By Julie Canepa | Photos Supplied
When you travel down I-87 in our region, seeing a roadway sign for Stewart’s Shops as you approach an exit is like seeing an old friend. You breathe a sigh of relief. You are secure in the knowledge that even deep in the heart of the Adirondacks, you are about to find everything you need — gas, coffee, snacks, a clean restroom — all in a one-stop shop. That same feeling of security applies if there is a Stewart’s in your neighborhood. A gallon of milk, a dozen fresh eggs, and maybe even a winning lottery ticket are reliably within reach.
And, then of course, there’s the ice cream. The friendly staff is always there to make you a sundae, a cone or milkshake and ring you up with a smile. They are noticeably hardworking, courteous and conscientious, and if you have ever wondered why, it’s because they own the place.
Serving Our Region Since 1945
Charles V. Dake and Percy W. Dake purchased their first ice cream shop from Don Stewart in Ballston Spa, New York in 1945. From that humble, post-war beginning, the chain of Stewart’s Shops has grown to over 350 stores employing over 5,000 people in New York and southern Vermont.
Stewart’s attributes its phenomenal growth to three factors: vertical integration, employee ownership and a strong company culture. Keeping things local is not only a source of pride, but also a winning part of the company’s bottom line. The organization controls multiple stages of its supply chain and product processing, from the raw materials to the distribution and sale of over 75 percent of the final product. Their eggs and award-winning milk come from farms located less than 50 miles from Stewart’s dairy and processing plant in Greenfield, New York.
The Dake family is still active in running the business. Bill Dake is in his 80’s and keeps a hand in day-to-day operations at Stewart’s headquarters in Malta, New York. He is also the acting Chairman of the Board. Gary Dake, has worked for the family business for over 35 years. He is the third generation of Dake family members to serve as company president.
From Profit Sharing to Employee Ownership
Early on, the Dakes recognized the legacy of the family business was sustained by the people behind the counters. In 1974 they instituted a retirement plan designed to share profits with employees and they funded 100 percent of the contributions. In 2001, Stewart’s swapped the traditional profit-sharing plan for an Employee Stock Ownership Plan (ESOP).
Like the early profit-sharing plan, the ESOP is 100 percent funded by Stewart’s. The difference now is that employees own over 40 percent of the company. These new owners are referred to as “Partners.” Having a stake in the company instills a sense of pride and appreciation in the partners. They feel invested in the health and success of the organization, providing great service and initiating efficiencies. Their contributions play a part in the organization’s growth and success, and in the growth of their ESOP. President Gary Dake firmly believes the 60 percent share the family retained is worth more today due to the partners’ hard work.
Pat Suprenant
Nuts and Bolts of the ESOP
“Once you work a thousand hours in a year you are entered into the ESOP,” explained Pat Suprenant, a Vice President with Stewart’s Shops and one of three Trustees who manage the ESOP trust. That means even part-time employees are eligible to participate in the ESOP. “Employees contribute zero dollars to their ESOP account; it is all financed by the company. They are fully vested after six years,” said Suprenant. Vesting refers to the portion of the partners’ ESOP balance they can take with them if they leave the company. If employees leave before they are fully vested, the unvested balance goes back into the ESOP.
The percentage of an employees’ pay that goes into their ESOP is a minimum 12 percent of their annual salary. The return is typically better than the average 401K. Suprenant explained, “We have had very consistent double-digit growth for the last dozen years
Suprenant joined Stewart’s shortly after graduating from Rensselaer Polytechnic Institute where he majored in Management Information Systems. “I was hired a month out of college,” he said. He has been with the organization for 24 years and can speak to the value of employee ownership. “Think like a customer, act like an owner. It’s a great place to work and you have a lot of control.”
“People have retired and enjoyed life after Stewart’s through their ESOP benefits,” Suprenant added. In the sixth year of retirement, employees are required to begin selling their shares and transfer the funds into another retirement plan. After ten years, employees no longer hold company stock, allowing for the issuance of more shares to active employees.
