Why Left Hand Brewing created an employee stock ownership plan

We, my partner Dick Doore and I, started Left Hand Brewing Co. with a pretty straightforward goal: to make great beer and see if we could make a living doing it.  In addition, we intended to participate in changing the world for the better and to share our passion with others.

Since the beginning, we believed that by staying true to our raison d‘etre, minding our financial P’s and Q’s, and remaining unwavering in our commitment to doing the right thing, that an honest living for ourselves and for our employees could be realized. Capitalism is an efficient system for employing capital in the marketplace. But we didn’t start Left Hand to make money. We were on a “Mission from God.”

Starting a business for the sole purpose of selling and starting the cycle over again, in the pursuit of purely financial returns and without a strong underlying passion for the product, seems to me a somewhat soulless pursuit — a strategy more suitable for funding multiple divorces with the gains attained, than for creating a sustainable business with a real and satisfying impact on the larger community and people.

Last week, Left Hand took a significant step in our 22-year history by establishing an Employee Stock Ownership Plan (ESOP). This was a natural progression for us, as a company whose culture is based on the principals above, and with nearly 50 percent of the company already being employee-owned as a result of granting stock and offering purchase opportunities for staff as well as providing management bonuses for more than 15 years in the spirit of longevity.

But, why an ESOP? I know that ESOPs are not for every company. Like I’ve said before, we’re on a mission from God (per Elwood Blues), and the mission comes first.

The first advantage of the ESOP is to demonstrate to our employees that they work for a company with a clear mission.  Our intention is to help them realize their maximum potential, and the ESOP is a manifest that demonstrates that we shall remain in control and righteously independent — for the future of the company and our people.

It is our commitment to find, engage and retain people who share our values and have the talent to operate and help run our company. This is a long-term pursuit. Attracting and retaining talented people who share our goal of excellence and relevance is a major reason for creating our ESOP. By giving all of our employees the opportunity to share in the ownership and long-term results of our combined efforts, we also hope to improve front-line decision-making, increase operational efficiencies, and build the “One Team” spirit that we avidly pursue. This is capitalism with a bit more of a participative bent.

The second advantage, and one that is more global, is in a world where people search for meaning when they spend their money on goods and services, beer drinkers can confidently buy our beer knowing that we are committed and engaged in the health of our people and the communities we serve and operate in.

The third advantage of an ESOP is that it sends a message to potential suitors that we really mean it when we say we’re not for sale. Craft brewing has boomed from sub 1 percent market share into double-digit share, and the money folks have noticed. They wouldn’t give us the time of day when we first started and really needed it, but now the phone doesn’t seem to stop ringing with offers to “partner, take chips off the table, leverage our brand with their talent”, etc.

While ESOPs are rare in any industry, including craft, there is a unique mentality for those of us lucky enough to call it work. It’s pretty simple. As my buddy Sam Calagione of Dogfish Head Craft Brewery fame has said many times, craft brewing is 99 percent asshole-free. We tend to care about our mission, our people, our communities and even our competitors, because we’re out to change the world (if you haven’t noticed)! Money is a tool to realize our goals, not the goal itself.

Eric Wallace is president and co-founder of Longmont-based Left Hand Brewing Co.

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