One of the biggest names in craft beer, Colorado’s New Belgium Brewing, said Tuesday it is selling the business to a subsidiary of Japanese beer maker Kirin. That brings to an end one of the most well-known examples of an employee-owned company in the United States.
The maker of Fat Tire ale switched to all-employee ownership in 2012 through an arrangement called an employee stock ownership plan, basically an employee-owned trust that holds the company’s stock. Only about 6,000 companies in the U.S. are owned by their employees in this way. And while the total number of companies like New Belgium has dipped slightly over the last decade or so, there are more workers in those employee-owned companies than about 10 years ago, according Loren Rodgers with the National Center for Employee Ownership.
“Employee-owned companies tend to be just more productive so they grow faster. They increase their own employment faster than the average business,” he said.
Research shows there’s less turnover, too. Sandra Reid is a 33-year employee at the Davey Tree Expert Co., which specializes in yard care and is one of the largest employee-owned companies in the country with about 11,000 employees.
“Employee ownership is definitely one of the reasons that keeps me with the Davey organization,” she said. “We work for ourselves and we work for each other.”
While entirely employee-owned companies like Davey or New Belgium are rare, almost half of private sector companies give workers some kind of stake in a business through stock options or profit sharing, according to Joseph Blasi, director of the Institute for the Study of Employee Ownership and Profit Sharing at Rutgers University. He said these kinds of plans can help reduce growing income inequality.
“Having a chance to own some shares in your company or share in the profits, that’s a way for financial inclusion and fairness,” he said.
Better tax incentives to encourage selling to employees would help increase such arrangements, Blasi said. But all the benefits to productivity and retention can sometimes make these companies a victim of their own success: Employees want to cash out when business is good, and if they sell, that’s one less company owned by its workers.