New Bar Blends Profit with Purpose
2 April 2013 at 4:59 pm
A new Melbourne bar is serving up beer from developing countries with the profits going to projects in the country of origin. Jackie Hanafie puts the spotlight on this emerging social enterprise.
“We don’t want to be branded just as a social enterprise. We think of ourselves as a business, just a pure business doing some good.”
Simon Griffiths is modest. Unlike most social businesses, Griffiths made the conscious decision not to market Shebeen – Australia’s first Not for Profit bar – as a social enterprise.
He says that the idea for him and his business partner, Vernon Chalker, was to create a first class customer service experience.
“Everything has to be great to get people to come back and over time they’ll realise that there’s this extra underlying thing that’s just part of our business,” Griffiths explains.
“We don’t want to just rely on that and as a result we don’t want to be ramming it down people’s throats that this is who we are and what we do.
“We want to be saying, come in for something that tastes great and enjoy yourself and then come back and realise that there’s a lot more going on.”
Griffiths says he finds social enterprise model terms “really confusing”.
“I think what we do is much more simple than that. We’re just a hospitality business that donates 100 per cent of the profits that we generate to seven different organisations that come from the 11 different countries we source our products from,” he says, rather boldly.
“One of the tricky things about social enterprise is that it can mean one of a hundred different things. I think it’s a term that gets misused and used in a bunch of different ways that don’t make sense.”
Shebeen's Simon Griffiths sips a drink at the newly opened bar in Melbourne. Picture: Jackie Hanafie
After years of hard work and planning, Australia’s first Not for Profit bar, Shebeen, finally opened its doors to the public.
Shebeen takes its name from the illegal drinking dens of South Africa and Zimbabwe that sprang up during apartheid.
The way it works, in theory, is simple. Buy a beer that’s been imported from a developing country and the profit will be funnelled back to projects in that beer’s country of origin.
Cosily tucked away in Melbourne’s Manchester Lane, everything you see in the bar is second hand, mostly sourced from salvage yards. The chairs are made from an old school’s woodwork class while the tables were put together from old hoarding board from construction sites.
There’s a friendly feel to the bar and you’re instantly drawn to its vibrant setting – the colourful walls and chairs, the comfy looking couches, the enthusiastic bartenders and the free popcorn served with your beer.
British-born Griffiths was raised in Perth but moved to the East Coast to study engineering and economics at the University of Melbourne.
He spent time travelling and working in the developing world before the idea of Shebeen took hold. Despite people telling him his idea wouldn’t work, Griffiths said at no point did he believe them.
“I couldn’t see how it wasn’t going to work. I think that society’s really ready for what we’ve presented.
“I’d had the fortune of seeing Vernon operate his other businesses so I could see that it was possible to kind of tweak the business model.
“But you need to run a successful business to make that work otherwise you’ve got a ‘no profit’ business not a Not for Profit business,” he explains.
Griffiths says that raising capital to get the project off the ground was a tricky piece of the puzzle.
“Because we’re 100 per cent Not for Profit, everything we generate gets donated and as a result we didn’t want to be paying back investors,” he explains.
“We wanted to create a philanthropic opportunity for our investors so they would essentially put $10,000 in and we’d turn it into $30,000 dollars out the door in our first three years of operation. As a result we thought that it was not sensible for us to give a financial return on the capital that came in so that, I guess, made it a little bit tricky for us.”
While Shebeen is the first of its kind in Australia, a similar ‘philanthro-pub’ called Cause opened its doors in Washington D.C. in September last year.
Shebeen has a range of drinks all from developing countries on offer. Picture: Jackie Hanafie
Griffiths says that early on they decided that money they would generate would go to waste if it wasn’t going to the absolute smartest and best organisations overseas.
“We spent a lot of time thinking about how to do that and how to make it work in order to be as impactful as possible,” he says.
“We looked at who we thought were the smartest guys globally and found people like the Mulago Foundation in San Fransisco and Jasmine Social Investments in New Zealand, and a few others.”
Griffiths says they brokered a deal where Shebeen works with these foundations, investing its profits into projects which had already been carefully selected.
“We have very similar investment guidelines and objectives to the foundations we work with and as a result we hand select different organisations out of their portfolios that we’ve put capital into,” Griffith explains.
“So six of the seven partners that we work with now come from The Mulago Foundation and Jasmine Social Investments portfolios and the seventh comes from Draper Richards Kaplan Foundation.”
Griffiths expresses keen enthusiasm for the concept of measuring social impact saying it’s “extremely important” to his business.
“All of the organisations that we work with have impact reporting built into the relationship they have with us so it means that over time we can look at what impact has been created by the organisation and then tie that back to the sort of capital that’s come out of our operations,” he says.
“We only work with organisations that are measuring their impact so that we can go back and report retrospectively on what’s happened but also have some sort of indicative measure of what we achieve as well.”
He cites Kickstart – a microfinance organisation based in Africa to which Shebeen profits support – as great example of impact measurement.
“Kickstart’s measurement shows that basically for every donor dollar they’re spending, a farm that’s using their pump generates $12 of profits or wages off the use of that pump. So we get really clear metrics that increase income and improve life expectancy through the organisations that we’re working with that allow us to report back on how the capital’s been used. So we tie that into all of our funding relationships,” he explains.
While many other social enterprises work with a number of volunteers in an effort to keep costs down, Griffiths made the decision not to use volunteers, due to the high risk involved.
“You never know what quality of output you’re going to get – so we only work at the moment with skilled staff,” he says.
“We did that because we wanted the quality of service and product to be first class. In order for this to be sustainable it had to be an exceptional hospitality experience, no part of it could feel like it was second rate otherwise it was just something that just wouldn’t work in the longer term.”
Griffiths says Shebeen has exceeded all expectations in the short time it has been open and is on track to do the projected $200,000 of disbursements in the first 12 months.
He says the team has been “blown away” by the support the bar has received in its early days in operation.
“The idea of social enterprise wasn’t really in the mind of your regular Australian when we first started,” Griffith says.
“People just weren’t ready for the idea of blending profit with purpose and that’s something that I think now has kind of become accepted.”