Rhinegeist Plans to Implement ESOP in 2020

Fast-growing Cincinnati craft beer maker Rhinegeist Brewery plans to implement an employee stock ownership plan (ESOP) in mid-2020 that will eventually transfer 100% ownership of the company to its employees, according to a report in the Cincinnati Business Courier.

Rhinegeist co-owner and president Bob Bonder confirmed the news to Brewbound.

“It’s what always felt right,” Bonder wrote in an email. “We had an idea and catalyzed Rhinegeist into existence, but our employees built it, and molded it into what it is today. They deserve to share in the rewards.”

Bonder estimated that the full transfer of ownership to Rhinegeist’s workforce will take up to 20 years. He added that staff-wide discussions took place to ensure that the transition was employee-driven.

“You’d have 10 different departments represented at each table, brainstorming ideas on how to create more opportunities for personal growth, recognition, and cross-departmental bonding,” he said.

Bonder, who co-founded the company in 2013 with Bryant Goulding, said alternatives to an ESOP, such as selling the company or taking on outside investment, typically “only serve to enrich ownership, typically at the expense of the employees and community.”

“That would be both disingenuous and counter to our personal philosophy,” he said.

Rhinegeist leaders have teased a potential move to an ESOP as part of their future goals. Goulding told Brewbound in June 2018 that the overarching goal for the company was “to create a brand that stands for something powerful.” Part of that was implementing an ESOP.

“But what that really means is transferring a lot of strategic decision-making from the small group of us that have charted the course, to enrolling more leadership into that conversation, and being proactive about building processes and enabling us to grow something that people have a real stake in,” he said at the time.

Rhinegeist crossed the 100,000-barrel threshold in 2018, growing 16% year-over-year, according to the Brewers Association. Bonder declined to share details of the company’s current ownership structure.

Rhinegeist is among several craft breweries that have instituted ESOPs in recent years, including Oregon’s Breakside Brewery, which announced its program in August. Others include Modern Times Beer Co., Mass Bay Brewing Company, Deschutes Brewery, Left Hand, New Glarus, Alaskan Brewing Co., Voodoo Brewery, Odell Brewing, New Belgium and Switchback.

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