Massive, humongous, gargantuan news here. Like, really super gargantuan. Probably our biggest news ever, in fact. MODERN TIMES HAS BECOME AN EMPLOYEE-OWNED COMPANY! Here’s the press release we issued today, with some additional comments from me at the end:
SAN DIEGO, CA (July 7th, 2017) – Modern Times, one of the fastest growing craft breweries in the country, is thrilled to announce that it is now employee-owned. Through the repurchase of shares held by outside investors, 30% of Modern Times is now held in an employee stock ownership plan. At only 4 years old, Modern Times has become the first brewery in the state of California to become employee-owned.
"This is my single proudest achievement as Founder & CEO of Modern Times,” said majority owner Jacob McKean. "I'm supremely excited for our deserving employees, who have shown an almost perverse degree of dedication over the last 4 years. Now, they will benefit directly from the company's success as co-owners. This is as it should be. Making Modern Times an employee-owned company gives me a sense of satisfaction that is somewhere beyond joy."
Employee ownership is a logical extension of the company's existing values and culture. Modern Times fosters a highly collaborative work environment that prioritizes the well-being of its employees, continuous innovation, the exceptional quality of its beer and coffee, and an unwavering commitment to business ethics.
"My hope is that this will point the way forward for other businesses in our industry and beyond,” said McKean. “Our trajectory shows that a company can grow at a meteoric rate while handsomely rewarding all of the people who made that growth possible; in fact, we show that it is necessary. Our values and culture are competitive advantages that have propelled us to where we are today. Modern Times is proof that a start-up brewery can compete and win in the craft beer market without selling out, all the while taking outstanding care of our employees and rewarding our investors."
With several ambitious projects on the horizon, including bastions of leisure and sundry weirdness in downtown Los Angeles and Anaheim, the move to employee ownership is also intended to help attract and retain exceptional talent. As the company opens groundbreaking new breweries, restaurants, and cafes, Modern Times will be both promoting existing employees and hiring new talent to staff the rapidly growing business.
"We already have very high employee retention, but becoming an employee-owned company will only make it more rewarding for talented people to build their careers here,” said McKean. "And I'm extremely excited to see the kinds of people we can attract with this equity program."
Employee ownership is just the latest in a long list of stellar benefits offered by the company. Modern Times provides high-quality health care, very competitive salaries, unlimited paid time-off, a two-month paid sabbatical after five years, and a guaranteed take-home minimum wage of $15 per hour, along with loads of free beer & coffee.
While the company is 30% employee-owned today, it is the goal of Modern Times to work towards 100% employee ownership.
The Modern Times ESOP (employee stock ownership plan) transaction was made possible by the talented team at Ambrose Advisors, who facilitated the deal structure, valuation, and lender selection. Neil Brozen of Ventura ESOP Fiduciary Services has been retained as the Trustee and will oversee the ESOP in an independent role.
Whew, well that is the coolest thing I’ve ever announced. It took an enormous amount of time and effort to make this happen (which I’m very relieved to be done with!), but it has already proven to be worth it. This is the biggest and most important step we can take towards living the values we espouse, and that is always worth doing.
Our next task, and in many ways the more important and more challenging one, is building a culture of ownership. We want Modern Times employees to be owners in practice, not just on paper. While everyone who works here is already enormously committed, ownership is something else entirely. It means having the tools and desire to set the strategic direction of the company. It means making tough decisions based on our values and priorities. And it means being responsible for the continued health and viability of the company every single day (and night.) Building that capacity in all of our employees is the task that lies ahead.
Without building an ownership culture, employee-ownership can end up feeling very abstract to employees. Sure, they financially benefit from owning the company, but that doesn’t mean they’re passionate about the company’s direction. If they’re not, things can go wrong in all kinds of ways. Avoiding those pitfalls requires that we deepen and formalize our collaborative culture. We have already begun laying plans for how to do that, and I’m every bit as excited for it as I am about formulating new beers.
As I said in the press release, I want our move to employee-ownership to set an example for others. If we can do this after only four years in business, anyone can do it, and I firmly believe that employee-ownership offers the best deal for everyone involved. It ticked every box for us: achieving an outstanding return for our investors, maintaining our independence, rewarding the employees who have made our success possible, enhancing the collaborative culture that's so vital to the company, and creating a sustainable ownership structure that will replace me when I'm ready to move on. And there’s a massive tax benefit, too, which means more money for growth and efficiency improvements. Oh, and we formed a new bank relationship as part of this deal that gives us access to vastly more financing than we had before. No other options came close to offering all of that.
Another point I want to make is that investing in human resources is investing in growth. It's shortsighted to think that only buying equipment or real estate is investing in growth. The people who work at Modern Times are our single most significant competitive advantage. Investing in motivating them, retaining them, and attracting more people like them is the smartest strategic play we could make.
Alrighty, that’s all I’ve got for now. I’ll publish a few more blog posts in the coming weeks and months addressing different aspects of this. My hope is that by spreading this information and demystifying the process, we can begin welcoming more breweries and coffee roasters into the employee-ownership club.
Cheers & thanks,
Modern Times Beer