Hagerty Brothers has kept the family business alive for a century and a half by reinventing themselves and adapting in challenging times.
In 1855, a young Saul Hagerty left his home in Pennsylvania and came to Peoria in search of better opportunities. An experienced millwright—a tradesman who works on the construction and maintenance of machinery—Hagerty found Peoria to be just what he was looking for. As one of the most significant distilling centers in the country, the River City provided much work for millwrights like Hagerty, who knew how to build and service the equipment needed to distill spirits. Hagerty’s reputation grew rapidly, and in 1860, he started his own business and began building and servicing distilleries under the Hagerty Brothers Company name. By the turn of the century, he had built or rebuilt 19 distilleries in Peoria alone.
When Saul Hagerty died at age 81, his business was passed down to his sons, Almon, Robert and H. Guy, who expanded it in 1905 by selling industrial materials such as shafting, belting, pulleys, hoses and engine packing. This diversification proved to be very wise, as Hagerty’s distillery business suffered a major setback when Prohibition hit in 1922. Once again, the company diversified and started producing potato-chip-sized pieces of charred oak called Shaco Chips (after Saul Hagerty and Co.) that, when placed in barrels of homemade corn liquor, could make bourbon. Sales of Shaco Chips to Canada and countries in South America during the Prohibition years helped the company weather the storm.
The Prohibition era wasn’t the only tough period for the company. In its 150 years of business, Hagerty Brothers has survived 16 official economic recessions, due in large part to its ability to evolve and adapt to changing times. Randy Fellerhoff, the company’s current president, proposed that it’s not the fact that Hagerty Brothers was willing to diversify that makes them unique; rather, “it’s that we managed to do it while maintaining the same ownership structure, the same family, for six generations.” While some businesses have roots that go back as far, they often survive by being acquired by larger companies. Susan Fellerhoff—the fifth generation of the Hagerty line and Randy’s wife—added that just two percent of family businesses make it to the sixth generation, as Hagerty has.
Since its initial diversification, Hagerty Brothers Co. has grown to include a transportation company, machine shop, and warehousing and fulfillment operation, but the largest and oldest continuing segment of the company is Hagerty Industrial Supply. This general-line industrial supply distributor has offered OEM (original equipment manufacturer) parts and services to manufacturers in central Illinois and eastern Iowa since the 1920s. “We had lots of supply relationships for products that had historically been used in the business,” explained Randy, “so making those products available for sale more broadly was just a natural evolution.”
Starting At the Bottom
After graduating from college, which is where Susan and Randy Fellerhoff met, the couple received an invitation from Susan’s father, John Hagerty “Ted” Flora—then-president of Hagerty Brothers Company—to join the business. And so, 32 years ago, the Fellerhoffs accepted Ted’s invitation and came to Peoria, becoming the fifth generation involved in the family business. At the time, Randy began working for the company while Susan stayed home to raise their three daughters. It wasn’t until eight years ago that she became active in the business on a daily basis.
While being groomed to take over the company, Randy began at the bottom. “I started in the warehouse, learning what we did and how we did it, and worked my way up through the sales side of the business, experiencing a variety of different assignments during the early years.”
When Randy assumed the role of president in 1986, he was the only family member active in the business. Since then, the Fellerhoffs’ oldest daughter, Whitney Vincent, has joined Hagerty Brothers, becoming the sixth generation involved in the family business. As a kid, Whitney had wanted to be involved in the company in some respect, but it wasn’t until after she graduated from college that she was sure she wanted to make a career out of it. “I quickly fell in love with working as part of a family business, and now I can’t imagine not being involved.”
Like her father before her, Whitney started in the warehouse, learning the basic functions of receiving and order fulfillment. After six weeks, she moved into sales and purchasing, which led to her current position as purchasing manager.
A Sense of Family
One of the rewards of running a family business, said Randy, is being able to take a long-term approach when planning—as opposed to just looking at the next business quarter or fiscal year. “We have the luxury of being able to take a much longer view of what we’re doing and what we’d like to
Another benefit for Susan and Randy comes from watching their daughter learn the business and contribute to its success. “The more accomplished she becomes,” Randy said, “the more satisfying it is, not only on a professional level, but on a much more personal level”—clearly something one could only experience in a family business.
Whitney believes that being a part of the business has brought her family closer together. “I love working with my parents,” she said. “We have a great relationship, and it is really fun to be able to all work towards the same goals through the business.” With their strong support, Whitney said she feels comfortable expressing her thoughts about all aspects of the business, and on a personal level, working with her parents has lessened the stress of being a full-time working mom.
According to Randy, the challenges faced by Hagerty Brothers aren’t much different from the challenges any business faces—finding and retaining quality people, surviving difficult economic times and so on. “I don’t know that it makes the job any less difficult, but certainly having family involved can provide some comfort,” he said.
While the majority of Hagerty Brothers’ nearly 70 employees aren’t members of the family, Susan and Randy said they’ve heard that those who aren’t family are made to feel as though they are. “At least since I’ve been involved in the business,” Randy explained, “there is a sense of family associated with what we do.”
Secrets to Success
One key reason that Hagerty Brothers has been successful at keeping the business in the family is that every family member involved with the company has started at the bottom and worked his or her way up. “There’s no better way to learn the business than actually having assignments and being productive in the business,” said Randy.
It’s also important to “keep the ownership cleaned up,” added Susan. Ted acquired control of the business when he purchased his sister’s shares in 1943. Sixty years later, Susan and Randy purchased 100 percent of the shares from their family members. “One of the things that often happens in family businesses,” Randy explained, “is the family grows and the ownership can become somewhat diluted…you have a lot of potential owners who are not actively involved in the business.” The Fellerhoffs advise that families avoid this whenever possible. “The family that’s interested in working in the business also needs to have control of the business,” said Randy.
Whitney advises children who are thinking about entering their family’s business to give it a try, but only if they believe it is something that will be fulfilling to them on a personal level—and if they’re willing to work hard.
Mixing business with family has certainly worked for Hagerty Brothers Co., due in large part to the involvement of hard-working, committed family members. By keeping the lines of ownership clear and maintaining a willingness to change with the times, the company has not only survived, but prospered. iBi