June 12, 2019

The Benefits of The Social Enterprise Model in Coffee


According to the Financial Times, a third of start-ups now strive to include positive social impact in their business model. The same article states that in Britain alone, in 2018, 99,000 social enterprises employed 1.44 million people, each working for something that goes beyond financial profit. Today’s entrepreneurs recognise that there can be significant gain in doing good, and the coffee industry is no exception.

Transparency of origin and ethics are key parts of the third wave movement. Consumers want to know about the entire supply chain and be confident that the coffee they drink isn’t just delicious, but is socially responsible.

Read on to learn more about social enterprise with some examples from the coffee industry.

Lee este artículo en español Los Beneficios Del Modelo de Empresa Social en el Café

A participant in Redemption Roasters’ programme roasts coffee beans. Credit: Redemption Roasters

What Is Social Enterprise?

Social enterprises are organisations that have the combined goals of financial profit and social responsibility. They apply commercial strategies to maximise financial, social, and often environmental wellbeing. So an effective social enterprise can’t untie its economic success from its wider impact — a model that is known as “profit with purpose”.

This model challenges established approaches to social responsibility within the business world. Ted Rosner is the co-founder of Redemption Roasters, a social enterprise that provides young offenders with roasting and barista skills. He tells me, “If you have a company and want to ‘do your bit’, it’s not a social enterprise, but a business with a charitable arm. I think a social enterprise needs to have their financial outcomes inextricably linked to their social ones, however worthy. It can’t just be a bolt-on.”

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A barista holds a cup of coffee. Credit: Fernando Hernandez

Social Enterprise Initiatives in Coffee

There is no shortage of cafés based on social enterprise. But there are also other business models that combine coffee with social responsibility. Old Spike Roastery was established in the Peckham neighbourhood of London in 2015. It provides coffee roasting training for the homeless, as well as job opportunities and support in finding permanent housing.

London-based Redemption Roasters was created when the Ministry of Justice approached co-founders Max Dubiel and Ted Rosner, asking them to offer barista training courses in prisons. Max suggested installing an industrial-scale coffee roaster and training centre inside HMYOI Aylesbury (a London prison for offenders between 18 and 20), providing young offenders with insight into more of the coffee supply chain and practical job skills.

Head roaster Marcus Wood tells me that the participants handle up to 1.5 tonnes of green coffee a week. “My role is as much roasting the coffee as it is training future roasters,” he says. “Being able to instil enthusiasm each day and enjoy exciting new coffee with a great cohort of chaps is as rewarding as it is wholly enjoyable.”

Participants roast, bag, and distribute coffee to wholesale clients, Redemption Roasters’ own coffee shops, and training facilities across the UK. There is also a barista training programme.

Participants in Redemption Roasters’ barista training programme. Credit: Redemption Roasters

How Social Enterprise Can Benefit Businesses

A key difference between social enterprises and charitable initiatives is that the self-funding model allows social enterprises to be more dynamic and elastic. By being at heart a commercial venture, a social enterprise is able to operate independently of donors in ways that charities are not.

The “profit with purpose” model can also provide a competitive edge on other for-profit startups, especially in saturated markets such as the coffee industry. The social responsibility aspect of the business is more than a marketing point – it’s something that customers increasingly look for.

The 2019 Deloitte Global Millennial Survey says that “Millennials and Gen Z, in general, will patronize and support companies that align with their values; many say they will not hesitate to lessen or end a relationship when they disagree with a company’s business practices, values, or political leanings.”

A barista hands a cup of coffee to a customer. Credit: Fernando Hernandez

Since its inception, Redemption Roasters has expanded to include an industrial-scale roastery and training centre at HMYOI Aylesbury, coffee academies in prisons HMP Bullingdon, Spring Hill, and Wormwood Scrubs, and a coffee school for non-incarcerated trainees. Its financial success is directly related to its social initiatives.

“Employing ex-offenders has a stigma attached,” Max says, “but the response from our customers has been really positive. ‘Redemption’ is part of our name, after all”.

A positive and emotionally engaging story stays with people. Customers and wholesale clients don’t just experience quality specialty coffee – they follow the story and are able to feel good about their choice as a consumer. Dedicated employees can feel like they’re making more than a salary when they go to work. And investors see that their money is making a measurable social impact.

The exterior of a Redemption Roasters café in Coal Drops Yard, London. Credit: Redemption Roasters

How Social Enterprises Can Improve Lives

As profitable companies, social enterprises can measure their success in traditional ways, including their profit margin and growth rate. But they can also evaluate their social impact as a measurement of success.

A participant in Redemption Roasters’ Aylesbury programme tells me, “I wake up and I’m so excited to get to work. I’ve never had a job before, I’ve never felt that before. And I get here and I forget I’m in prison the whole time.

“The feeling in here is what on the road [out of prison] must feel like when you’re not from bad ends,” he says.

Redemption Roasters helps its graduates find jobs in the coffee industry after release, often within its own coffee shops. As well as experiencing growth in wholesale, the organisation now has four cafes. In expanding, the company is able to train more participants, attract more investment, and contribute to lower rates of reoffending. It’s also able to sell more coffee and increase profits.

A barista pours milk into an espresso. Credit: Fernando Hernandez

Social enterprise is not using humanitarian initiatives to get rich. Nor is it non-profit charity. Instead, it’s a mutually beneficial relationship that creates genuine change within a capitalist context. So next time you choose where to take a break with a coffee or buy beans from, consider choosing a social enterprise cafe or coffee roaster.

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