PFBI Case Studies

< Back

Friedr. Schwarze GmbH & Co. KG: A Legacy of 350+ Years of Excellence in Premium Spirits

Friedr. Schwarze GmbH & Co. KG is a family-owned business with a legacy of over 350 years, headquartered in Westkirchen, Germany. This remarkable company has thrived through 13 generations by blending tradition, innovation, and strong family values.

Origins and Historical Perspective

The Schwarze family’s legacy began in 1664, when Joan Schwarze founded a distillery, producing “Korn,” a traditional cereal liquor. Over the centuries, the company has developed a variety of alcoholic beverages, including grain alcohol, coffee liqueur, honey liqueur, and fruit liqueur. Some notable brands include Original Schlichte Steinhäger, Kosakenkaffee, and Bärenjäger.

By the mid-19th century, Gottfried Schwarze (Gen 2) modernized production by introducing advanced technologies and leveraging the new railway network, enabling the firm to expand its distribution. The company has expanded its product line and market presence, with brands sold internationally in countries like the USA, Japan, South Africa, and Israel.

In 1912, the company adopted its first trademark, showcasing its commitment to quality and tradition. This set the stage for future branding strategies and positioned the firm as a leader in premium spirits. They partnered with Coca-Cola in 1951 which further diversified its business portfolio.

Generational Involvement

11th Generation:

Ilse Gertrud Schwarze was the 11th Generation family descendant, who owned 66% of the shares. She along with her husband led the company. After Ilse's brother, Friedrich Schwarze, lost his life during World War II, the traditional male succession line was broken. Despite this, the family retained ownership and established key governance structures to ensure continuity

12th Generation:

Friedrich Wilhelm Schwarze, representing the 12th generation, brought the firm into the modern era. Born as the third child but the first male, Friedrich Wilhelm naturally became the heir. Significant milestones mark his leadership:

• Portfolio Diversification: In 1990, he co-founded Schwarze & Schlichte, a distribution company, to expand internationally. This move strengthened the firm’s presence in global markets.
• Strategic Acquisitions: Friedrich oversaw acquisitions of iconic brands, including Koenig & Schlichte and the Racke Group’s spirits division.
• Production Relocation: To manage growing production demands, the firm relocated its operations to Steinhagen in 1992 and later to Rinteln.

Governance under Friedrich Wilhelm emphasized professionalism and strategic planning. The introduction of the advisory board, Beirat, played a pivotal role in ensuring balanced decision-making and strategic foresight.

Premium Spirit

13th Generation (Current):

The 13th generation comprises of 16 members from five family branches. Friedrich Wilhelm’s children, a son and a daughter, are already part of the ownership structure, with shares transferred to them in 2012. While Friedrich’s daughter has shown interest in joining the business, other members from the extended family have yet to participate actively.

Governance Structure & Mechanisms

• Family Involvement: The Schwarze family holds all the shares in the company. Friedrich Schwarze, a member of the 12th generation, serves as the CEO and managing partner. Friedrich Schwarze holds the largest share at 37.6%, while his siblings collectively own the remaining shares. Family members from the 13th generation hold non-voting shares to ensure a cohesive transition.
• Shareholders' Agreements and Meetings: The family maintains structured shareholders' agreements and regular meetings to ensure alignment and effective governance. Provisions include rules on share sales within the family and reinvestment of dividends for future growth.
• Trust and Partnerships: The company emphasizes honoring family inheritance, ensuring trustful partnerships, and maintaining good employee relations.
• The “Beirat” - Established in 1987, this advisory board acts as the primary governance mechanism, with significant decision-making powers on strategic investments. Its composition includes family-nominated and independent members. This balances external expertise and familial oversight.

Friedr. Schwarze GmbH & Co. KG exemplifies a well-governed family business that has successfully navigated the challenges of generational transitions while maintaining its core values and traditions.