David Ganong confesses to having a sweet tooth - but that's a good thing for someone whose corner office is on One Chocolate Drive, a bonbon's throw from a chocolate factory.

Ganong is president of Ganong Bros., which has been catering to Canada's sweet-tooth market for 137 years. As the fourth generation of Ganongs to head the company, David Ganong seems bent on ensuring that Canada's oldest candy company and chocolatier flourishes for another 137 years or so.

Ganong's business interests have transcended the family business - he was formerly chairman of Clarica Life Insurance Co. and a director of Air Canada - but his lifelong passion has been the candy business that has been a mainstay in St. Stephen, N.B., since the company was founded by brothers James and Gilbert Ganong.

Ganong has been president of Ganong Bros. since succeeding his uncle, Whidden Ganong, in 1977, and has spent four decades in the fabled family business. His dedication to his company and community culminated recently when he became a recipient of the Order of Canada, the country's highest honour for lifetime achievement.

Brennan O'Connor, Business Edge
Ganong Bros. president David Ganong, who recently became a recipient of the Order of Canada, has a new fruit-filled chocolate treat on the market.

1. What are your most vivid memories of growing up in your family's candy business?

"There used to be an apple orchard right beside the candy factory. My father (Phillip Ganong, a one-time vice-president of Ganong Bros.) would have shot me for this, but I can remember going down in the fall and we would pick the apples off the tree, throw them up into the candy room, drop them into the caramel and then throw them back down. I was probably six or seven then. I always had a strong connection to the factory. I can remember as a kid going down to the factory with my grandfather (then-president Arthur Ganong) in the evenings in the fall when people were working overtime to get ready for Christmas. He'd say hello to people, encourage them with their overtime and night work. That's one of the early memories I always cherished."

2. When did you start working in the family business?

"While I was at university, I worked three university summers in the factory. Generally, I was a labourer. I unloaded carloads of sugar bags, did some of the miserable jobs and made a little bit of candy. I kind of started at the bottom, which gave me a particularly interesting perspective on the business. Then, I went to work for DuPont of Canada in Montreal and Toronto. I was there for less than a year. After that, I went into the chocolate business (with Ganong Bros.) for something less than three years, mainly in sales and marketing. I also worked with Molson Breweries in Toronto for a time."

3. Who has been your most important mentor?

"It would be my Uncle Whidden (Ganong president from 1957-1977). I worked very closely with him before succeeding him. Another mentor was Rowland Frazee, who was the president and CEO of the Royal Bank of Canada. He came on to our board of directors with Ganong and went on to become chairman of Ganong, so I had an opportunity to work very closely with him for a long period of time."

4. Did you always aspire to work in the family business or did you have other career aspirations?

"It just evolved. I don't think it was a predetermination in my mind. After I went to work for DuPont, it was Whidden who kind of enticed me to come back. He felt trying to maintain some family connections in the business was important and he wanted to strengthen the management team with some younger blood. To get me back, he finally got around to paying me a competitive wage. I came out of UNB (University of New Brunswick) with a very large student loan. So I had some financial requirements that were necessary and I did have some discussions with him about that. At that stage, they just weren't paying $100 a week, which was what the going rate for a university grad was in those days, and DuPont was paying that. Whidden had no children and it was important to have someone from my generation get involved in the business. While I was working for Molson, Whidden took the marketing management course (at the University of Western Ontario) so he could talk to his new marketing guy (David Ganong). He showed commitment to change, he showed commitment to try and modernize the company, and also to understand things that weren't necessarily his long suit, such as marketing."

5. How did your Uncle Whidden influence your career?

"Two things come to mind when I think of my uncle's influence. The first was his commitment to employees and community. He lived a chunk of his life trying to make sure that the company was successful in the community and that it was fair to its employees. I think that commitment to community and employees is one of the takeaways I have from Uncle Whidden. The second thing I got from Whidden was the emphasis on quality. He was a stickler with his product. His product had to be good. He pushed hard for that and when I took over as president, some of the most difficult times were probably when he came wandering up from the plant floor with something he thought was unsatisfactory from our production."

Brennan O'Connor, Business Edge
David Ganong has come a long way since his days as a kid making candy apples at the Ganong Bros. factory.

6. When you started working full time for Ganong in 1966, did you expect that you would succeed your uncle at the helm?

"Well, Whidden was an individual who always kept things close to his own chest. He was a man who took his own counsel. So it was never clear as to what he was thinking about as far as succession or whether he would ever step down from his role. It wasn't clear what he was going to do with his ownership, either. I worked for seven years in sales and marketing out of a Toronto office. Then, I moved back to St. Stephen (head office) and within a year of that move, he decided to step down as president."

