Brewing an Evergreen Company
Jamie Cook, Stone & Wood Brewing Company
July 02, 2018
I was bitten by the beer bug years ago while traveling in the U.K. I picked up an odd job looking after the beer barrels in the cellar of a pub. It was fun, but it also made me realize I loved beer much more than as just an after-hours drink — I wanted to make beer my life. So when I moved back home to Australia, I found a job working for a big brewer, and eventually relaunched a craft brewery for Foster’s. While the work was rousing, I wasn’t a big fan of the corporate life, so in 2008, I started my own brewery, Stone & Wood, with three partners.
Right away we wanted to build a sustainable Evergreen business that wasn’t just about the founders living their dream. It had to be more than that. We wanted to grow a team of people who would help us create value for all stakeholders, and with whom we would share the upside.
It took a few years for us to get to the point where we could make that happen, but in 2013 we launched our employee share program. It’s a customized program where we make an annual offer to all employees who have been with us more than a year. They receive a number of shares, which are issued through an interest-free loan (paid down by dividends). Through annual valuations, these shares have grown fivefold since our first offer four years ago.
This is the cornerstone to putting our People First. By making our employees our partners, we set the stage for growth that will benefit all of us. Which is why every year, we take a group of employees who have hit their five-year-anniversary mark on a trip to Germany.
This trip isn’t just about drinking beer and having a good time — although of course there is plenty of that. The real goal is for them to see the Mittelstand — small- to midsize German multigenerational family businesses — which tend to take more of a custodial approach to their operations. One of our favorite breweries in Tettnang is run by a man named Fritz Tauscher. Fritz’s father, Fritz, inherited the brewery from his father, Fritz. This small business is very much part of the community, and it will most likely be a sustainable brewery for many more Fritzes to come. They imbue their employees with a real responsibility to make sure the business is in as good a shape as possible to pass it on. They leave it healthier than it was.
This mindset spreads to the community. In a highly fragmented market, most pubs in German towns sell only one brand of local beer as an expression of intense loyalty to these local companies. This creates a sense of pride in both the community and the owners who don’t want to sell their breweries that have been in the family for generations. We understand that pride and want our employees to feel it too.
I’ve worked at big corporations where we were driven to grow at all costs. Multigenerational businesses don’t have that pressure. They are making decisions for the long term and not for growth’s sake. On the annual trip, we like to see our employees meet with our eighth-generation malt suppliers so that they can feel this energy, this satisfaction in long-term sustainability. This, in turn, helps them take a longer view of our business, which changes how they adapt to trends and how they view the relevance of our brand. After their tour in Germany, our employees come home with a lot of stories and experiences that provide a greater understanding of what we are trying to build here.
We have grown rapidly to become the second-largest private brewer in Australia, and therefore there is a significant legacy to sustain. The four families who own most of Stone & Wood are currently working through a succession-planning process so that we can pass the torch to the younger generations.
But by putting our People First and taking a long-term view of capital investment, I think we’re going to be in good shape. And I hope that Australia views us as a family business that has long established its Evergreen roots and is a source of pride for everyone who works here and who enjoys our beer.
Jamie Cook is Co-Founder and Executive Chairman of Stone & Wood Brewing Company.