Left to right: David Scholtens, his father Jack and brother Zachary in the retail store of their candy packaging and distribution facility Scholtens Inc. in Burlington, Ont.Kenneth Chou
In 2000, it looked like the Scholtens family’s three-generation legacy in the candy business might end.
Jack Scholtens, then 50, was working alongside five of his nine siblings at Triple-C Imports, their national distribution company headquartered in Burlington, Ont., outside Hamilton. With 56 members in the next generation, they decided to sell the business to a U.S. potato chip enterprise because it wasn’t clear how Triple-C should be passed on within the family.
“We liquidated the company because we, as shareholders of the company, couldn’t agree on a path forward,” Jack says.
But he didn’t feel done working in the industry. Three years later, he and his wife Cathy used their portion of the sale proceeds to buy Cottage Country Candies, a packaging plant in nearby Grimsby that had been one of the Scholtens’ suppliers.
They moved the facility to Burlington in 2011 but kept the Cottage Country name, which became the flagship brand under Jack’s resurrected candy importing, packaging and distribution company, which he called Scholtens Inc.
Jack wanted to continue the legacy that started in the Netherlands in 1910, when his father Peter married into a family that was in the candy business. Peter began selling licorice door-to-door by horse cart and eventually broke off on his own. After hanging on through two world wars, the family and its business moved to Burlington in 1958.
Once in Ontario, Peter “started pedalling candy from a small, little van which, during the week, was his work truck, and during the weekends and on Sunday was how we got to church,” Jack says.
At first, Peter sold what the family calls “homesick candy” – Dutch licorice and “church peppermint.” As his children joined the business, they added sales trucks and shifted to gummies and sours, which appealed more to the Ontario market.
Scholtens Inc. has seven distribution centres across Canada serving 20,000 locations, mostly convenience stores, and employs 75 people.Kenneth Chou
After Peter retired, Jack and his siblings “needed some elbow room,” so various brothers opened new locations in Montreal, Calgary and Vancouver. They ran Triple-C with a flat management structure; each sibling took a turn at the president position through the years before they ultimately sold it.
When Jack revived the family legacy by buying Cottage Country in 2003, he assigned his six kids many of the jobs. By being reliable and fair, he established trust with a wide network of convenience stores throughout Ontario that sold the brand’s products, he says.
In 2015, Jack and Cathy faced another succession dilemma as they considered how to equitably keep the business within the family when not all their children were interested in running it. Under the guidance of consultancy Christian Stewardship Services, they offered to sell Scholtens Inc. to their sons David and Zachary, who were the kids most involved in the enterprise.
David had worked there full-time primarily in sales and business development since finishing high school in 2003, with Zachary joining six years later. David remembers initially being shocked that his parents were proposing a financial transaction instead of simply handing over the company. He recalls his response: “I said, ‘Buy it? I built the whole place. This is crazy.’”
In retrospect, however, David now sees the wisdom behind the sale, noting that giving only two children a huge asset would have likely caused hard feelings among their siblings.
“Looking back, I think to myself, ‘Wow, that was really good that Mom and Dad engaged a professional to do that.’ Otherwise, things could have gone completely sideways,” David, 38, says, adding that having a third party to mediate and document every meeting over years of planning was key to keeping the peace.
Julia Chung, a family enterprise advisor and CEO of financial consultancy Spring Plans in South Surrey, B.C., notes that many baby boomer entrepreneurs are currently contemplating succession. Two generations of the Scholtens family illustrate just a couple of the ways to hand off a business.
Some families have the misconception that “the only way to achieve family harmony is to remove the business” by selling to an outsider, as the third-generation Scholtens did, Ms. Chung says, “but that could create some missed opportunities.”
David was initially shocked that his parents offered to sell Scholtens Inc. to him and his brother instead of simply handing over the company. In retrospect, however, he appreciates that a sale was the best way to preserve harmony amongst him and his five siblings.Kenneth Chou
Transitioning an enterprise to a relative can be “technically difficult and emotionally complex,” she adds. “However, this hard work often builds greater strength.”
Jack found succession particularly “painful” when it came to giving up decision-making power. He wasn’t quite ready to step back when he did, but knew that his kids were ready for more responsibility, he says.
“Your kids get to a certain age where they’re biting at the bit, and if you don’t move out of the way, you stifle them,” he says. “It was difficult because at one time all the fingerprints on this business were mine, and when you sell the business, those fingerprints get erased and your sons have their own fingerprints.”
David describes the years after the sale up until 2023, when he and Zachary took over the titles of CEO and chief operating officer, respectively, as a “daily momentum shift.” When it came to the top-level responsibilities, his father “slowly did less and I slowly did more,” David says.
Jack, now 75, remains part of the operation with a seat on the company’s advisory council.
Since assuming the leadership, the brothers have been working to make the Scholtens’ candy legacy nationwide again, expanding its reach from Ontario-wide to seven distribution centres across Canada and employing 75 people. Their products come largely from Canadian manufacturers, as well as Europe and the United States. Scholtens also packages and distributes candy for other companies.
Its products are now available at 20,000 locations, largely convenience stores, but also through retailer Giant Tiger and hardware store chain Princess Auto. It’s testing markets in Ohio and Texas with a look to move further into the United States.
Jack says he’s proud to be a third-generation “candy man” and to see the enterprise’s continued success. “My sons are fourth-generation candy people and, yes, we do have grandchildren working in the business who are fifth-generation candy people.”
Have a suggestion of a Canadian multigenerational family business for this regular series? E-mail smallbiz@globeandmail.com.