Worker-owned Bay Area food businesses are on the rise. Is it a turning point for the industry?

After a decade of building Local Butcher Shop from the ground up, co-owners Aaron and Monica Rocchino started to hit a breaking point with the Berkeley business.

For years, the sustainable meat shop off Shattuck Avenue had been the couple’s entire life. If the security alarm went off in the middle of the night, they got out of bed in San Rafael and drove to Berkeley to turn it off. Work emergencies kept them from picking up their daughter from dance class. Any ambitious, creative business ideas they wanted to pursue mostly got swallowed up by the daily grind. It wore on them.

But in 2021, as the pandemic was devastating small businesses throughout the Bay Area, they stumbled on a way to step away from Local Butcher Shop while keeping it alive: worker ownership. They decided to sell it to their employees.

“Longer term, it’s a much more sustainable way to run a business,” Aaron Rocchino said. “The entire shop was on my and Monica’s shoulders. No matter what happened, when it happened, where it happened, it was us.”

Local Butcher Shop is part of a new wave of Bay Area food businesses converting to some form of worker ownership, including Reem’s in San Francisco and Oakland, San Francisco-based Ritual Coffee and Bette’s Oceanview Diner in Berkeley. It’s a major shift spurred in part by the pandemic and owners’ search for a more sustainable and equitable future in the restaurant industry.

The Bay Area has a long-standing culture of cooperatives and employee-owned food businesses, such as Berkeley’s Cheese Board Collective and San Francisco’s Rainbow Grocery. According to a 2016 study by Oakland nonprofit Project Equity, the Bay Area then had 56 worker cooperatives, the most in any metro region in the country. Some new businesses are starting life as cooperatives, such as Fluid Cooperative Cafe inside the La Cocina food hall in San Francisco.

But these moves by older businesses to worker ownership may signal a turning point for a model that is still misunderstood and dismissed in many industries. Advocates see worker ownership as an alternative to closing a longtime business, as was the case with Bette’s diner. Baby boomers nearing retirement age own half of private businesses in the Bay Area, according to Project Equity. It’s a statistic the nonprofit fears will lead to a wave of closures without concerted action, including converting to worker-owned businesses. The model is also a strategy to address wage gaps, employee satisfaction and other issues.

Project Equity, which is currently working with 10 food service companies including Ritual and Local Butcher Shop, has seen an increase in employee ownership inquiries.

“This is the future of business,” said Ritual founder Eileen Rinaldi. “I believe in this movement as something that is good for small businesses, individuals, communities, and ultimately the world.”

Merl Goodsell (left) breaks down a bird while former owner Aaron Rocchino puts a tenderloin out for display at Local Butcher Shop on Nov. 11, 2021. Rocchino has since sold the business to his employees.

Jessica Christian/The Chronicle

Of the four businesses changing their ownership models, Local Butcher Shop is the only one that’s officially transitioned. Five former employees who are now worker-owners spent most of 2021 learning about shared governance and deciding how they wanted to structure the business. They also shadowed the Rocchinos, who brought on Project Equity to guide the process.