March 4th, 2020
In 2010, Bob Moore, founder of the whole grain flours and cereals company Bob’s Red Mill, celebrated his 81st birthday by giving his employees the gift of ownership. Ten years later, the Bob’s Red Mill ESOP is going strong with roughly 600 employee-owners—three times the number they had when the ESOP began—and the company is reporting record sales. And Moore, now 91, is still happily working full time as President.
The proud employees of Bob’s Red Mill celebrate their first year of employee ownership in 2011
Moore, whose face adorns the instantly recognizable packaging that is a mainstay of the cereal and baking aisles in grocery stores around the country, founded Bob’s Red Mill in 1978, when he was 49. He had been a serial entrepreneur who ran everything from gas stations to a goat farm before retiring to a seminary in Oregon to study the Bible in Hebrew and Greek. Moore and his wife, Charlee, had only been there a few months when he happened upon an old stone-grinding flour mill for sale on one of his daily walks and it changed his life.
Just three years after starting Bob’s Red Mill, Moore implemented a profit-sharing plan, even though it would still be years before the company would have stable and strong enough sales to consistently have profits to share. Moore’s commitment to making his employees feel like they had a real stake in the company’s success was clear from the start, and Bob’s Red Mill’s employees have been receiving a portion of the profits in every paycheck for almost three straight decades.
“I wanted everyone to share in the profits of the company. It has increased paychecks by a nice amount. I’m more proud of that than anything,” Moore said.
When the time finally came for Moore and his partners to start thinking about an exit strategy, his commitment to his employees was once again his guiding principle.
“In some ways I had a choice,” Moore said in 2010. “But in my heart, I didn’t. These people are far too good at their jobs for me to just sell it.”
The ESOP currently owns a roughly two-thirds majority of Bob’s Red Mill, and Moore plans to make the company 100% employee-owned by the end of the year. While the ESOP was designed as a retirement strategy, Moore has remained a highly active and beloved leader for the company. In fact, he only stepped out of the CEO role and took over the presidency in 2018.
“I may have given them the company,” Moore said when the ESOP was first put in place. “But the boss part is still mine.”
At Menke & Associates, we meet a lot of business owners who are interested in selling to an ESOP, but who feel hesitant because they are not quite ready to retire and worry that they will be making themselves obsolete if they no longer have an ownership stake in the company.
Bob Moore and the success of the Bob’s Red Mill ESOP are a perfect demonstration of two key facts:
First, you can sell to an ESOP gradually and still have a major impact. Many owners choose to sell 100% right from the start. Others prefer to sell a piece at a time as they get closer to retirement. Factors like the business’s corporate structure and relative tax advantages can play a major role in that decision, but the owner’s readiness to give up control of the company they built is also an important component. Bob Moore chose to sell gradually, but the ESOP had a major impact on Bob’s Red Mill every year along the way because it was a powerful indication of how much the company values its employees.
Second, Moore is living proof that, even if you are no longer the majority shareholder in the company, you can continue to be an engaged, important, and highly respected leader for your business. Even with his seemingly boundless energy, Moore isn’t going to keep working forever. But until the day he finally decides to retire for good, he will continue going to work every day alongside people who know just how much he trusts and appreciates them, and who are motivated to repay that trust by making the company that bears his name as successful as possible. That sounds like a pretty good way to spend the last portion of your professional career.
At Menke, we work with every one of our clients to design and implement an ESOP that fits their specific needs, wants, and goals. Will your business be the next big ESOP success story? Contact Menke today for your 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.
