The founder of Alara Wholefoods has announced that the pioneering organic and sustainable food business will be handed over to employees this week.
The company, founded nearly 50 years ago by Alex Smith, is transferring ownership to its employees through an Employee Owned Trust (EOT) scheme, a decision believed to both strengthen Alara’s future growth and ensure the continuation of its mission-based ethos.
An EOT is a trust that allows a company to be owned collectively by its employees and run by its trustees. Their role will be to oversee the company’s leadership, ensuring it is well-managed in a way that maximises employee engagement, while day-to-day operations remain the responsibility of the management team.
Commenting on the announcement, Smith says: “Alara has been focused on sustainability for the last 50 years. Since social equity is one of the key foundations of sustainability – and of such relevance given the glaring divergence of wealth between the many and the few – going down the EOT route seems absolutely appropriate for a sustainability-focused business.
“In the early 1970s I lived for a year without money, as part of a squatter community in North London. Shortly after, I founded Alara with £2 I found in the street, the cost of getting a van into New Covent Garden where I picked up discarded fruit and veg – which I then sold in a vacant shop unit in Camden. On our first day of trading we turned £2 into £4, doubling our capital!”
The fledgling Alara wholefood shop was where Smith began to experiment with his muesli recipe, which would set the company on a course to become the country’s leading organic cereal manufacturer. Today, from its factory in King’s Cross, the company produces up to half of all the organic muesli sold in the UK, along with its heritage Alara brand.
Smith continues: “Over the years, I have grown to appreciate the real value of money – less as something to possess and more as a tool with which to effect positive change. So my priority, as Alara moves into a new phase, is that the business is given the opportunity to further enhance the values that we established right at the beginning – standing for social fairness and championing sustainability.
“My message to our customers and suppliers is that this move will strengthen the Alara business, making it more resilient and adaptable. There is real confidence here about the future of the business and the market, signified by a further £150,000 investment that we have just commissioned at our factory at Kings’s Cross. There is also real excitement about the EOT concept among the whole Alara team and we are seeing our people really stepping up. We’ve got a very strong management team in place, who I’m confident will successfully take on more of the roles that I and Katrina Smith (managing director) currently perform, making us stronger than ever as a business.
“I think it’s important to recognise the context in which we are making this move at Alara. We are currently witnessing the breakdown of democratic norms, partly because of the huge divergence of wealth in our society. So appreciating the opportunity that EOTs offer to mitigate that divergence in wealth – which they very clearly do – is one that I think should seized.
“What this all means for Alara is that the people who work in the business will own it, and that the profits of the business will go to them rather than the shareholders. In other words, the employees will gain a full share in terms of rewards of success. To me, that is an appropriate sign of true progress and social equity.”
