Can a business be both financially successful and do social good? We spoke to Alan Mahon, founder of Brewgooder and Social Entrepreneur Index ambassador, to find out.
Alan Mahon learned the hard way about the importance of clean drinking water.
In 2012, aged 23, he was working on an international development project in Nepal when he fell ill after picking up a parasite from contaminated water. After returning home, he regained his health, but the experience made a big impression on him.
“The experience brought home to me that I was lucky in the UK to have access to basic stuff, but somebody born in the same moment as me, in some place that lacked clean water, would have the odds stacked against them to have a healthy and happy life. And for me, it really focused my attention on water as an issue,’’ he says.
He went on to work for Social Bite, a business which runs social enterprise cafes throughout Scotland and which uses its profits to support homeless people into employment and housing. This experience taught Alan about social enterprise and what a powerful tool it could be.
At the same time, he was enjoying drinking beer.
He recalls: “I was getting into craft beer and that’s what me and my friends talked about and joining craft beer and water seemed to me an obvious match of both my passions.
“Social Bite showed me that it could be done, that you could build a brand that people want to interact with and that people want to support. It’s a question of brand building and business building rather than asking for funding and donations and I enjoyed that process much more, so we went down a commercial route of trying to make a great beer that people enjoyed so that would give as a sustainable revenue.’’
The result was Brewgooder, launched in 2016, an Edinburgh-based social enterprise, which sells beer and which donates 100% of its profits to fund clean water projects in developing countries. Its beer, Clean Water Lager, is brewed by BrewDog, a high profile, fast-growing Aberdeen brewer.
Alan explains: “BrewDog supported Social Bite, so we knew what they were about and that their values were in line with ours. We described what we wanted our lager to taste like and they had ideas around how we could refine that, so it was marrying our desire to make a beer that was easy drinking and that people could enjoy and that was acceptable with their technical knowledge of how to create that.’’
The first place Brewgooders chose to put its profits into clean water projects was Malawi, a country which has strong historical links to Scotland, dating back to the days of the explorer and missionary David Livingstone.
“We felt that there was the greatest need in Malawi,’’ says Alan. “Even compared to Nepal, Malawi is a very underdeveloped country and water poverty is a big issue, so it made sense for us to start out where the need was greatest and where we could develop the charity.’’
It worked with the One Foundation, a Chinese NGO, which focuses on disaster relief, and funding grassroots charities.
Alan explains: “We’re experts in making beer but we’re not experts in delivering impact, so we tend to work with people who are the best at that. Increasingly, going forward, we will be working with the Scottish government.’’
Brewgooder goes out to Malawi at least twice a year to see the work on the ground and ensure their customers’ money is being well spent. The company has been responsible for installing a 5,000 litre tank in one village and then an additional 3,000 litre tank and this has enabled the establishment of a school programme and a clinic.
Seeing the effects of the projects on the ground made a profound impression on Alan.
“For me, to see the drilling of a well is quite a powerful moment,’’ he says. “An older gentleman from the village came up to me and told me it was the first time they had had a bore hole access to water and for me that was very emotional. Another lady said she thought that God had answered her prayers.’’
He adds: “We’re all similar people whether we live in Malawi or Scotland. I think fundamentally that people just want two things: they want a better life for themselves and better lives for the people who are close to them and I don’t think that changes with the level of economic development. I think that’s a fundamental human thing and every experience I have there reaffirms that that is what those guys want as well as people back home. But luck or accident of birth means that we grow up in very different circumstances and those circumstances can limit our potential and every time I go out there it feels good to think that even on a small level we are doing something to change that.’’
So far, Brewgooder has funded directly, or co-funded, projects that have helped about 40,000 people. The business has seven employees and an expected annual turnover this year of about £900,000.
Brewgooder has also achieved a B Corporation certification, which is issued to companies which achieve certain social and environmental performance targets. There are 150 B Corp companies in the UK and 2,400 globally.
Alan says: “We’re trying to be the best business we can be and it’s not plain sailing to do that, it’s hard, it’s hard to improve, but the B Corp certificate is effectively saying we’re reaching a standard. There are 200 points going and we got 96, so there’s a lot more room for us to manoeuvre in terms of being the best we can be, but it’s our commitment to do things in a radically different way.’’
Brewgooder’s publicly stated ambition is to provide clean water for a million people.
“We have to develop the business in various ways to get to that million person target. The early signs are, that that has gone from being a naive ambition to being a realisable and executable plan,’’ he says.
And when they have reached that million person target, what then?
“We shouldn’t wish away the journey and what we can learn from it. But there might be opportunities to go for another million, there might be opportunities to do other things that we care about and to show that beer is a force for serious change and I don’t think I want to limit what we can do in the future with that.’’
The traditional - or superficial – view has been that you can either do good or do business, but you can’t do both, business is hard-headed and profit focused. This is a view that Alan dismisses.
“If you’re motivated solely by material gain and the unchecked accumulation of material wealth, you probably can’t do good. It’s just a measure of what a successful business is. If a business was to eradicate forest after forest and make money from it, is that really good business and not exploitation? If you’re making money off the back of products which are made in slave-like conditions, is that good business, or isn’t that just a giant con? So it depends what your measure of success is and if you boil everything down to money then you’re going to get a very skewed outcome in terms of what you think value is.
“For me social enterprise has the highest risk-reward ratio in business. If Brewgooder works, it doesn’t just work for me and the people who are immediately employed by us, it works for a million people in a very direct way, as well as for hundreds of thousands or millions of drinkers who get to join in that process.
“It’s not going to make you a rich person in terms of money, but wealth can be measured in lots of different ways including waking up every day and wanting to work and that doesn’t necessarily equate with money.’’
He is heartened that this is a view that is gaining traction across the business and investing community.
He says: “The fact that UBS are looking at this and supporting this is a hugely positive thing for the sector and it’s great that not only our customers are looking for opportunities to do the right thing through consuming what they would already consume but investors and serious players in investment are looking at this sector as one to watch. I think that is massively encouraging.’’