7. How did the company look the day you became president?

"We were just beginning to come into the modern world of sales and marketing, if you will, at that time. At that stage, our retail customers in Canada were becoming big chains, as opposed to independents. Major chains like K-Mart and Woolco were taking a higher proportion of our business. So we had to reshape our business to move from a small Canadian company exporting to the rest of Canada to one that could service a Woolco or a K-Mart in Calgary, for example, as well as one in Saint John. So we spent a couple of decades of hammering it out, building our brands and putting a sales force in Ontario to strengthen our distribution. In 1999, we abandoned our old factory and went to a brand-new facility that we designed and built just on the outskirts of St. Stephen."

8. Was the company ever in danger of folding?

"Absolutely. Oh yeah. More than once. We had a real challenge with the company in the early seventies. That was partly driven by family discord at the same time as a very, very high price for sugar. Sugar was going through the roof, we needed financing and family discord made it very difficult to deal with the banks. So it came down to a Friday afternoon where we had to solve some problems by Monday morning.

"I was not in senior management at that time, but I was involved in the business end of the dialogues that took place. Things worked out. Later on, we went through a bit of a choppy patch in the mid-1990s although I don't think our existence was necessarily threatened. We had to make some serious strategic realignments. We'd blown our brains out in the U.S. market, where we didn't have much success. We were trying to be all things to all people and we had to go through a process of rationalization in dealing with our competencies and things of that nature. If we hadn't taken that fairly aggressive step, I suspect we may not have made it into this century."

9. How difficult is it running a family business?

"It created a lot of difficulties for us at one time. My view on that matter is that I don't believe family members should own shares in Ganong unless they're active in the management structure of the business at a senior level.

That's the way it is now. I own about 90 per cent of the company and the other 10 per cent is owned by management, and my children (Bryana, manager of industrial, customer products and private label; and Nicholas, a plant supervisor), who are active in the business, have relatively few shares."

10. How do you reflect on the long history of Ganong and the entrepreneurial spirit that has kept the company around for so long?

"It certainly was very entrepreneurial, with things like the invention of the chocolate bar (Arthur Ganong and George Ensor marketed the first nickel chocolate bar) and the creation of the chickenbone (a cinnamon-flavoured pink candy jacket over a chocolate centre). We were the first company to print on the bottom of chocolates, the first to use cellophane in the industry and the first candy company to do business in British Columbia. The company has always had a very innovative flair. If anything, our innovation rate might be a little slower today because it's much more difficult and much more expensive to introduce products today. We are still innovative. We now have the highest fruit content fruit snack in the world, as far as I know, and certainly in North America. This year, we're introducing a chocolate-covered real fruit product in our Christmas line called Fruitfull Au Chocolat. We're not going to be successful as a little guy in a big man's world by copying them (competitors). We've got to find our niches, our opportunities and our points of difference. That's what we're doing.

11. What's the most valuable lesson you've learned in this business?

"I guess what is most important is to understand the cash. Cash isn't always an income statement or a balance sheet, so understanding how you're managing cash is very important. We don't give out financial information but we've grown by about 20 times (since he took the helm in 1977). We've gone through fairly strong growth since 2000, about doubling the business in that time period. We've done that by working on the branded side of our business and taking on some major contracts. In the branded side of the business, we're not going to be hitting home runs because our major competitors won't let us do that. So the growth is moderate in that area as we chip away and try to gain market share. What has really made the difference is that we've proactively gone after the private-label business and we've taken on three major contract customers since 2000. The most visible of those contracts has us producing a large portion of the chocolates for Laura Secord (Canada's largest chocolatier)."

12. What's your long-term vision?

"Operation Excellence is the phrase that we are using for the organization for the next couple of years. We've invested a lot, expanded our new factory and put a lot of money into new equipment, so what I want to do now is to utilize that well and strengthen our balance sheet. Our current strategic view is for two years of moderate growth, getting costs well in line with the business, running it very well and getting the management team integrated and working well. Then, we'll set off to double the business again. Whether that's in '07 or '08 is currently a work in progress at the moment with the senior management team. I've brought onside a chief operating officer (David Pigott) to try and help with that. If in two or three years time we make a very big expansion and put bricks and mortar on the ground, it's not a five-year plan, it's a 25-year plan. And I'm not going to be around doing that kind of work for the 25 years. We need to bulk up, as the term goes. We don't have the resources to buy somebody and we have no intention to sell to somebody, so we have to figure out how to grow a business. We're still too small to compete well in the long, long run with the Hersheys and other international companies."

13. If I were to make a ridiculously high cash offer for your company today, would you consider it?

"I probably wouldn't return the phone call. I'm just not interested in selling it. I have requests once a month and I see fit not to respond to them. My view is that this bond to community and to employees is important, and if the business was sold there's no question in my mind that it would just be a matter of time before the jobs disappear from New Brunswick. And that's not what I consider to be part of my mandate. We plan to keep the company in St. Stephen. We would move the company to Toronto only if we couldn't make it work in New Brunswick."

