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Baltimore-based Union Craft Brewing becomes employee-owned company

Tapping into a growing trend, Union Craft Brewing has started offering its employees ownership in the Baltimore-based craft brewery.

The nearly decade-old brewery is to announce Tuesday it offered ownership grants last month to six employees.

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Under the new “Beer Unites Employee Ownership Program,” full- and part-time employees will be offered a stake in the business when they reach their fifth anniversary. The brewery, the first craft brew producer to open in Baltimore City as the industry was taking off in the state, said it is the first Maryland brewery to offer such an employee benefit.

“Culturally it makes sense for us,” said Adam Benesch, co-founder and CEO. “We want to have a culture where everyone is heard and opinions matter. On the economic side, it’s very important to us and the employees that they should benefit economically from the growth they contribute to.”

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It’s a step Benesch said in March that the brewery has been considering in the wake of a sexual harassment scandal that led to the departure of an employee there last year.

“If there is a silver lining to all this, that will be a silver lining …,” Benesch said in March, “we’re going to have ownership available to put in the hands of the people that have been working hard at creating the company that we that we all want and desire.”

Programs in which employees become part owners, help make business decisions and earn a share of profits have become increasingly common as employers look for ways to reward and attract employees and plan for the future.

“We’re not going to be working decades from now … and wanted to get ownership in people’s hands who would handle that charge,” Benesch said.

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Baltimore-area businesses that have turned to employee-owned models include A Few Cool Hardware Stores, owners of several Ace Hardware stores in the city and Washington; pizza restaurant Joe Squared, which transitioned into a co-op; and Taharka Brothers ice cream. The partnership model has long been popular with professional firms in architecture, engineering and law.

Benesch and co-founder Jon Zerivitz had long believed such a model would make sense as a way to plan for future growth of the brewery, which employs 41 people. The idea became possible recently after they acquired a prior partner’s shares.

The brewery’s program works much like an employee stock ownership plan, the most common form of employee ownership. Typically, a company creates a trust fund and can make tax-deductible contributions of new shares or cash to buy existing shares. The trust also can borrow money to buy new or existing shares. Shares are allocated to accounts of employees. When workers leave or retire, the trust buys back shares at the current value.

Union Craft, a limited liability company, distributes units of ownership rather than stock.

“Employee ownership at Union is an amazing path forward for the entire staff,” said Jenna Dutton, a marketing and design manager who became one of the first employee owners along with the head brewer and managers in sales and packing.

About 6,272 U.S. companies have employee stock ownership plans, covering more than 10 million active participants, according to the National Center for Employee Ownership.

Union Craft became the first production brewery located within the city limits in three decades when it opened on Union Avenue in 2011. Since then, the number of local craft beer makers in the state has grown from a few dozen to more than 100.

The business expanded in 2018 into a former Sears warehouse on West 41st Street, where it established the Union Collective complex. The beer maker runs a large tap room there and other vendors include Earth Treks, The Charmery, Baltimore Spirits Co., Vent Coffee Roasters, Well Crafted Kitchen and Wine Collective.

The brewing company sells beer mostly in the Baltimore area but distributes elsewhere in Maryland as well as in Washington, Northern Virginia and Delaware.

Baltimore Sun reporter Christine Condon contributed to this article.

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