Dive Brief:
- Balls Food Stores announced Monday that it plans to transfer ownership of the company to its workers.
- The 25-store Midwestern chain has formed an Employee Stock Ownership Plan (ESOP), which lets employees gain an ownership interest through shares of company stock.
- “It will be business as usual and everyone’s roles and responsibilities will remain the same,” David Ball, the grocery chain’s third-generation president, said in a statement.
Dive Insight:
The ownership change aims to build on the chain’s “legacy of creating a teammate-centric culture,” the company said in a statement.
With the new ownership plan, Balls Food Stores said that eligible workers will receive allocations of company stock without having to make out-of-pocket contributions.
“By making our teammates owners, we’re preserving the company’s culture and values – while creating a sustainable growth strategy for Balls Food Stores,” Ball said. “Most importantly, we believe this will be a game-changer for everyone who works at BFS, something that will impact them for generations to come.”
An ESOP is a “viable alternative option” for grocers looking to keep a community focus that could potentially get lost after the sale to an outside firm, according to a blog post by M&A advisory firm Prairie Capital Advisors.
“If a business is sold to a third party, the likelihood of preserving both culture and legacy fades,” Christopher Silvetti, vice president at the firm, wrote in the post. “However, putting an ESOP in place means that the company will remain in the hands of the workers that helped to build it. Therefore, the culture of the company will likely remain consistent, and the values of the original owner or owners will be carried out over the long term.”
ESOPs are popular in the grocery industry for not just helping to preserve a company’s culture but also for benefitting labor retention and company financials, the firm noted.
ESOPs range in size across the grocery industry; Brookshire Brothers, WinCo Foods and Publix are employee-owned.
In 2022, JND Holdings, which runs supermarkets, liquor stores and convenience stores across Minnesota, North Dakota and Wisconsin, and Neighborhood Fresh, a small grocery chain in Northeastern Indiana, both transitioned to ESOPs, Prairie Capital Advisors noted.
Balls Food Stores began when Ball’s grandparents, Sidney and Molly Ball, opened their first grocery store in 1923 in Kansas City, Kansas. In 1975, Sidney and Molly Ball’s son, Fred Ball, assumed leadership. David Ball became president in 2000.
“My grandfather and father taught me that if you take care of your teammates, the teammate will then take care of the customer, and the customer will take care of the business,” Ball said.
The ownership change coincides with the company’s 100th anniversary.
Balls Food Stores runs 25 grocery stores under the Hen House Markets, SunFresh Markets, Payless Discount Foods and 13 Price Chopper brands in the Kansas City metro area.