The trustees meet at least twice a year to consider changes to contributions or plan amendments. “We review the company valuation to make sure the share value is being calculated correctly and it is fair to all the participants,” Suprenant explained.
John Howard - Photo by Jessica McCafferty
Opportunity Abounds
John Howard remembers riding his bike to the Stewart’s Shop on Geyser Road in Saratoga Springs with his sister to get ice cream as a kid. He never dreamed that years later he would briefly manage that store, let alone become a Senior District Manager for Stewart’s Shops. Howard’s territory includes the Plattsburgh market, Adirondack Park, Glens Falls region, Malone, Massena, Canton and Ogdensburg – 56 stores in all.
“If you enjoy being forward facing and giving back to the community, this is the job for you,” said Howard. “People join us from all walks of life –- college kids, parents who have two jobs and are looking for flexible hours, retired folks looking for a few hours a week.”
All partners are given the opportunity to grow if they want it. “As you grow professionally, taking on more responsibility, you also grow financially, which benefits your ESOP,” Howard explained. “Partners learn about the culture, and about how much this business gives back to the community and its partners, and it broadens their perspective.”
Chad Kiesow
Success Stories
Stewart’s Chief Operating Officer, Chad Kiesow, got his start with Bonfare Markets, a chain of community grocery stores in the Capital District. When Stewart’s acquired Bonfare, getting Kiesow was considered one of the best parts of the deal. Kiesow has grown with Stewart’s, from a 25-year-old assisting in facilities, to Facilities Vice President, to Chief Operating Officer a year ago.
“It’s exciting,” said Kiesow. “We see college kids come here for a summer job and it becomes a career. It’s moving when you hear these stories. As partners, they begin to grasp the magnitude of what we do. When they see their account balance grow and the company turns to them for advice as an owner, what began as a financial relationship transitions to an emotional connection.”
Suprenant, Howard and Kiesow are proof that the organization is truly a bottom-up management model, a trait more often found in start-up companies.
Culture Club
The return on their ESOP might seem like its own reward, but Stewart’s Shops culture of partner appreciation runs deeper than the financial. The organization holds Partner Recognition lunches a few times per year that are attended by top level executives and honor employees elected by their peers for their dedication and work ethic.
Gathering for a meal is second to the senior management team’s primary goal — listening to partners’ ideas for the future success of the organization. One partner proposal that reached the implementation stage was the Meatlover Eggwich, which combined the Sausage, Ham and Bacon Eggwiches into one glorious item. Some ideas make it, some don’t.
The lunches are also opportunities for management to ask the partners, “What can we do better?” “We are always listening,” said Suprenant. “We’re working for the shops.”
Stewart’s Shops’ legacy of giving is furthered by The Dake Foundations, which donates upwards of $9 million annually to local non-profit organizations. Their Make Your Own Scholarship program is a pool flush with 500K in funds geared toward higher education. Dependents of current employees can apply for scholarship funding if they meet certain criteria, including an 85 average or above.
In partnership with the YMCA, Stewart’s pays half of employee membership fees which can cover daycare costs, enabling parents to stay with the company and grow their role in the work force.
Slow and Steady Wins – Period
A lot of thought goes into vetting new locations for a Stewart’s Shop. “We are investing in communities,” said Suprenant. “We are not a developer coming in. We want to be there for 50-60 years.” Opening new stores and investing in store remodels in a thoughtful manner also ensures the success of their partners.
“It’s stable,” added Howard. “The organization makes rational conservative decisions that benefit our communities and our partners, both in the short and long term.”
Who’s In?
It’s no wonder the ESOP is a great recruitment tool. And it is extremely effective for employee retention, leaving Stewart’s Shops in a much better position regarding industry turnover than many of its peers. Management explained there are 199 millionaires in the Employee Stock Option Program (ESOP) and counting. At the end of the day, it’s clear that the culture of giving back to the partners that began with the Dake family over 75 years ago is still alive and well.
Stewart’s Shops
2907 State Route 9
Balson Spa, NY 12020
518 581-1200
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