Obama, Beer, and Health Care Reform

Here is a frothy business story that the Obamas might enjoy on their family vacation on Martha’s Vineyard, where I am writing this. Insiders told me that the President is looking for light beach reading on his getaway. But knowing the President’s gravitas, I think he will be thinking about health care reform, even while kicking back.

My story involves health reform (the number 1 agenda item); Kenya (his father’s home); global business (which arouses public suspicion but can be a constructive force for change); government tax policy; and beer (the racial peace-making beverage of choice at the White House for Obama, Gates, Cambridge police officer Crowley, and Harvard professor Gates).

The beer part is the most surprising. How common is it to put “beer” and “health” in the same sentence?

Beer, health, Kenya, business, government, and Obama-pride came together a few years ago, soon after a local beer company, East Africa Brewing Limited (EABL), was acquired by Diageo, the global alcoholic beverage giant. Diageo, itself formed from a merger, was tainted by being in a “sin industry” but was earnestly trying to transmit a set of high global standards to its operations worldwide, including responsible drinking and responsibility to communities. When values and incentives are aligned to make “good for society” a part of the core mission, companies can make significant positive contributions to health and other social outcomes. This is the theme of my new book SuperCorp, and the beer story I tell in SuperCorp demonstrates this principle in action. It could give President Obama a lift (if not a high) on his vacation.

Beer is extremely popular in Kenya, but the government used to tax it at a very high rate, making licensed beer unaffordable for many people in a poor African nation. An underground industry of illicit stills, often in homes and garages, provided beer made from ingredients of varying quality, including unsafe water, and held the highest market share. Illicit beer often made people sick — bad hangovers, diarrhea, bacterial infections, and blindness, making lost productivity a problem for the economy and high rates of blindness a problem for Kenya.

EABL adopted Diageo global standards and set about to build the market. Providing a better substitute for illicit beer seemed a way to do well by doing good. EABL entered into negotiations with the central government for a tax reduction in return for a high-quality affordable beer that would, coincidentally, contribute to better health and a stronger economy. Next the company sent a team to travel the country to recruit respected shopkeepers, pub owners, or community leaders as distributors. The beer was launched under the brand name Senator Beer at just about the time that Barack Obama was elected to the U.S. Senate. Senator Beer soon became known informally in Kenya as “Obama Beer.”

Consumers loved Senator (Obama) Beer and switched from illicit to the quality-guaranteed brew. It was a big win-win-win. More tax revenues flowed to the government on a volume basis despite the reduced tax-per-drink. Blindness rates went down, and so did hangovers costing lost work days. Diageo won profitable market share, a grateful new distributor network, and an African prize for the health outcomes.

At the White House Beer Summit on race, only one American beer was featured — Sam Adams, from Boston Brewing Company. President Obama drank a Bud Light, owned by a foreign conglomerate. As a patriotic American, a Sam Adams fan, and a friend of founder Jim Koch, I hope that Boston Brewing will outdo Diageo by creating a President Beer with a health theme. Maybe a U.S. beer in honor of Obama can have a pineapple flavor for his birth (fully documented) in Hawaii.

Yes, Barack, you can have your beer and sip it too. You can forge positive public-private partnerships. You can urge companies to direct their product innovation toward solutions to social problems. You can harness the enlightened self-interest of companies that want to be seen as good guys — companies that manage through values can be enticed to contribute to the public agenda in positive ways. That’s the power of a SuperCorp — using its clout to produce things that improve lives. Many products, even unexpected ones from unexpected industries, can play a role in improving health.

Let’s raise an Obama vacation beer mug to toast new models for the future. Skol, l’chaim, a votre sante, and, of course, good health.