7 Companies Embracing Independence With Employee Ownership

For a special holiday edition of 3p Weekend, this week we're focusing on companies that embody the spirit of July Fourth by formalizing their employees' independence. 

Once a niche phenomenon, the number of worker-owned businesses is growing by about 6 percent per year in the U.S. The number of employee-owned companies grew from 1,600 in 1975 to around 11,000 in 2013, accounting for 12 percent of the private-sector workforce.

Sometimes criticized as "not quite capitalism," Employee Stock Ownership Plans (ESOPs) are picking up steam as a way to center companies around worker collaboration, rather than the pressure of external stakeholders. So, as we light up our fireworks and let our flags fly, we salute these seven companies that took a chance on independence -- and reaped the rewards.

1. Publix Supermarkets

Florida-based grocer Publix is the largest employee-owned firm in America, employing 160,000 people that collectively hold an 80 percent stake in the company. Proving that employee ownership isn't reserved for niche markets, Publix is also the seventh largest private firm in the U.S. with $27.5 billion in sales.

2. Recology

Fun fact: The waste management provider responsible for San Francisco's 80 percent recycling rate is also 100 percent employee-owned.

"Founded in 1986, the Recology ESOP is intended to fuel our drive toward excellent service, customer satisfaction, efficiency and innovation," Recology says on its website. "It is a major reason why Recology is consistently able to attract and retain the industry's best people at every level of the company."

3. Hy-Vee

Hy-Vee operates more than 230 retail stores across the Midwest, including Illinois, Iowa, Kansas, Minnesota, Missouri, Nebraska, South Dakota and Wisconsin. With sales of more than $8 billion, Hy-Vee ranks among the top 25 supermarket chains and the top 50 private companies in the United States. It is also more than 50 percent owned by its 69,000 employees.

4. Round Table Pizza

Round Table Pizza, which operates around 450 locations across California, Nevada, Oregon, Washington and Hawaii, has a unique employee ownership story. After filing for bankruptcy in 2011, the company emerged from Chapter 11 in only 10 months, repaying all of its creditors and preserving equity -- largely due to its 100 percent employee-owned business model. In 2011, the company successfully renegotiated leases, closed 22 unprofitable stores, and improved profitability in its base business. Three years later, it's still going strong.

"This reorganization was made possible by the strength of our franchisees and the commitment of our employees," CEO Rob McCourt said in a 2011 press release. "Their collective efforts significantly improved our operating cash flow and overall business results."

5. The Cheese Board Collective

The Cheese Board Collective opened as a small cheese store in Berkeley, California in 1967. In 1971, the two original owners sold their business to their employees and created a 100 percent worker-owned business, and it has stayed that way ever since.

"The belief that every voice is central has sustained us over the years," the company says on its website. "We have never wavered from the original vision of a democratic workplace. This commitment has made it possible to constantly reinvent ourselves, while remaining faithful to our political vision, and our belief in good, honest food."

6. Bob's Red Mill

You may know Bob's Red Mill as makers of artisanal flours and whole grains. Its current site located in Milwaukie, Oregon is a 320,000-square-foot facility covering some 17 acres and produces thousands of products each day. For owner and founder Bob Moore's 81st birthday, rather than receiving gifts, he decided to give his greatest gift away — his business. He surprised all of his employees by giving them total ownership of Bob's Red Mill through an ESOP.

As he put it in a statement on the company's website: "It was just the right thing to do. I have people that have worked with me for over 30 years and each and every one of them deserve this."

7. New Belgium Brewing

From offering exemplary bike-to-work incentives to giving struggling downtowns an economic boost, we've tipped our hats to New Belgium Brewing a few times already in our 3p Weekend posts. But we're more than happy to give the company a shout-out again today, as it's one of the only employee-owned breweries in the U.S.

The company operated an ESOP for several years, with employees owning a 41 percent stake as of 2012 and CEO and co-founder Kim Jordan retaining the majority share. But in 2013, Jordan sold off her remaining stake to the ESOP -- making the brewery 100 percent employee-owned.

“There are few times in life where you get to make choices that will have multi-generational impact – this is one of those times,” Jordan said in a 2013 press release. “We have always had a high involvement ownership culture and this allows us to take that to the next logical level." She intends to stay onboard as CEO, and you'd be hard-pressed to find any negative impacts of her decision. The brewery will expand to the East Coast this year — with the construction of a $175 million facility in downtown Ashville, N.C.

Image credit: Aaron Burden/Unsplash