Once a niche concept, Employee Ownership Trusts (EOTs) are now gaining traction as a strategic solution to some of the sector’s most persistent challenges - workforce retention, quality control and innovation. Of course, it is also an alternative exit strategy for business owners to consider.
What is an EOT?
An EOT is a legal structure that allows a company to be owned for the benefit of its employees. Instead of employees holding individual shareholdings, a trust holds a controlling stake in the business on behalf of all eligible employees. This model fosters a sense of shared purpose and long-term commitment, aligning employee interests with the success of the company.
Popularised by UK retail giant John Lewis, EOTs were introduced by the 2014 Finance Act, which offered tax incentives to business owners selling their companies to EOTs in that they are able to sell their shares without incurring any capital gains tax. Since then, the model has expanded into sectors like manufacturing, construction, professional services - and now, food and beverage.
Why food and drink?
The food and beverage industry faces a number of pressures: high staff turnover, a drive to become sustainable and eco-friendly, and the need for consistent quality and innovation. Employee Ownership Trusts offer a compelling solution to those pressures by creating a culture of ownership and accountability.
According to research from the Employee Ownership Association, companies with EOT structures report higher levels of employee engagement and job satisfaction, which directly correlates with improved productivity. In a sector where every detail - from recipe consistency to customer service - matters, this engagement can be a game-changer.
Case study: Riverford Organic Farmers
One of the most cited examples in the UK is Riverford Organic Farmers, a vegetable box delivery company that transitioned to employee ownership in 2018. Founder Guy Singh-Watson sold 74% of the business to an EOT, ensuring that Riverford’s values - sustainability, fairness, and quality - would be preserved.
Since the transition, Riverford has reported strong financial performance, increased employee satisfaction and a renewed focus on innovation. Staff are more invested in the company’s mission, and the business has maintained its reputation for ethical farming and customer service.
The productivity payoff
The link between EOTs and productivity is well-documented. A survey by the White Rose Centre for Employee Ownership found that businesses adopting EOTs saw measurable improvements in performance. This is attributed to:
- Increased engagement: Employees feel a sense of ownership and responsibility.
- Better decision-making: Democratic input leads to more thoughtful, inclusive strategies.
- Financial incentives: Profit-sharing motivates staff to contribute to long-term success.
Challenges and considerations
Transitioning to an EOT isn’t without hurdles. It requires a cultural shift, clear communication, and ongoing education. However, for companies willing to make this transition, the rewards can be substantial, including greater loyalty, improved morale, and a resilient business model that’s built to last.
As the food and beverages industry continues to evolve, EOTs offer a promising path forward. They provide a framework for inclusive growth, where employees are not just part of the process, they’re part of the purpose.
From the kitchen to the boardroom, ownership is no longer reserved for the few. It’s a shared recipe for success.
About the authors
Ed Savory is partner, head of food and beverages at law firm, Birketts. He joined Birketts in 2016, having spent the early part of his career working in London, and leads the corporate team in its Norwich office.
Savory specialises in corporate transactions, leading teams advising business owners, corporates and private equity funds on acquisitions, disposals, management buy-outs, fundraises and employee ownership trusts.
Having qualified in March 2012, Laura Gray joined Birketts in September 2018 as a senior associate. She is a member of the law firm’s corporate team and employee incentives team. She specialises in advising on the sale of businesses to employee ownership trusts (EOT).
