Most family food businesses don't bring in an outside leader because everything's running smoothly. They do it because the founder is stretched, a family successor isn't ready yet, or the business has simply grown past the point where one person can hold it all together. It's a big decision, and it's usually made with genuine goodwill on both sides. What tends to go wrong comes afterwards, when the new leader arrives and finds that the founder hasn't actually stepped back.

Family Businesses Are Opening the Door to Outside Leaders

Deloitte Private's latest family business research, published in Australia in August, surveyed 1,587 family businesses across 35 countries and found that 40% expect a leadership or CEO change within the next decade. It also found that the share of family businesses expecting a non-family CEO after succession is set to double, from 13% to 26%.

That's a significant shift in thinking. For many families, the question is no longer which family member takes over next, but who's best placed to lead the business while ownership and stewardship stay with the family. Deloitte's view is that ownership and management don't always need to sit with the same people, and more families are coming round to that idea.

We're seeing the same thinking closer to home. When Roma Foods, the family-owned Victorian manufacturer behind brands including Orgran and Pasta Roma, confirmed in June that its CEO was stepping down after more than six years, the business said it would review its structure and explore leadership options internally and externally, including a possible CEO, General Manager or other senior executive role.

That's a family business taking the time to work out which role it actually needs before it fills one, and it's a sensible way to approach a decision of this size.

The Hardest Part Isn't Finding the Leader

The same Deloitte research is clear about what holds succession back. The top three challenges were next-generation readiness at 35%, difficulty identifying a suitable successor at 33%, and current leadership being reluctant to relinquish control at 32%.

That third figure is the one most founders don't like talking about, but it's the one I see cause the most damage. A founder who has built a business over 20 or 30 years doesn't stop being the person everyone turns to just because a new title appears on the organisation chart. Suppliers still call them, major customers still want them in the room, and long-serving staff still check with them before acting on a decision the new leader has already made.

None of this comes from bad intent. It comes from habit, loyalty and a deep sense of responsibility for the business and the people in it. For the incoming leader, though, the effect is exactly the same, because they've been handed the accountability without the authority, and good leaders don't stay in that position for long.

The Business Is Still Tied to the Founder

This pattern isn't limited to larger family businesses. Research commissioned by VistaPrint, which surveyed 510 Australian small and medium business owners earlier this year, found that 31% plan to retire within five years, yet only 16% have a documented succession plan. One in five of those planning to retire hadn't discussed their exit with anyone at all, whether family, staff or an adviser.

The research also found that many of these businesses remain heavily tied to the owner through their personal relationships, reputation and day-to-day involvement, which makes them much harder to hand over when the owner steps away.

In a food and beverage manufacturing or fresh produce business, that tie usually runs through a handful of critical areas:

• The relationships with key retail and foodservice customers, which the founder has often built personally over decades
• Supplier and grower arrangements that rest on trust and a handshake rather than a written agreement
• Pricing and product decisions made on instinct and experience that nobody else in the business fully understands
• The informal authority the founder holds with long-serving staff, whatever the reporting lines say

When an outside leader arrives and none of that has been transferred, they spend their first year trying to rebuild knowledge the founder carries around in their head, instead of moving the business forward.

What This Looks Like in Practice

In my experience running FMCG businesses, and in the senior searches we've run since, the warning signs show up early. The founder agrees to step back but keeps the same office, the same meetings and the same phone calls. Family members working in the business report to the new leader on paper and to the founder in practice. The new leader makes a call on pricing or production and hears a week later that it's been quietly reversed.

Each of those moments tells the incoming leader, and everyone else in the business, where the real authority sits. Within 12 to 18 months the outside leader has usually resigned or been moved on, and the founder concludes they simply hired the wrong person. More often than not, it was the right person walking into a role that was never genuinely handed over.

What Founders and Boards Should Do Before the Search

The encouraging part is that this is fixable, and almost all of the work happens before the search begins.

Start by deciding what the founder's role will be after the appointment, whether that's chair, a defined commercial role or stepping away entirely, and make that decision known inside the business before the new leader arrives.

Write down which decisions the new leader will own outright and which will still need the founder's or the board's approval, so there's no grey area for anyone to work around.

Get the critical knowledge out of the founder's head by documenting key customer and supplier relationships, the logic behind pricing and the history behind long-standing decisions. Agree how family members working in the business will report and how disagreements will be handled, because that's the arrangement that gets tested first.

It's also worth bringing an independent voice onto the board or into an advisory role. Someone without a family stake can hold both the founder and the new leader to what was agreed, which is far harder for family members to do for each other.

The Real Test of Readiness

Family food and beverage businesses that successfully hand leadership to an outside executive don't do it by finding a better candidate the second time around. They do it by making sure the business, and the founder, are genuinely ready for someone else to lead.

If you're a founder, CEO, or board member in a family-owned food, beverage or fresh produce business and you're preparing for your first outside leader, it's worth being honest about whether you're ready to share control before you start looking for the person you'll be sharing it with.

ELR Executive is a specialist executive search firm focused exclusively on FMCG, food and beverage manufacturing, and fresh produce. If you're facing a senior leadership decision and want clarity before proceeding, a conversation with John Elliott may be a useful place to start.