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Yorgus Yogurt and Zona Sul: Building a New Venture in an Established Family Business

Abstract

Enrico Leta was the proud owner of Yorgus, a Brazilian maker of premium Greek yogurt that had grown rapidly since its launch in mid-2014. The business had developed against the backdrop of the Letas' large family business: Zona Sul, a high-end grocer with 36 stores. Enrico's father, Fortunato, inherited leadership of the company from his father in the mid-1980s and had grown it dramatically in recent decades. But conflicts in Fortunato's generation had resulted in a policy prohibiting Enrico's generation (i.e., the third in this family business) from joining Zona Sul. Consequently, Enrico, his brother Patrick, and others in their generation had launched independent businesses in the food space, serving as suppliers to Zona Sul and benefiting more broadly from the family's success, network, resources, and name.

Enrico had developed Yorgus within his brother Patrick's premium cheese business, Vitalatte, becoming a partner in that firm, with the two making strategic decisions together. Although excited about Yorgus's growth, Enrico was now considering taking his business independent of Vitalatte, in part because he was eager to scale quickly, whereas Patrick and Fortunato were more cautious.

Going independent would likely mean securing outside financing or partnerships for a business that had been self-funded to date. Moreover, Enrico had to think about how independence might affect his access to its current resources--production- and distribution-related, for example--and his relationship with Patrick, his partner. Meanwhile, although it encouraged members' entrepreneurship, the family was motivated to avoid conflict in the third generation, given the challenges of the second generation.

Type

Case

Author(s)

Jennifer Pendergast, Justin B. Craig, Sachin Waikar

Date Published

04/20/2022

Discipline

Family Business

Citations

Pendergast, Jennifer, Justin B. Craig, and Sachin Waikar. Yorgus Yogurt and Zona Sul: Building a New Venture in an Established Family Business. Case 5-122-002.

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