Pepe Quintero Uriach: Transformation and adaptation in legacy family business
As an experienced and successful business developer, Pepe Quintero Uriach draws upon six generations of entrepreneurial spirit when it comes to his purpose-driven, positive-impact projects.
That innovative essence was initiated by Juan Uriach Feliu in 1838 when he started working in a chemists in his teens only to eventually buy out the owner, a move that sowed the seeds of a leading global pharmaceutical company.
Having now pivoted into a health and wellness company which is active in more than 70 countries worldwide, Uriach still retains an independent family structure following a corporate shakeup in 2021.
Here, Pepe talks exclusively about the evolution of his family’s legacy pharma business, how the decision was made to turn the reigns over to a corporate structure that separates ownership from management, and what that decision means for the next generation and beyond…
Can you talk about the origins of the Uriach family business?
It all started back in 1838. My great-great-great-grandfather was the son of a miller living in a village next to Barcelona – which is nowadays a district inside Barcelona. As he was not the oldest, he didn’t inherit the family mill, so he went to Barcelona to seek new opportunities. We know that he arrived by foot, as that’s a key part of our family’s narrative because it reflects our principles of entrepreneurship, effort and humility.
Once in Barcelona, he started working as a trainee in a chemist store selling products that we ironically started selling again generations later. One of his first tasks was to clean the store and he wound up sleeping under the counter in winter and over the counter in summer.
After a number of years, the owner of the shop decided that he wanted to sell and somehow my great-great-great-grandfather, who had obviously cleverly saved his wages, bought it. That sowed the seeds of five more generations working in the family business.
Our inherited entrepreneurial spirit guided us to change and adapt to market trends.
In 2021, Uriach sold its B2B Pharma business. Can you talk us through what brought the family to this decision?
The main decision was to focus on our strongest business. We had two business at the time; prescription medicine (doctors’ prescriptions and strong research and development [R&D]) and over the counter [OTC].
The risks of the prescription business is that is very capital-intensive and is very dependent upon government approval, so not all the decision-making power is on our hands. On the other side, the OTC products have a more flexible way of doing things and you can have the control over the whole chain. Also, governments are cutting budgets on healthcare and that was another risk. So the board of directors sold the prescription business in order to focus on the area where we saw more potential.
It wasn’t an easy decision, as our roots were in pure pharma and my grandfather was not very convinced of making the move. However, thanks to that sale, we are now a multinational company.
Basically, our inherited entrepreneurial spirit guided us to change and adapt to market trends. Every single generation has adopted a reactive new business model in the field of healthcare – from the first generation’s chemist to the second gen’s step towards industry by opening a factory, the third generation’s move to international importing, the fourth generation’s adoption of R&D and the fifth generation’s focus on consumer healthcare and food supplements. Who knows what the future has in store for the sixth generation?
The business was once led by your grandfather single-handedly and now the reigns have been turned over to a corporate structure that separates ownership from management entirely. How did this change come about?
Back in the 1950s, my grandfather was managing the company with his cousins. Then in the 1980s, there were disagreements on where to take the company next. My grandfather was super committed with the legacy and wanted to push towards R&D, whereas his cousins mainly wanted to get dividends from the company. So he pruned the family tree to focus on R&D and he became Uriach’s 100% shareholder.
As my grandfather was alone and, in a way, the new founder of the company, he had the great idea of establishing an advisory committee, which was the nascent version of the board of directors.
So, 40 years ago, he initiated the professionalisation of the governing bodies. The next evolutionary step was taken by the fifth generation, who, after years working with the advisory board, decided to draw up a family constitution and establish the board of directors and other governing bodies.
Those governing bodies include the owners council, which comprises five family members – including two from the fifth generation and one from the sixth; under that is the board of directors, which doesn’t involve any family members. The same structure applies to the investment vehicle.
With all that, we have a family council where we treat family values and family constitution - this includes an inclusive forum where we do different activities with the whole family together, including the new seventh generation, of which my daughters are included.
Where does this new corporate and governance structure leave the next generation?
Nowadays we have a board of directors, including five non-family members, two members from the fifth generations and one member of the sixth generations, who in this case is my brother.
The family constitution is already reflecting how the sixth generation is going to take over the corporate governance side of things - but, it’s very important to say that the family constitution is a live agreement, there are no golden rules and everything can change in the future.
Campden Wealth’s 2022 European Family Office Report found that significant numbers of European family offices report that the next generation is too young (36% of respondents) or inadequately qualified to take over (34%). In your experience, are Next Gens really lacking in the experience and education to take their family business to the next level?
As I was previously mentioning, no family members are currently allowed to work in the family business as executives. We think that the best talent can be found outside the family and we’re always looking for the best.
What’s clear is that commitment to our family legacy will always be of paramount importance and that’s why we will always be involved in the highest level of corporate governance where every generation takes a different approach. For example, my sixth gen is more conscious of sustainability and we’ve grown up in a digitalised world, so maybe we have less experience in some ways but way more in others.
Whatever I do, my commitment towards my family, history and values are untouchable.
Coming from a multi-generational legacy family business, is there a certain sense of freedom that comes from making your own way on your own merit?
The freedom we have started when the fifth generation said that no one from the family is allowed to work in the company and the sixth generation cannot become owners or shareholders, so we receive no dividends. In this sense, every single member of the sixth generation ended up working for themselves or for other companies. I personally founded two companies and now I’m working on a start-up.
As an experienced entrepreneur and business developer, how would you say your family’s legacy has shaped the way you get things done?
The truth is, whatever I do, my commitment towards my family, history and values are untouchable. I’m very proud of this legacy and the work done by the previous generations. There’s something beyond the company which provides an emotional link across all generations of my family which is priceless.
Pepe Quintero Uriach will be speaking at Campden Wealth’s 20th Families in Business Forum, held in Barcelona, Spain, from September 19-20. For further information, click here or email Liam Smith on liamsmith@campdenwealth.com.