14. How would you describe your management style?

"What I like to do is establish kind of a strategic vision. I'm fairly hands-on, but I try and allow for lots of room for people to make their own decisions within a broad framework. Secondly, I've tended to be opportunistic and to take advantage of opportunities that come along, as opposed to (having) a really clear picture of where we're going to be in market share in fruit snacks in 10 years time. However, we need to do more setting of specific long-term targets than I have been accustomed to now that the business has grown and become more complex. I have brought in a chief operating officer because we have to move from being fundamentally opportunistic to being a lot more strategic."

15. Is there a fifth Ganong family member waiting in the wings to become the next president when you retire?

"The one (family member) who has been in the business the longest is Bryana and, frankly, she's proving herself to be a very capable businesswoman. She still needs experience and wouldn't be ready to take the helm at this point in time. Nicholas has less experience, but he has a great interest in the business, particularly in the manufacturing side, and he has great people skills. I'd have to say the jury is out, but the promise is there. So, likely the chief operating officer (David Pigott) will be the first non-Ganong president of the company. How long I stay on as president will depend on how quickly Dave learns the business and when he'll be ready to take it on. At the moment, we're both very busy. My goal is that he pans out and he seems to be doing very well right now. I'd like to slow down a bit. I'm busier than ever."

16. Who's the entrepreneur you most admire?

"I think it would be the McCain family - Allison, Harrison, who has passed away, and Wallace (builders of McCain Foods, the french-fry giant). I think it's incredible what those guys have done from a New Brunswick base."

17. What are your goals beyond business?

"I'd like to have more time to read. And I'd like to have more time at the lake and less time in Toronto."

18. What does the Order of Canada award mean to you?

"Well, I'm absolutely delighted and elated at being honoured. As they went through the 41 people who were there (being honoured) and I listened to the citations, I thought that to be a part of such an incredible group of Canadians is very humbling. We had researchers and people who have made a big contribution in their chosen fields to their country. We hear so much in the press about the negatives, but it was so uplifting to rub shoulders with these people who are so outstanding in their fields."

19. How do you think your Uncle Whidden would view the Ganong Bros. business as it stands today?

"I think he'd be pleased because the business was core to his being. I mean, it was him. And with the business having survived, having been successful and becoming a more important part of the community, I think those are the things he would be very proud of."

20. When you complete your tenure in the company, what would you want people to say about your legacy with Ganong Bros.?

"I don't think much about legacy. I guess I'd like people to just think kindly of me and say that I helped strengthen the business during my watch, but nothing further than that."

David Ganong

* Title: President/owner, Ganong Bros.

* Born/Raised/Age: St. Stephen, N.B./62.

* Family: Wife Diane, three children.

* Education: University of Western Ontario, MBA; University of New Brunswick, BA, business administration.

* Career: Ganong began working for Ganong Bros. in 1966 in sales and marketing as assistant to the president and was appointed president in 1977, the fourth member of the Ganong family to head the company. Prior to joining Ganong, he held marketing positions with DuPont of Canada and Molson Breweries.

* Moonlighting: Ganong is a director of SunLife Financial, a former director of Air Canada and former chairman of Clarica Life Insurance Co. (before it was acquired by SunLife). He also was instrumental in launching the popular St. Stephen Chocolate Fest.

* Accolades: Ganong is a recent recipient of the Order of Canada and has also won the Golden Pencil Award from the Food and Consumer Products Manufacturers of Canada.

* Sweet tooth: Ganong's estimated daily consumption is a dozen chocolates.

* Drives: BMW 325.

* Passions: Chocolates, books, trains.

* Favourite Author: Pierre Berton.

Ganong Bros.

* Brass: David Ganong, president; David Pigott, chief operating officer; Doug Gaudett, chief financial officer.

* Profile: Ganong is Canada's oldest candy producer and renowned for its boxed chocolates, which accounts for the bulk of its sales. It exports candy to the U.S. and U.K., produces chocolates for companies such as Laura Secord from its plant in St. Stephen, N.B., and also operates the Ganong Chocolatier Shoppe in St. Stephen. The company has about 400 employees in St. Stephen and regional operations in Moncton, Mississauga, Vancouver, New Westminster and Cincinnati.

* History: Ganong Bros. was founded in 1873 as a candy and soap company operated by brothers James and Gilbert Ganong. It became an exclusive candy company in 1884 when the brothers dissolved their partnership and Gilbert took over the candy operations.

* Milestone: In 1910, Arthur Ganong, president of Ganong Bros., and factory supervisor George Ensor invented the five-cent chocolate bar to take on fishing trips.

* Accolades: In 1999, Ganong Bros. was recognized as one of Canada's 50 best-managed companies.

* Website: www.ganong.com

* Head Office: One Chocolate Drive, St. Stephen, N.B., E3L 2X5.

* Phone/Fax: 506-465-5600/465-5610.

(Gyle Konotopetz can be reached at gyle@businessedge.ca)