Black Star Co-op: Preserving a Cooperatively-Owned Business Model Despite Economic Troubles
By: Ross Milvenan and David Lopez
Andy Martinec wakes before dawn, ready for a long day’s work. He puts his hair in a bun and pulls on denim cut-off shorts and a T-shirt. His job? To turn several 55-pound sacks of a grain into something many Americans love – beer.
Andy Martinec is a beer team leader at the Black Star Co-op brewpub, one of the few remaining co-op brewpubs in the nation. Despite facing economic shortcomings in the past few months, Black Star Co-op maintains its consumer-based cooperative business model and continues to pay livable wages to its workers.
“You’re coming in here buying a pint of beer with money that is going towards supporting a company that is paying living wages,” Martinec said.
A living wage is commonly defined as the amount of income needed to provide a decent standard of living. Black Star currently pays $12 or $13 per hour to its employees plus healthcare and dental benefits. They believe the restaurant industry’s typical two-wage system is unfair to the workers and frequently leaves them exploited and underpaid.
“Remuneration, or the total sum of the money that we pay to our workers in wages and benefits, is extraordinarily higher than any other restaurant in the industry,” Martinec said. “But we pride ourselves on that because we want to have a hospitable environment for our workers.”
There are currently 14 cooperatively owned breweries in the United States, according to microbrewr.com. Due to an increased focus on worker’s rights, participation, and community, co-op breweries can face certain economic obstacles that conventional breweries do not. As a result, many of them are struggling.
In 2017, the co-op experienced a 14 percent decline in sales from the previous year, according to co-founder Johnny Livesay. This is partially due to increased competition in the Austin market for craft brewing. The Texas Alcohol and Beverage Commission issued seven new brewpub licenses in Austin in 2016.
“2017 has been another challenging year for the co-op,” Livesay stated in a blog post on behalf of Black Star. “We can say things are improving somewhat, but we aren’t out of the woods yet.”
Black Star was the world’s first democratically self-managed brewpub when it opened its doors in 2010. The brewpub now currently maintains about 3,500 member-owners who share a stake in the business. The daily business operations are run democratically by a worker’s assembly, whose aim is to give all workers a voice in the operations. There is also a board of nine directors handling long-term decision-making on behalf of the organization, whom are elected every three years in a democratic process.
Livesay along with the worker’s assembly and the board of directors are reluctant to alter their business model, but realize the reality of their situation. Some members of the board have proposed having the co-op’s self-managed operational body managed by a general manager who is also an employee of the board.
“This would be a major departure from the current structure,” Livesay wrote. “But one that could be welcome at this stage in our life cycle.”
Chris Byram is the lead cellarman at the brewery, who provides assistance to the head brewer throughout brewing process. Byram has been with the brewpub for just under a year after a few negative experiences working in the service industry.
He is enthralled with the process of the cooperative and how they handle business.
“It’s about having a different shared face, you have partners and a partnership instead of a top-down management,” he said.
Byram believes the sense of community with locally owned, independent breweries is evident. Byram said brewpubs in Austin differ mightily from the large-scale, nationally known operations like Coors or Miller-Busch.
“We’ve always experienced a great community of sharing and brotherhood, everybody is sort of willing to help out … if another brewer needs grain or yeast we’re happy to help them out,” Byram said. “It’s an equal exchange. At the end of the day they’ll pay us back or give us another couple sacks of grain.”
Although the collective nature of the brewpub is beneficial for brewers and pub-goers sometimes it can complicate long-term goals and dilute the efficiency of the operation.
“Decision-making can kind of drag its feet. It does get a little frustrating at times where everybody kind of has their own view what’s best for the business,” Martinec said. “But it keeps everybody in check.”
Lily Shebell is a frequent customer at Black Star Co-op who prefers the brewery’s communal vibe as compared to some of the other larger breweries in Austin.
“There are always nice people who work here. You see familiar faces all the time,” Shebell said. “And it’s a laid back atmosphere. That is why I come here.”
Livesay said only time will tell with regard to Black Star Co-op’s future, but they are open to change as long as they maintain the needs of their members.
“We are expecting, and open to change,” Livesay wrote. “As we continue to work towards improving the co-op, please join us in furthering the co-op’s success by coming in for a pint, or a burger, over the next few months.”