Case Study Organically Grown Company

Founded in 1978, Organically Grown Company (OGC) has been a leader in sustainable, organic agriculture for over 40 years. What began as a farmer-run nonprofit has grown into one of the largest independent organic produce distributors in the U.S., playing a key role in shaping organic regulation and trade at regional and national levels.

Recognizing the impact of ownership on its mission, OGC has evolved through multiple ownership models – from a nonprofit to a farmers’ cooperative, then an S-Corp with employee ownership, and later an Employee Stock Ownership Plan (ESOP). However, as the company grew, it faced a common challenge: how to transition founders and employees while maintaining its purpose and independence—without selling or going public.

In 2018, OGC adopted the Perpetual Purpose Trust (PPT) model under Delaware law, enabling the company to buy back all shares from its stockholders. Over time, the Sustainable Food and Agriculture PPT will own 100% of OGC, ensuring permanent independence. The trust operates with shared governance and financial participation among stakeholders – including farmers, employees, customers, investors, and the community. A trust protector committee, elected by stakeholders, safeguards OGC’s mission and appoints its board of directors.

OGC also established a cash flow waterfall to distribute profits in alignment with its values. Funds first support business operations, followed by debt payments. Preferred stockholders receive a 5% baseline dividend, after which profits are shared with employees (capped at 20% of prior-year net income) and reinvested into grower services and community initiatives.

By embracing steward-ownership, OGC has secured its independence and long-term commitment to environmental, social, and economic impact – free from the pressures of short-term profit maximization or exit-driven investor expectations. This model ensures that the company’s stewards, representing a broad range of stakeholders, can uphold its purpose while equitably sharing in its success.