Welcome to The ESOP Mini-cast brought to you by Capital Trustees. A great way to wrap up the week.
Hi, everybody and welcome to The ESOP Mini-cast. This is Brian Keisling with Capital Trustees and on today's Mini-cast we are throwing it back to Episode 43 of The ESOP Podcast where we sat down with Larry Filipski. He is the CFO of Once Again Nut Butter and President of The ESOP Association's, New York/New Jersey Chapter. In this conversation, Larry, which took place at the Hershey Lodge at last year's multistate conference with the New York, New Jersey, Pennsylvania, Delaware chapters, we were able to talk with Larry about Once Again Nut Butter and how being an ESOP has altered the path of that company in a way that some of their competitors didn't experience. So you will hear in this clip, Larry, talk a little bit about how some of their competitors had reached a point where they were bought out by larger companies in the organic foods market. And because the market was changing, once again had a choice to make and they decided to maintain their ESOP and focus instead on maximizing as much profits as humanly possible on how they can make enough money to continue their employee's benefits, continue to grow their operations, but also do things like provide healthcare for the employee owners.
Larry is a really good example of how to successfully run an ESOP company and put a focus on ESOP culture and we really hope you enjoy this clip. Afterwards, don't forget, that we will be back on Tuesday with a full episode of The ESOP Podcast and we hope everyone has a wonderful weekend. Until then, here is Bret and Larry Filipski.
And if you look at our major competitors, our competitors were companies of our size. Our biggest competitors are companies of roughly our size. You know, 10 years ago. Maranatha makes an organic peanut butter or almond butter and they are owned by Hain Celestial. Golden Boy was a competitor, they are owned by Post. And Justin's Nut Butter was one of our biggest competitors, they are now owned by Hormel. Hain's Celestial, Hormel, and Post might ring a bell with you as deep pockets! [Laughter.]
And it's kind of reminiscent, Larry, to me, ESOPs are surprisingly strong, surprising in one respect, but in the craft brewers. And at a certain point as the craft breweries developed over the last couple of decades, a lot of them reached the fork in the road and many of them sold out to the corporate parents. And so now it's, can a craft brewery that's owned by [Anheuser-Busch] InBev, which owns Budweiser really be true to their roots? And it sounds like a number of your competitors had to peel off, but you guys are on the path to stay independent?
Right. That's our goal is to remain an independent employee owned company, maintain our brand. We do actually have the number one brand in the nut butter category nationwide.
And based on which ranking?
It's based on the SPINS data is what it's called. I don't know what SPINS stands for - I'm sure it's an acronym.
No idea what that means. But we - they ranked the nut butter category and of the top 10 selling nut butters in the country, we had five of them!
We're definitely up there. Justin's is up there. They've got a couple now. Their squeeze packs became very popular. We're getting into that. But it's a changing world and the margins are squeezing. We are trying very hard as a company to maintain the phenomenal employee benefits that we have always enjoyed. And one of the big draws of working at Once Again Nut Butter, is employee benefits. Just so, so strong. Just as an example, Once Again Nut butter still pays 100% of health insurance for all the employees.
That must be wrong because nobody pays 100%.
Nobody does, but Once Again Nut Butter does!
Larry, this part of the reason I love conversations, and you're here with a couple of different hats, but with the CFOs or CEOs, is there are decisions to be made and from a business decision it would be perhaps understandable to not pay 100% because that's the trend that is going, but probably, I'm assuming that's where the employee ownership comes in and if you're going to devote dollars that benefit everybody, that certainly is a reasonable part of employee ownership. Is that sort of you?
That's right. And the, the idea with an employee owned company is not to make every penny that you can. The idea is to make enough that you can maintain your business model, keep going, keep growing, keep improving things. But you don't have to squeeze every penny out of the margins. You are able to say, you know what, we have goals. We have values as a company. And one of our values is that we will be providing a living for our employees. The ESOP is great, but it is a retirement plan.
If you're 24 years old, you're probably not all that worried about your retirement plan at this point in time. But if you're 24 years old, that means you're a about a year and a half away from being kicked off of your father's health insurance plan, and therefore you might be thinking that, what am I going to do there? And working for a company that provides health insurance, paid for, is something that would be very meaningful to you.