land. Uh or the food industry depending and so that authenticity I think really resonates uh with consumers And I think also you know consumers appreciate hearing where you know that that continuity and commitment They want to hear that their food and and and sort of supply chain of essential nutrients is being looked after.
And there's this that when you have generations of the sort of that family stewardship I think that builds on that legacy and reputation. I think people also you know another advantage is is that personal connection when people get on the television or their commercials where they're talking about you know their their egg farm or their cattle you know their beef production or whatever it happens to be grain.
That I think resonates with people and it fosters trust. And I think we as a whole in Canada like to back that. I think it's a Canadian thing. And I also think that it ties a little bit back into community engagement. So when there's any sort of I'm going to say risk to that brand reputation then you know that's serious right?
So so obviously you want to I think family enterprises sort of have a higher risk when it comes to this I think they have to you know whether it's a conflict that a family is having that becomes public or any kind of I hate to say scandal that can tarnish the brand. I think it it is much more damaging than if it's just you know ABC.co it's it's it's a lot more personal.
That's why I think you know if you can mitigate that sort of with always clear communications having conflict resolutions depending on the size of the family enterprise. Some of the more sophisticated ones obviously have that but even within smaller businesses family enterprise businesses you can sort of have sort of that mediator the the person who's who everyone goes to to sort of sort this out I think that's good.
Obviously succession planning if there's any issues around selection planning and not in my area but that is key right? If it can really affect. I would say brand reputation the family name and I think also coming back to my discussion on innovation sort of balancing sort of tradition and innovation.
How do you how do you manage that? How do you show that a brand or a legacy brand that's always going supplied x to the consumer and the consumer knows that is maybe pivoting or diversifying into something else you know do we want a company that we trust to provide us with x start you know making running shoes I don't know maybe I don't know but the point is that we want to think about that and where their labor where are they hiring their labor all those things if different things.
So I think they have to be very thoughtful in their decision making and you know having that sort of good governance model as you grow a family enterprise I think is also critical. But I do think it also is sort of one of those situations where when you think about your family legacy and how you want the public to perceive how do you want to pass that on to the next generation.
If you keep that in your mind you're going to make some good decisions.
Leah Tolton: [00:27:09] You mentioned in your earlier remarks how it can be important to some of these family enterprises to give back to those people who who gave them that trust and who trusted their brand and who've helped them build that legacy and who've been loyal to them throughout their time as they built their family enterprise.
And you indicated that one thing that you sometimes see in these family enterprises is that they demonstrate trust. Appreciation for that ongoing trust by making investments in philanthropy you know can you speak maybe to role philanthropy can play in these enterprises and how some of these families have chosen to give back to that community and the impact that has on their brand and their business and their legacy?
Lorelei Graham: [00:27:55] That approach to your business is wide ranging whether it's community at a smaller level the local community and giving back you know whether to a local food bank or going all the way up into companies like the McCain's or the Weston's and how you want to give back and starting you know significant foundations that and and the Weston's is a good one in the sense they currently have one the Weston Family Farm Foundation and with how it relates.
To ag that part of the foundation that relates to ag is a homegrown innovation and it's like 33 million dollars towards trying to find a sustainable production of fruits and vegetables in Canada. So like that's a significant obviously not everybody is doing that significant commitment but the reality is they're doing that to give back.
And so I think there's a commitment by these families whether it's small or large uh to the well being of Canadians and what they're doing and what they're providing for Canada. So I do think there's that part of it and I think it comes from the subject matter we're dealing with. We're dealing with the land we're dealing with food we're dealing with things that everybody everyday needs.
I think sometimes too it can be rooted in sort of uh I'm going to say the cultural background potentially like you can have that. There are certain farms that have been around for a long time. It's just part of who they are. I think too there's an economic side to it whether we like to talk about it or not.
But I think the long-term aspect of it is that it really helps the business to to grow. solidify and I think it gives it a vehicle to communicate their values their beliefs of you know what they can do for the community. I think it also can engage it can help within the family itself because most families want to give back I think and it also encourages and teaches the younger generation that that's part of sort of the mantle that they're going to have to wear.
And I think too you know it's important always if they're doing this that there's an alignment between what are their values and what is the foundation. It can get off kilter. And this is sort of where I come back to the governance comment too. I think that comes out during governance discussions of sounds such a legal word.
Leah Tolton: [00:30:18] It can be a discussion around the table in the kitchen. Even exactly you know I just I define governance as communication of information so you can make decisions.
Lorelei Graham: [00:30:25] And so that's why I think it definitely goes beyond financial contributions. It's really about it shapes sort of the the legacy the brand identity.
I think it shapes community relationships and sort of what I would call sort of the long term and generational impact of a of a business. And that's where once again this particular industry of agriculture really is a bit different from a lot of other ones. It has a lot more staying power than a lot of other industries that have family operations or family enterprises and operations. I'm not saying that they can't last a hundred years but you know it's it's a different world.
Leah Tolton: [00:31:03] But also people will always need to consume the products they produce right? There's no change to that. People will always need to eat. We will always need to have producers of food and a reliable food supply.
And you know so in that sense you know you will this is really timeless in terms of the need for it.
Lorelei Graham: [00:31:22] And that's why when you think about where family enterprise and the ag space has has grown over the history of Canada it started on these farms right? And it's and it's kept growing. I mean that's where where it's come from.
McCain's is a great example of that. So like you just have to you know there there's lots of and I say that because like when I drive home and and I live on a farm all the century farms around me. They've been going now they're getting to more like 150 years but my point is is that there there is a lot of continuity because it they're producing something that everybody needs.
Leah Tolton: [00:31:58] Right.
Lorelei Graham: [00:31:58] So wherever you plug in on what I call the agribusiness value change whether it's from the very beginning to the very end in your supermarket from planting or you know farm to fork whatever you want to call it. The reality is there are family enterprises integrating all along that value chain.
And they can last the or go the distance uh and be passed down if there's interest I think planning all that good stuff.
Leah Tolton: [00:32:26] Well and we would obviously be happy to assist with that. Obviously. Lorelei you just offered so much here for us to think about. I so appreciate you taking the time and offering your thoughts on this.
It is obviously a lot to think about and consider and a lot of real relevance to real people's lives on a daily basis to everything you've said today and really do appreciate you taking the time to appear on the podcast and to share your thoughts with us today.
Thanks for joining me on this episode of Beyond Succession a series within the Bennett Jones Business Law Talks podcast. Make sure to hit the follow button on whatever platform you are listening from so you get notified whenever we release new episodes. Also don't hesitate to reach out if you have any questions about challenges or issues that you're facing in your family enterprise.
Take care. I'll catch you in our next episode.
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