2014-02-06

Co.Exist

Why This Popular Minnesota Beer Company Gives Away All Of Its Profits

Finnegans' Irish Amber and Blonde Ale don't just taste good. They fund a foundation that donates healthy food to soup kitchens. Now founder Jacquie Berglund is teaching others how to successfully scale social venture businesses.

Finnegans is the fifth largest beer brand in Minnesota, and it's available in more than 2,000 stores in the Upper Midwest. Its sales grow an average of 30% each year. But Finnegans is not your average craft beer brand. Every bit of profit raked in by the company goes back to the community--specifically, to purchasing produce from local farms and gardens and then giving that produce to local food banks and soup kitchens. In 2012 alone, Finnegans donated 110,189 pounds of fresh produce. This is a beer brand that doesn't just get people tipsy--it feeds the hungry.

Finnegans CEO and founder Jacquie Berglund never imagined she'd join the beer business. A Minnesota native, she moved to France in 1990 to get her master's degree in international relations and diplomacy, and later took a job with the OECD (the Organization for Economic Co-Operation and Development). During her tenure there, Berglund trained once-warring government officials in the ways of the market economy. "I thought that was going to be my dream job. Kind of what I realized was 'Wow, I think a lot of the major impact is happening at the grassroots level," she says. "I thought, 'Maybe I'm more of an entrepreneur.'"

In 1997, Berglund moved back to Minnesota. Her friend and local restauranteur Kieran Folliard was about to open his second pub in Minneapolis and offered Berglund a job as director of marketing. After seeing anti-hunger advocate Billy Shore speak about creating a for-profit business model to fund nonprofit activities, the idea came to her: What if she and Folliard could create their own beer and funnel all the profits towards a worthy cause?

That's exactly what they did, teaming up with Summit Brewing Company to brew their beers. Finnegans currently makes two beers, Irish Amber and Blonde Ale. Next up: a limited release beer later in 2014.

When Berglund launched Finnegans in 2000, she originally wanted to set it up as a nonprofit. "The IRS said 'You can't do that because your number one activity isn't charitable, it's making beer,'" she explains. Instead, she made Finnegans Inc. a for-profit company, and set up the Finnegans Community Fund as a nonprofit. All the profits from from Finnegans Inc. go into the fund. "The thing that I'm most excited about is that the business is sustainable," says Berglund.

Not that it's been an easy road to profitability. Up until 2009, Berglund was the sole employee at Finnegans (she had help from volunteers). She didn't pay herself for years, and one of the hardest financial periods for the company coincided with Berglund's divorce from her husband.

But Berglund got lucky. Her business was ramping up just as craft beer, local food, and social entrepreneurship started to become trendy. She believes that most people don't buy the beer because it gives back to the community; they just like the way it tastes. "If I was trying to save the world and my beer was crap, it would never work," says Berglund.

These days, the Finnegans founder gets dozens of calls a week from other companies wanting to emulate her business model. Next week, Berglund is having a "virtual happy hour" with the founder of Two Fingers Brewing, a U.K. beer company modeled on Finnegans that gives all of its profits to a prostate cancer charity.

Her advice to others in the space? "My number one thing is to figure out how to fund it. There are a lot of do-good ideas, and it's important that it's a sustainable model. It has to be scalable."

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