Newsletter Article
March 2020

The End of Employee Ownership at New Belgium Brewing

On November 19, 2019, it was announced that New Belgium Brewing, the fourth largest craft brewery in the United States and the first craft brewery in the country to become an ESOP, would be acquired by Lion Little World Beverages, a subsidiary of Japan’s Kirin Holdings. The buying and selling of businesses is a common occurrence. That did not stop people in the comments section on Instagram or users on Twitter from expressing their sadness at hearing the news of New Belgium’s sale. It is, of course, natural to feel a little bummed out about seeing one of your favorite employee-owned companies and ESOP ambassadors depart from the community.

The company was one of the most recognizable brands in the ESOP world, with popular beers like Fat Tire being distributed in all 50 states. When speaking with friends or family members unfamiliar with the employee ownership idea or the thousands of ESOPs throughout the country, I would often make a point to reference New Belgium as a 100% employee-owned company they might recognize, and many of them did. In New Belgium’s home town, Fort Collins, Colorado, many locals viewed New Belgium’s popularity as the largest employee-owned craft brewery as a point of pride. Despite how the sale may feel to many New Belgium customers and fans of their outgoing ownership model, we can still acknowledge what this means for so many long-tenured employee-owners themselves and reflect on the stories of success and a proud workplace culture that have benefited numerous companies in the employee-ownership community. Rather than focus on what is being lost, let us focus on what has been gained as a result of New Belgium’s journey.

The Owners

New Belgium, like many small businesses, started in a basement and would grow to employ about 700 people in recent years. When founders Kim Jordan and Jeff Lebesch and several other minority shareholders sold their respective shares of the business to employees at the end of 2012, New Belgium became more than just a fast-growing craft brewery. It became a notable example of how independent craft breweries could remain independent through business succession while strengthening their legacy and the opportunities they would provide to employees in work as well as their personal lives.

In Jordan’s letter announcing the sale, she shares what New Belgium workers will gain as a result of the sale and what many have gained since their ownership transition: “More than 300 employees are receiving over $100,000 of retirement money with some receiving significantly greater amounts. Over the life of our ESOP, including this transaction, the total amount paid to current and former employees will be nearly $190 million.” While many people, whether they be employees or loyal fans of the company, will have mixed feelings about the acquisition, it’s important to highlight the very real impact employee ownership has had on so many workers’ lives.

According to the recent statistics from the National Retirement Risk Index, approximately “50 percent of households are ‘at risk’ of not having enough to maintain their living standards in retirement.” And this is precisely why employee ownership is so meaningful. New Belgium’s ESOP may be coming to a close, but the impact it has had on employees and the community itself will be long lasting for many. While it would be nice for the ESOP community to retain its great companies permanently, that is not a realistic goal unless employee-owners are willing to forego potentially significant economic returns or market opportunities.

Influencing an Industry and Community

New Belgium was the first craft brewer to become an ESOP, and its success has been part of why at least 15 other craft brewers have become ESOP companies as well. Well-known brands such as Harpoon, Modern Times, Great Lakes, Left Hand, Fort Collins-based Odell Brewing, and many others have learned from and built on the New Belgium experience. It does not stop with being influential in other transitions either. Their culture has had an impact too.

As former New Belgium employee and director of organizational development Jennifer Briggs has stated: “New Belgium Brewing has a rich history of unconventional thinking.” The company has served as a prime example of the benefits of open-book management and building a values-centered business. When it decided to become the first wind-powered brewery, employees voted on whether to do it. Monthly company meetings provided an opportunity for employees to have input on a variety of b usiness issues, such as whether to get into the hard cider market. Employees were given the green light to experiment with new ideas. Its ESOP Communications Committee (POSSEE, ESOP spelled backward plus an S) was elected by employees and played a role beyond
just explaining the plan.

Looking beyond just financial success, the company would become a Certified B Corp, dedicating itself to being a force for good in business, according to Jordan. They have shared these practices and experiences with a plethora of ESOP companies over the years, and the community at large has benefited from it and will no doubt continue in the same tradition.

It is true that many will mourn the loss of a great ESOP company, but at the same time, we wish everyone at New Belgium Brewing the absolute best. Thank you for making such a positive impact on this great community. Employee ownership has been well served as a result.