Entrepreneurs / Small Business  July 1, 2015

Left Hand Brewing asserts independence with employee stock ownership plan

LONGMONT — Left Hand Brewing Co. on Wednesday announced that the company has established an employee stock ownership plan, increasing employee ownership of one of Colorado’s craft-brewing giants to more than 50 percent.

The move comes at a time when large brewers like Anheuser-Busch are snatching up large stakes in craft breweries to diversify their offerings and some craft breweries are looking at taking on private equity to expand operations.

Left Hand officials said establishment of the ESOP helps solidify the company’s goal of remaining independent and fostering an ownership mentality among employees that the brewery hopes will pay dividends for years to come.

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“We didn’t start (the brewery) to get rich,” Left Hand co-founder and CEO Eric Wallace said in an interview Wednesday. “Our primary mission and goal is to make great beer, to participate in our community, to give back. Basically we’re on a mission from God, like the Blues Brothers. We’re bringing great beer to the world. That’s why we do what we do.”

Wallace said Left Hand was just shy of 50 percent employee-owned, including his own stake, before establishment of the ESOP. In setting up the plan, the company purchased back about 15 percent of the existing shares of the company for an undisclosed amount from a combination of existing and former employees, investors and board members. Those shares will be held in trust and distributed to eligible employees — those with the company for a year or more – on an annual basis.

Establishment of the plan, Wallace said, will help Left Hand grow employees’ overall stake as the company contributes more stock into the trust over time.

Left Hand, founded in 1993 by Wallace and Dick Doore, had about 144 shareholders before the ESOP, with the company buying out about 30 of those completely.

Wallace said Left Hand had taken on some outside investment from friends and family “to save the company” during the late 1990s and early 2000s when times were tighter in the industry and before the craft beer boom of recent years seemingly gave craft breweries a license to print money.

Left Hand officials have been working to set up the ESOP for years. The move helps the company, which has 112 employees, join the ranks of breweries like New Belgium in Fort Collins and Deschutes in Oregon that have gone the ESOP route.

Wallace said taking on private equity at this point, likely from a nonlocal firm without community ties, would go “against what I perceive to be the overall craft-brewing ethos.” He said he’s had discussions with other brewers who feel the same way.

“Our fear is that, to the extent that more and more detached capital comes in with the goal of merely making money, the worse it is for our industry,” Wallace said. “I feel it detracts from what most of us started our companies to do.”

Left Hand has been on a steady growth curve in recent years, brewing $74,500 barrels in 2014 and pulling in revenue in the mid-$20 millions. Wallace said the brewery, which has a 6,500-square-foot addition to its production facility under construction, is hoping to eclipse 90,000 barrels brewed this year.

“Money is a tool that allows us to do what we do,” Wallace said. “It’s not why we do what we do.”

LONGMONT — Left Hand Brewing Co. on Wednesday announced that the company has established an employee stock ownership plan, increasing employee ownership of one of Colorado’s craft-brewing giants to more than 50 percent.

The move comes at a time when large brewers like Anheuser-Busch are snatching up large stakes in craft breweries to diversify their offerings and some craft breweries are looking at taking on private equity to expand operations.

Left Hand officials said establishment of the ESOP helps solidify the company’s goal of remaining independent and fostering an ownership mentality among employees that the brewery hopes will pay dividends for years…

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