Craft breweries are no strangers to the employee-owned stock ownership (ESOP) business structure and now one of their suppliers has joined them (here is an article on how to do it if you’re curious). At a company-wide meeting, NewAge Industries, maker of BrewSavor brewery hose and tubing, made it official and is now an ESOP. The event was the culmination of a plan first considered by CEO Ken Baker more than two decades ago.
“I’ve had a lot of other business owners ask me, ‘Why employee ownership? Why not just take the highest offer and walk away?'” Baker said. “And my response has always been, ‘Because I don’t want to see the company that my father started, and that we’ve worked so hard to build, get broken into pieces, or shuttered, or absorbed by some big conglomerate.’ There are a good number of people who’ve been with NewAge for over ten years. Another group has passed the fifteen-year mark, and several more have over twenty years of dedication. There are even a few employee-owners who’ve been with NewAge for over twenty-five years. The ESOP is one way to reward these long-term team members after they retire.”
NewAge’s ESOP was initiated in 2006 when Baker sold thirty percent of the company to its employees. Ten percent more was sold to the ESOP in 2013, and then another nine percent in 2016, bringing the total percentage of ESOP ownership to forty-nine percent. Since its inception, the share price has appreciated 975%.
“Many people have misconceptions about how an ESOP works. It doesn’t cost the employees anything. It’s overseen by a trustee, whose job it is to handle the ESOP’s assets in the best interests of the employee-owners. The company receives tax benefits, which in turn benefits the ESOP. And, yes, the business owner can make a nice sum from the sale of the company’s stock. Everybody wins,” noted Baker.
Joel DeVine, NewAge’s Quality Control Supervisor and a fourteen year team member, said that the “ESOP means that we as owners have an understanding about our company and how we all play a fundamental role in not only the success of our business but also in the health of our retirement by remaining focused on our customers and our team members.”
“I am proud to be a part of something that affects so many people… our customers and their customers, all of my fellow owners and their families,” stated Kimly Ourn, Mold Shop Supervisor. “I consider myself very fortunate to have become part of the NewAge team seven years ago. I worked at several jobs prior to NewAge, and not many offered benefits and nothing like what we have here. Working here has made a big difference in my life. I’m healthier and happier, and knowing that I can retire with a piece of something that we’ve all helped build is like the cherry on top.”