Proud Pour: Drinking While Changing the World

How much do New Yorkers spend on booze? More than $10 million per night. The business potential of this alcohol market is obvious, but ever wonder what social value this market could generate? Proud Pour, a New York startup, is offering drinkers a chance to save the planet during happy hour.

Drinks for Oysters and Cheers for Change
Founded in 2014 by Berlin Kelly, a University of Southern California business school alumna and wine connoisseur, Proud Pour aimed to be more than just another wine company. It has a higher social mission: saving keystone species. Proud Pour began with oysters, which mitigate storm surge and filter about 50 gallons of water per day. Proud Pour restores 100 oysters in local water for every bottle sold.

Proud Pour has partnered with the Billion Oyster Project and other local environmental groups to restore more than 2.8 million oysters, with 1 million of those in New York Harbor. 
This achievement couldn’t be accomplished without support from customers. “Our products allow customers cheers to change and feel like they are part of a community that helps making a difference to the world,” Kelly said.

A For-profit Runs As Non-profit

Kelly considers TOMS shoes as an example of Proud Pour’s business model. For every sale, TOMS delivers a pair of free new shoes to a child in need. This one-for-one business model works well for TOMS, which is worth more than $625 million. But for a newer company like Proud Pour, that altruism might not work out as ideally as with TOMS. 
Kelly admitted her company’s current profit is almost “nothing.” The retail price of The Oyster is $20 to $25. After paying the winery, shipping, packaging, wine distributors and all incidental expenses, the gross profit margin isn’t ideal. 
“One-hundred percent of our profits go to the organizations we work with. We essentially now run as a non-profit,” Kelly said. “If our profit is not enough to restore 100 oysters, we’ll take out loans or pull out money from our personal savings to fund the company to pay the projects.”

When asked about scaling the business, Kelly admitted that she and her business partner are still struggling with getting more market attention. Without valid research on market needs, Proud Pour has a vague and broad understanding of their target customers: young working professionals who care about environmental changes. How exactly to reach out to those customers and expand their market? Kelly wasn’t sure.

The Inevitable Pain Point for Social Enterprises
Proud Pour is not the only social enterprise struggling to create a business model that is truly self-sustaining. Regardless of the company’s social impact and value, the business world rejects companies that are not profitable.
Professor Michael Pollack at the New York University Stern School of Business researches social entrepreneurship and venture philanthropy. Social needs don’t always match with business market needs, which is why creating a sustainable profit model can be challenging for social enterprises, he said. Instead, they often turn to support from foundations and subsidies. 
Pollack added that burning money and lacking a valid business plan is a common situation for startups in their first years. His suggestion to those struggling companies: “The plans change rapidly from day to day. What’s more important than a business plan is a highly pragmatic executive team that can adjust the plan based on the market needs.”