January 13th, 2020
Barrio Brewery, Arizona’s oldest craft brewery, started off 2020 by selling 100% control of the company to its employees through an ESOP. Any of the brewery’s 70 employees who work 1,000 hours or more in a one year period will be automatically enrolled in the plan. For Dennis and Tauna Arnold, who founded Barrio Brewery as Gentle Ben’s Brewing Company in 1991, the decision to sell to an ESOP meant their company and legacy would be in good hands.
Barrio Brewing now enjoys being 100% Employee-Owned
“Barrio Brewing started as, and will continue to be, a family affair as our employees are family and have put their hearts and souls into making Barrio what it is today,” Dennis Arnold said in a press release.
Barrio is the latest in a string of craft breweries to enjoy employee ownership. Harpoon, Modern Times, Odell, and Left Hand Brewing are just a few of the major craft brewers with ESOPs. New Belgium, the brewer of Fat Tire, has been one of the biggest stories in ESOPs since becoming 100% employee-owned at the end of 2012. They were back in the news in 2019 when the employees voted to sell New Belgium to the Kirin subsidiary Lion Little World Beverages. Since the sale meant relinquishing their ESOP, some have claimed that New Belgium is not a true ESOP success story. The brewery’s 300-plus employees, each of whom earned $100,000 or more in retirement funds from the sale because of their ESOP, would likely feel differently.
With so many craft breweries creating ESOPs, the question is, what makes employee ownership so attractive to the craft brewing industry? There are certain benefits to ESOPs that make them a perfect fit. Craft breweries tend to be proud of their independence, and selling to your employees, rather than an outside party, means that the brewery gets to keep its identity, its culture, and its processes intact.
It’s also a powerful way to keep and reward the team who helped the brewery become a success. Many craft breweries share similar origins: a couple or a group of friends with a passion and a dream, who then built a tight-knit team of people with specialized skills to help them create a product that resonated with consumers in a crowded market. As we saw in our recent case study of luxury wine management company Intervine, when the success of your business is so deeply tied to the strength of the team you worked so hard to build, entrusting your legacy to that team is the simplest decision you could make.
As Barrio’s Dennis Arnold put it, “The decision on our exit strategy was easy for both of us, either sell the business or simply give the business to those who’ve made it what it is, our employees, leaving them with their destinies in their own hands.”
Congratulations to Barrio Brewery on becoming a 100% employee-owned company. For any other businesses thinking about making the transition to employee ownership in 2020, contact Menke & Associates today for a free preliminary analysis.
Menke & Associates, Inc. has helped over 3,500 companies successfully transition to employee ownership. Our holistic ESOP approach enables a positive outcome for the company, its employees and its shareholders. We believe ownership is powerful.
Phil DeDominicis is an ESOP strategist and M&A advisor who has guided 300+ companies through ESOP formations, financing, and transactions over 20+ years at Menke & Associates. He specializes in selling ESOP‑owned businesses to financial or strategic buyers and in helping ESOP companies acquire other businesses.
