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This video goes over how Bob Moore staged the sale of his company to the ESOP. Bob's Red Mill is a family business that Bob always wanted to turn over to his employees, but didn't know how to do so until he learned about EO. It was the only exit strategy that fit Bob's vision for the company, and its values.
Small businesses with strong "family values" will find Bob's Red Mill to be a particularly inspiring story.
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Add mentionYou may recognize him from the cover of your favorite flour or oatmeal, Bob Moore, founder of Bob's Red Mill, based in Portland, OR, tells the story of his company's transition to employee ownership through an ESOP.
Did you know: Over the next 10 years, 2.5 million baby boomer business owners will be looking to transfer ownership of their business.
Does this sound like you?
In our new video series in conjunction with The Employee Ownership Foundation we will explore the benefits of transferring ownership of your business to your employees. If you're a business owner or executive, and you're looking at business succession options, please watch the videos in this series!
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Today, we're in Oregon, visiting Bob's Redmill, a company that provides wholesome foods to folks around the world.
Founded in 1978, Bob Moore and his wife, Charlie, began selling their business in 2010 to their employees through an employee stock ownership plan, or an Aesop.
The reason we're here is because over the next 10 years, we have something called the Silver Tsunami that's coming our way.
That's 2.5 million businesses that need to transition from their current baby boomer owner to something else as that current owner retires.
With that is a great transfer of wealth producing assets.
We're here today to talk about why an Aesop made sense for Bob's Red Mill, and why others should consider forming an Aesop as well.
My wife and I moved here to Portland.
We were into whole grains and natural food.
Six months, eight months after we'd been here, we were walking down a certain street, and I looked over, and I couldn't believe my eyes.
There was an old flour mill.
About The ESOP Association
The ESOP Association is the only entity that advocates for all ESOPs at the federal and national level. It provides education on ESOPs via national conferences (including the world’s largest ESOP conference) and a unique, nationwide network of chapters that combined attract more than 10,000 attendees each year. Learn more at www.esopassociation.org.
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It had a for sale site on it.
Cold turkey, I bought the thing, and it probably turned out to be one of the sweetest things I've ever done in my life.
I never looked back.
And I have all that equipment still here.
Back then, we didn't have any machinery at all, so we would actually use our hands.
That's what we could tell whether the flour was too coarse or too fine, and this was the first mill that we used to grind flour with.
We are a stone grinding flour mill.
And we grind meals, we grind farinas.
We are known for being the healthy place in your grocery store.
I think the secret formula is not taking anything out of the grain. 10 pounds in, 10 pounds out.
So we keep the weed germ, the weed brand.
That's all in our flour.
We have things like flaxy mill, pancake mix.
Granola, which I'm standing on a palette of.
Chia seeds, pumpkin seeds.
The list goes on and on.
This is the only place in the entire world.
We can see all 400 plus of our products on display in one location.
I'd been so close to my employees for so long.
I thought about some way that I could share the business with them.
I just felt that we needed a way to transition the company.
But the other two partners didn't want the permanency of staying here, like I have.
We talked extensively about what happens if we want to sell a company.
You know, it's inevitable that companies like ours end up on the chopping block at some point, and that would have not been good for me personally or our 700 plus employee owners.
People wanted to buy this company.
It wasn't because they believed in our mission of whole grains.
They just needed to take us out of the category.
What companies get sold?
They take out the people that have been there, you know, for a long time.
I'm thankful he didn't do that.
I've had so many opportunities to sell this business.
You wouldn't believe.
Why would I want to sell a business?
It's going good.
So, the journey Bob's General had to become Aesop.
It was pretty simple.
We actually started in 2010 with about 33%, designed to help as a liquidation event for Bob and the other shareholders.
The company is basically purchasing Bob's shares and the partner's shares by a private loan, Bob's being paid out over time, the partners are being paid out over time.
For us handling it in smaller bites that we could handle financially, was nice.
It was all financed through the company balance sheet and through shareholder notes.
We actually just bought the most shares that we could afford at the time.
And then we bought the final bunch in 2020.
And now we're 100% employee owned.
Everybody's all in, and the attitudes are really good.
And for me, what it meant was the ability to focus on the core business, as opposed to have to worry about what happens with the shareholders as they want to retire.
And the Aesop does offer a stability.
I never even thought of in a business.
This concept is wonderful.
It breathes life into things.
And now it's a retirement vehicle for every employee.
Employee owners get free allocations of companies stock each year, and as the business grows, they're partners in that success.
Bob's Red Mill, how may I help you?
I talked to a lot of people who are considering coming to Bob's Red Mill, and Aesop is a big selling point.
As the incoming CEO of an employee owned company, I feel like I have a huge advantage when it comes to the tightening labor market.
We just have so many people that are excited about this business model that most people don't know about.
So a lot of people have heard about 401Ks, but not a lot of people know what the Aesop does when they retire.
We introduce the new hires to all the benefits, which there's quite a few, like diversification, which is a nice benefit for our employees after 10 years, you can just turn it into an IRA. 60% of our employees have a very healthy retirement wellness score that's 41% above industry benchmark.
There's tremendous opportunity to build wealth.
Our particular esop has grown very well with our business.
It's significant, yeah.
If I just had my 401K, I would need to keep working.
We became an Aesop.
People, I think, became more invested in the business.
It's like comparing leasing a vehicle to owning a vehicle.
When you own a company, you take care of it.
I own part of the company, and I did not even have to invest any money.
I'm proud of working for this company.
Every time I see my esop certificate, it makes me smile.
The Aesop just provides such a kind of magical culture.
I mean, teamwork to the utmost.
They constantly want to know what they can be doing better to help contribute to company's success, reducing waste, recommending changes that help us improve our efficiencies, and there's a real spirit of that.
I definitely think an Aesop helps retain employees.
They would be more productive and they would stay longer in the company.
We have retention numbers in this current year that are running well over 90%.
And it's because of that engagement.
If somebody really wants to have employees that show up every day and understand the mission and believe in the mission, They should believe in their employees enough to create a esop for them.
Employees see the passion of the company they see Bob's passion, because he's coming into the office every day.
Oftentimes at shift change, he'll be downstairs here, playing his piano.
The Aesop makes you joint owners in the company.
They think different, they think of their jobs different, because you made a decision. To open your company up to everybody.
If you're out there watching this, I hope you have a chance to experience an Aesop for yourself.
And if you're a founder of a company or a CEO of a company, I hope you find a pathway to make an Aesop work for you.
If you want to learn more about forming an Aesop, please contact the local chapter of the Aesop Association, and consider attending a conference or event.
