Interview with Marc-Remo Kündig and Sandro Kündig
Many family business stories unfold along similar lines: A determined entrepreneur starts from nothing and through sheer will power and hard work, builds his simple business into a multinational company. The next generation, having grown with the business at the founder’s side, eventually takes the wheel and has to navigate the rapidly changing times, often with varying results. But as the third generation takes over, the company’s fortunes start to nosedive. This generation has only known wealth and luxury and has spent little of their youth learning the important life and business lessons needed to run the company. The end of the story all too often – numerous family owned business do not survive through the third generation.
If it is a story as old as time, it would appear someone forgot to send the script to the Kündig brothers from Zurich, Switzerland. Marc-Remo Kündig and his brother Sandro are third generation business members, under the leadership and mentorship of their father Beat, aren’t just keeping their grandfather’s food ingredient company afloat, they’re steadily steering it through a period of expansion and prosperity.
Formed in 1920 as a grain trading operation by Willy Kündig, The Kündig Group now stands as one of the Europe’s leading raw produce processor, traders and suppliers with subsidiaries in Switzerland, Germany, and Hungary, as well as a branch office in China. They recently opened a brand new state-of-the-art food processing site, specialised in foreign body management (Kündig Food Safety Tower ®) in Germany.
Tharawat Magazine was taken behind the scenes of Kündig’s impressive German facility, and sat down with the two hard-working Kündig brothers to understand more about how they got started, their values, and how they are steadily mapping the next hundred years of the family business.
Marc and Sandro, thank you so much for the tour and for taking time to sit down with us. It seems everyone who gets involved in a family business has a different story of when and how it started for them. How did you first get seriously involved in the family business?
M: After having worked in Marketing and Sales I started working in the Zurich office as an assistant at thirty years old. My father had the idea that you need to work your way up from the bottom. He was adamant that you can’t just start in a management position in a family business. I was an assistant for about a year and I wasn’t very good at it. The problem was I wanted to sell, I wanted to reach out to clients, I wanted to represent the family name. So I started to make my own deals and then I would hand it over to the traders in the company. Of course, my father eventually found out about it and he was like, “This is not the way to go about it, we should probably make you a trader,” so they made me a junior trader. I eventually took over our back then smallest company Biosteril and later also moved on towards building our Marketing and Communication division both of which I am running today for all our subsidiaries.
S: For me, it was a bit different. I finished my studies and I wanted to get experience not only outside of the family business but also in a totally different sector. I was in media for several years, always in sales because that is what I like to do the most. I enjoy talking to people, having fun interacting with them and all that goes with it. Then after doing that for five years, my brother asked me if I could support him in the family company. So I joined in February 2016 and, fortunately for me, I could start directly as a trader and not as an assistant.
This is a beautiful facility and it seems like you have a clear plan for Kündig’s future. As you both represent the third generation of family leadership, can you share with us how the company started and how you got to this point?
M: My grandfather was born in 1896, and started off as a banker in Zürich Switzerland. Back then, being a banker was a safe job and it came with a pension so for the rest of your life, you had the peace of mind that came with financial security. But one day he decided, ‘No I want to work with tangible goods,’ so you can just imagine the shock the family experienced when he announced he was not going to be a banker anymore. He started off at the Swiss hub of the French Port of Sète as a quality controller of grains and then in 1920, he started his own business to trade grains and chemicals. After our grandfather passed away an external manager took over until my father was ready. When my father came in, he had the great idea to create other divisions; to not only trade grains, but also pulses, dry produce, frozen produce and canned goods. He also focussed on trading certified organic produce which proves even more that he had a very good nose for future market demands.
S: Essentially, we’re still a trading company. We trade dry vegetables, herbs and mushrooms, wheat and grains, frozen produce such as berries, fruits and vegetables. But we realised that if we wanted to grow substantially, we needed to grow not only in terms of trading (quantity) but also in terms of processing (quality). Therefore, we bought a processing facility in Germany and integrated vertically along the value chain. Here in our German facilities is where we process dried goods. So we’re actually preparing the whole goods for the industry for big multinationals but also smaller SMEs mainly in Europe.
Any business that undergoes that kind of growth from one generation to the next is sure to go through some growing pains in terms of culture and organisation. What were some of the issues you faced and how did you overcome them?
S: The biggest challenge? For the longest time, we were only 20 people and then, from one day to the next, we were 150 people. Suddenly we needed clear rules and guidelines and this is why Marc implemented the marketing and communication department. It meant a very big change in mindset for us as a family business.
M: When we were only 20 people, my father would say ‘OK today we’re going to change the logo or change the letterhead,’ and he would just shout it out from his office and everybody else would just hear it. Today, he would need to shout very loudly because we have an office in China, an office in Hungry, and the biggest one here in Germany so the communication has been much more difficult. Another significant challenge is that we work in Switzerland and Germany which have essentially the same language but different work cultures. It took us a bit of time to find out how people work in Germany, in Switzerland, in Hungary, and how to effectively set up communication so that everybody understands what we actually mean and how we want to position our brand, our business, and our values.
What lies at the core of this transformation and successful transfer of work culture across borders is our dedication to our values. As Kündig we stand for quality for over a century, now we specify in detail what that means! Today we define our core values as Tradition, Innovation and Sustainability. Tradition includes the values of the honourable business man and represents a great leverage of today’s success. We are convinced traditional values will matter even more in the future. Innovation, because being dedicated to working ahead of the curve with cutting edge technology and optimised value chains is crucial for us to be competitive. Sustainability because as food supplier we understand the gift that our planet is and how much we depend on it.
Another common challenge facing new generations of leadership in a family business is pushback from the old guard who are used to doing things a certain way and may be reluctant to trying new approaches. What was your experience when you first started working with your father?
M: Prejudice against a younger generation is a natural thing. Therefore, the only way to prove yourself is to prove yourself. As a family member probably even more so. It is essential to take away from the fears your employees might have along your career. Especially when you become senior to people who have been in the company longer than you. Today in the company, there is sometimes still a lack of acceptance to innovative approaches but people tend to be supportive when they recognise the added value.
S: One of the most important steps in strengthening the culture is communication between family members, first and foremost. We had to be clear about which way we wanted to go personally and professionally- and how to communicate it within the company. After that we wanted to build on this mentality within our employees. We’re trying to communicate openly with our employees and create a mutually respectful work environment. Another important point is consistency. You will always encounter people who tell you “this is not possible” and the only way to convince them of what is possible is a determined work philosophy that proves itself successful in the long run.
What is the biggest difference in having your last name on the company door vs. someone who is not running a family-owned business?
M: The biggest advantage is the fact that you own the company. This comes with a lot of benefits but yields risks too. Decisions can be taken much faster but fast decision making often bear risks. The understanding that a bad decision could cost you your 100-year-old traditional family business weighs as a great responsibility.
Are there business advantages to running a family-owned business?
S: In sales, I believe it can help a lot. When people see your face and they know that it’s your name on the door, they know that you have skin in the game and therefore care about the company. In some cases this can be a crucial factor to the decision made by the client.
What does the next five to ten years hold in store for Kündig? Will you be investing in technology or R&D?
M: We are doing that; it’s just not called R&D – it’s called my father. He has plenty of cutting-edge ideas and we are the team that focusses in and looks at how we can implement them.
S: When it comes to technology, the sorting and cleaning and steam sterilizing are the areas where we are willing to invest to make sure we are always ahead of the curve. To make sure that we last another 100 years!