| October 28, 2020

Evergreen fund helps Ohio coffee chain transition to worker ownership

Amy Cortese
ImpactAlpha Editor

Amy Cortese

ImpactAlpha, Oct. 28 – The Evergreen Cooperatives was launched in 2008 to create green, worker-owned and controlled businesses that create jobs and wealth in low-income Cleveland neighborhoods. The “Cleveland model,” as it’s become known, includes enlisting anchor institutions as customers, recruiting and training at-risk workers, and supporting the network of cooperatives with back-end services.

With a commercial laundry, an urban greenhouse, an energy efficiency provider and other businesses, the network has grown to 207 employees, about half of them employee-owners. Two years ago, Evergreen launched The Fund for Employee Ownership, seeded with $5 million from an unnamed foundation, to help more businesses transition to worker-ownership. “Employee ownership and patient capital can unlock many new opportunities for small and medium-sized business looking for a succession plan,” said Evergreen’s Brett Jones.

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The fund has announced an investment in Phoenix Coffee, a chain of five coffee shops and a wholesale roastery that employs 37 in Northeast Ohio. Phoenix’s employees will have a say in operating policy as well as an ownership stake in the company. They will also become part of the broader Evergreen network of businesses. 

“This new partnership with Evergreen positions us to not just survive the pandemic but to also grow and share profits with our employees, who are now also owners,” said Phoenix Coffee’s Christopher Feran, who co-led the employee buyout. 

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Growth plans

The Fund for Employee Ownership made its first investment in February, providing a long-term, low-cost loan to employees of Berry Insulation, which provides insulation and energy services, to finance a majority buyout. This month, the fund helped the company, now called BI Cooperative, acquire another local insulation business and expand its capacity. 

That deal demonstrates “all the ways that we use capital to mobilize employee ownership,” Jones told ImpactAlpha. “We help companies we invest in grow.” The Atlanta-based Kendeda Fund last August topped up the Evergreen fund as part of a $24 million grant commitment spread across four employee ownership organizations.

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