Our “ESOP Podcast Summer School” series continues. We’ve selected highlights from our archives featuring employee-owners that we’ll re-release all summer. (Because these episodes are from the archives, please remember that the links and email addresses mentioned in the podcast may no longer be valid.) As you enjoy summer school, we are working hard behind-the-scenes to bring you new content and services that are better than ever, starting in the fall of ‘19!
Our featured guest is Aaron Moberger an employee-owner at Mass. Bay Brewing Company, known for Harpoon Brewery, UFO Beer, and Clown Shoes Beer. We discuss why he volunteers to be a New England Chapter officer at The ESOP Association, and what employee ownership means for an Independent Craft Brewer like Harpoon Brewery.
"There’s probably a lot that you know about beer and the brewing process. And there’s probably a lot that you don’t know about the people behind what it takes to create some of your favorite liquid. Here at Mass. Bay we’re proud to say that we’re Employee Owned. So what does that ACTUALLY mean? We tend to brush over it when we’re talking about the details, but in fact, those details are petty important.
In short, when a company becomes employee owned it means that every person who works full-time at Mass. Bay owns a piece of the company without having to invest their own money to purchase stock. Our Employee Stock Ownership Plan (ESOP) was established in July of 2014, when rather than joining the crowd that every week seemed to be selling out to industrial brewers or private equity, we decided to double-down on remaining independent. Each year, additional shares get allocated to individual ESOP accounts based on repayment of the loan we had to take out to make all this happen. So what does that mean for us?
It means that we’re all invested. Literally and figuratively. Each of us here at Mass. Bay is invested in the success of our company. We want to see our products succeed and our customers have positive experiences when they try our beer or enjoy a pretzel in the Harpoon Beer Hall. The bottom line? The ESOP is a great milestone in helping Harpoon Brewery to stay independent and dedicated to our mission: brewing great beer and sharing unforgettable beer drinking experiences." [Source: Harpoon Brewery, Who We Are]
You can hear the original October 30th, 2018 release of this episode in full in "Episode 49" of The ESOP Podcast.
Here's a transcript of an excerpt of a key point in this podcast about the relationship between employee ownership and company culture (starting at the 27:10 mark in Summer School Episode 5).
Bret Keisling: So talk a little bit -- earlier in this recording, you had referenced that one or two things were employee initiatives, which I assume is tied to it being employee-owned.
Aaron Moberger: Yes.
Bret Keisling: So talk a little bit about the effects of being an ESOP on Harpoon. How's it changed your company?
Aaron Moberger: What's, yeah, I had a really good culture to begin with, so it's, um, it wasn't like flicking a switch or something like that, where all of a sudden we're employee owned and we've got an ownership spirit. It's an ownership spirit before that, but of course you need the, you need the ESOP component as well.
Bret Keisling: Right.
Aaron Moberger: So I would, I guess, it just sort of augmented a lot of the good things that were there already. People care more, people will figure out how to use our continuous improvement program. You know, or we've really, we had initiatives before that we formalized the program, track it. I think the results are very tangible that, you know, just talking locally in our cellaring department in Boston we've increased our efficiency by 50%.
Bret Keisling: 50%?
Aaron Moberger: 50%.
Bret Keisling: Wow, very impressive.
Aaron Moberger: Yeah. Honest to God. Yeah. Thank you. It's all people's ideas. That's the coolest thing! We were doing -- before we were an ESOP company -- we struggled to put six batches through our finishing system, so the centrifuge and a lot of times that filter in a day, and we do eight, nine or ten now. We did eight batches of beer through a filter head twice and it was a challenge, before that, and we just did 12, we did 11 a couple of times in our sleep. Really it's, we could go probably the whole week on one filter head now.
Bret Keisling: Wow.
Aaron Moberger: And that wasn't for many new pieces of equipment. That was from a cellar operators figuring out better ways, grassroots better ways to do things.
Bret Keisling: Which is what we like to see in employee owned companies -- we like to see it in any company -- but obviously our focus is on ESOPs, where the employees understand with some skin in the game they benefit from the results. So finding a way to bring down expenses or innovate your processes is very much a natural component of being an ESOP.
Aaron Moberger: Yeah, it's a natural component. It's something that people, I would say people have a natural drive to do. I think the constructive part of it is having a system that helps to people to use that and the best way possible. You know, if people do have these ideas and certainly they know, you know, we can, we can make a very safe assumption that people who are doing those jobs every day know how to make them better. They don't have an outlet for that. It can be frustrating, you know? And it's, it's far, as far as I know, there's no perfect system. So, you know, we've had to work hard to get to the point where we see those types of results and it's still not perfect. We've come up over the past several years, just the ones that we've tracked, 200 ideas and 60 are completed. So we're at, we're at a 30% which I have no idea what world class is in terms of idea, systems, but 30% seems to leave an awful lot of room for improvement.
Bret Keisling: Right, right.
Aaron Moberger: But obviously there's still tangible results in people take a huge amount of pride, you know, our folks take a huge amount of pride in what they've done and it really helps me get... So, when the market's shifted and you have 7,000 breweries for the first time from six, five, you know, for a couple of years ago. And you have to continually innovate to keep people interested and get, you know, really good faith in consumers to stay relevant and all that kind of stuff. If we hadn't made a lot of those improvements, which we're doing for the sake of doing them and you know, making our jobs better. Adding shared value, now of course, as a result of those things, it would have been much more difficult to keep up with the adjustments that have had to make since then. You know? So if we, if we couldn't put eight batches through, you know, in a day and all of a sudden we had to make all these other changes, you know, maybe we would, at that point we would have been putting two quads of IPA through and it was sort of a standard thing and now we might be doing a quad of IPA and before other batches. So there's transition time between those things that we would have had to absorb it if we weren't out ahead of it, it would have caused problems.
Bret Keisling: And ultimately, and it's just human nature. In traditional companies that aren't employee owned, the end of the work shift comes, you're not necessarily motivated to think about it, care. You know, you take your check, we assume, you know, put in honest service for the check. But there was that extra component of wanting to go further.
Aaron Moberger: Yeah.
Bret Keisling: Because you have a piece of it.
Aaron Moberger: Yeah, absolutely. And that's a great point about continuous improvement, is that people need some time away from their normal work to be able to come up with the thought for these things. So whether that's after hours or whether you do enough of them, that people can find chunks of time during the day around their normal work to be able to do it. It's a necessity, you know?
Bret Keisling: Sure.