ALAN Mahon admits that “scaling up” is not usually the kind of conversation topic heard in the boardrooms of social enterprises.
Indeed, it might be assumed that thoughts of business expansion would come a distant second to fulfilling an ethical mission for those at the helm of such organisations.
However, as far as the co-founder of Brewgooder is concerned, the two can go hand in hand. In Mr Mahon’s view, the bigger and more profitable Brewgooder gets, the more investment it can make to literally transforming lives.
Mr Mahon established Brewgooder, alongside Social Bite founder Josh Littlejohn, in 2016 with a simple mission: to invest profits from the sale of its craft beer to provide clean water to one million people in places where that basic human need remains unfairly elusive.
Good progress has been made in the first two years, with projects (which range from well repairs to new installations) funded by Brewgooder having given 53,381 people in Malawi with access to clean water.
The growth of its sales, boosted by major supermarket listings, bears witness to its development, with Brewgooder on track to lift turnover by 65 per cent to £850,000 by the end of its current financial year in April. Thereafter, it is projecting annual turnover of £2.5 million by 2021.
Such expansion means Brewgooder is confident that the projects it funds will be delivering clean water to as many as 100,000 people by the end of 2019.
However, Mr Mahon believes it can do more, and do it more quickly.
To that end, Brewgooder this week appointed two senior figures from two of Scotland’s biggest and most successful businesses to its board.
Shane Corstorphine has a ring-side seat at Skyscanner, having held the position of chief financial officer while the Edinburgh-based travel search specialist underwent incredible growth, culminating in unicorn status and its eventual sale to C-trip of China for £1.4 billion. Still with Skyscanner, he joined the Brewgooder board at the same time as Patrick Hartless, global supply chain of William Grant & Sons, Scotland’s biggest independent whisky distiller and the country’s most profitable family-owned firm.
The two, who will not be remunerated for their time, join an already highly-experienced board at the organisation, where the five other members include JW Filshill boss Simon Hannah, craft beer expert Chris Miller and public relations specialist Stephen McCranor.
Mr Mahon, who had the vision for Brewgooder after tracing an illness he picked up during a trip to Nepal to local drinking water, believes the experience and know-how of the new appointments will help his organisation achieve its ambitions a whole lot sooner.
“What I wanted to do with the appointments was to super focus on the business, and how we make it the most profitable,” Mr Mahon said.
“That’s were that sort of expertise comes in very handy, because everybody who signs up to the board does not need to be convinced of why they are doing it from the mission point of view. So, if you don’t have to convince people of that, then how do you bring on people that can really make you focus on doing one thing well, and most profitably? If you can do that, you start to bring that target of one million people closer and closer on the time horizon.”
One aspiration Mr Mahon hopes to meet with Mr Corstorphine’s help is to harness technology to help Brewgooder sell more beer, and by definition lift more people out of water poverty. He is also striving to boost its transparency.
Reflecting on the challenges facing the broader charity sector, which has seen big names such as Oxfam rocked by scandal in recent months, he said the choice facing charities and social enterprises in the next decade is to “either get transparent or die”.
“Consumers will no longer put up with giving money to an invisible impact,” he said. “It has to be absolutely granular.”
Emphasising that he had no wish to comment on behaviour at other organisations, Mr Mahon added: “People want to be able to know what impact they are making and how it affects their daily lives. If the technology is there to meet that demand, that is where I want to go.”
To some extent, Brewgooder is moving into uncharted territory for a social enterprise. However, as Mr Corstorphine himself observed as his appointment was announced, the option is not really there for Brewgooder to take on the type of debt finance which commercial organisations can to fund their growth ambitions.
Noting that Mr Corstorphine’s experience of seeing Skycanner’s dramatic growth up close and personal would be a major asset to Brewgooder as it pursues its own objective, Mr Mahon said that “to really grow something needs a really laser-sharp focus on how you finance that. I would just echo what Shane said."
He added: “The second thing is how do you build a community out of that? How do you bring this beer from its base in Scotland, in Glasgow and Edinburgh, to make it relevant to people in the rest of the UK?
“We’ve never really traded on the fact we’re a Scottish social enterprise, but being a social enterprise in Scotland has been massively beneficial, because the eco-system is very conducive to giving us support. The connections we’ve had with the likes of BrewDog have been massive in allowing us to grow like we are.
“But how do we make our story relevant, and tell our story to people all across the UK, and then hopefully all across the world.
“The big challenge is to gather that community of advocates who then go out and tell our story on our behalf, because we don’t have comparable marketing budgets of bigger beer brands or even craft brewers. We need to rely on the really social element of what we do to really grow.”
Mr Corstorphine is aware of the challenge himself, but is looking forward to meeting it head on. “Scaling not for profit [organisations] is super difficult from a structuring and financial point of view,” he said. “Therefore, I’m really looking forward to working with Alan in terms of how we disrupt the standard structure for a not-for-profit to enable it to scale aggressively. You can’t raise equity in the way you can with any normal company; it is hard to raise debt. So, how do we disrupt the traditional model there?”
There are funding options open to Brewgooder, however. The social enterprise got itself up and running on the back of a successful crowdfunding campaign in 2016, when it eclipsed the £50,000 target by raising £60,000 to fund its first production run. That campaign drew backing from Sir Tom Hunter, whose Hunter Foundation made a five-figure investment.
Now it is going back to the crowd again in the shape of Jingle Wells, a festive campaign to fund the repair of 12 broken wells in Malawi this Christmas. Investors can pick from number of options, starting at £20 and rising to £50, with everything from Christmas cards to festive jumpers and, of course, packs of beer in return. Mr Mahon said the campaign marks the first time Brewgooder is using its mapping tool, which allows investors to see exactly where the funds they have provided are being deployed.
Meanwhile, Mr Mahon said Brewgooder’s Office Beer Club, which sees it provide beer to the likes of Skyscanner, PwC, WPP and Tesla for corporate events, is gaining traction. “There are lots of revenue streams we are adding because we are so innovative and disruptive,” Mr Mahon said. “We’re probably in 3,000 distribution points [in total] at this moment in time, which is incredible for a craft beer company that’s only really been brewing beer for two years. To have that sort of national exposure is brilliant.”
Six Questions
What countries have you most enjoyed travelling to, for business or leisure, and why?
I have really enjoyed travelling to Malawi to see the work we do there. It is a beautiful country with beautiful people. For leisure I really enjoyed Portugal because that’s where I feel in love with the little custard tarts they make. Next up for me would be Japan - I have never been and I love their culture and I can’t enough of sushi.
When you were a child, what was your ideal job? Why did it appeal?
I don’t remember wanting to be anything when I was young - I was too busy being young, that stayed with me until my final year of uni and I guess that led me down the road to just doing what I thought was a cool thing to do... beer and water.
What was your biggest break in business?
Being handed my first job running the Scottish Business Awards back in 2013. I was 23, no previous work experience and I was in charge of the biggest business event in the country. I was trusted with that and I handled it alright... I survived and learned to do it right the next time round.
What was your worst moment in business?
The day the first hand-brewed batch of Brewgooder started to explode in my flat because I had put too much brewing sugar in. August 7 2015. I will never forget it.
Who do you most admire and why?
My mum. She left school at 12, and worked three jobs to put me and my sisters through university. She always told me I was the best. Not that I was better than anyone else but that whatever I did was the best. And everything I have done has been down to that feeling that anything was possible.
What book are you reading and what music are you listening to? What was the last film you saw?
I am reading the Art of Losing Control by Jules Evans, and I am always listening to Wild Beasts. The last film I saw was First Man... which is the name of one of my favourite books by Albert Camus as it happens.
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