Urban beekeeping reimagined

Bruce Croxon (00:03): Hi, and welcome back to the Export Impact Podcast, brought to you by Export Development Canada (EDC). I’m Bruce Croxon and I’m the host of today’s podcast. On this episode, we’re speaking with a very unique entrepreneur and business owner, whose innovative company is making a real impact on urban biodiversity while successfully expanding across international markets. 

Alex McLean is the CEO and founder of Alveole, a company that started as a passion project in 2013 and has grown into an international leader in sustainable urban beekeeping. Alveole partners with commercial buildings to promote biodiversity and educate communities about the role of bees in our ecosystem. Alveole is a certified B-Corp company working to balance purpose and profit, while driving real change in sustainability.

Alex is here today to discuss his experience in expanding Alveole outside of Canada, the challenges encountered along the way and the significance of being a purpose-driven business in the export industry.

Full disclosure, I’m the founder of Round 13 Capital and we’re an investor in Alveole.

 I’d like to begin today’s episode by acknowledging that we’re recording from my office in Toronto, which is on the traditional unceded territory of Many Nations, including the Mississaugas of the Credit, the Anishnabeg, the Chippewa, the Haudenosaunee, and the Wendat Peoples, and is now home to many diverse First Nations, Inuit and Metis. We value taking this moment to deepen the appreciation of our Indigenous communities—wherever we are—and to remind ourselves of our shared debt to Canada’s First Peoples.

Welcome to the podcast, Alex. We’re excited to have you join us today. Let’s start by talking a little bit about Alveole. For those who don’t know or haven’t heard, let’s start by explaining why bees are so important to our natural environment. You’ve heard all the puns, but I can’t resist. What I’m asking is what’s the buzz on bees?

Alex McLean (02:11): Thanks for having me, Bruce. I’m excited to have that conversation today and kind of dive into bees, but also the whole story of export because that’s been our main activity for the last couple of years. When we talk about bees and the business, the place that we’re focused on is urban biodiversity. The intention is to create cities that are more interesting for biodiversity and that will sustain different species and make the urban environment more healthy. The business itself, we’ve been focused on essentially working with real estate owners and transforming their buildings into places that will be better for biodiversity. We’ve done that through working with bees and installations that we’ve done on their sites. The ultimate idea is that we’re using real estate, which is a big portion of our built cities, but transforming it so, it actually has a positive impact on biodiversity instead of a negative impact.

Bruce Croxon (03:00): Picking up on that, how exactly does it work then? I’m a commercial business owner. I may or may not know already that bees have a positive impact on the environment. I’ve got tenants who I’m trying to keep in the building, especially these days, or attract new ones. I’ve heard of Alveole. We get into a discussion, what is it that you’re going to do for me as a building owner? How does it work?

Alex McLean (03:21): Building owners are starting in a few areas, like there’s the element of sustainability and making buildings more interesting from environmental perspectives and that’s pushed by tenants wanting that from their building owners, as well as investors who are investing in those buildings and want to have assets that are more sustainable. On the other side, you have another problem, which is the engagement of tenants and essentially trying to keep and retain tenants inside the buildings that these owners have. We charge a recurring fee to do an installation of these bees. In our case, there’s 50,000 bees that we’ll set up on that building and what we’re trying to achieve with that installation and then the maintenance that comes after that is to get those two outcomes on the sustainability side and on the engagement side.

On the sustainability side, what we’re doing is by installing the beehives, we’re suddenly engaging people about the importance of bees and how important they are in good ecosystems and what they all need—all these different things that are critical. We get some very specific data as well, which I think we’ll get into a bit later, data on how that building compares to its peer’s, in terms of biodiversity and harmful chemicals, and all these different things that we can identify from the installation that we do onsite.

On the engagement side, we built a whole platform where tenants can participate and understand what’s going on with this installation on their site. We do a series of workshops, we do virtual engagement, we built a whole program so the tenants in the building have this unique activity that they have at the building and that they would choose potentially this building over another because of this happening at that building.

Bruce Croxon (04:52): Amazing. Great description. I’ve got it on a couple of buildings that I’m in and I can tell you it works exactly that way. Everyone gets really excited when it comes time to harvest the honey. There’s a real pride and involvement there, so bang on. Backing up a little bit, entrepreneurship: Did you always know that you were going to try and do your own thing and go your own way and maybe tie in thoughts about entrepreneurship with what got you started in bees in particular? I know the story goes back a long way, but I think the audience would love to hear it.

Alex McLean (05:25): I started my first very unofficial business probably when I was 10 or 11 in elementary school and then a few more in high school and a few more after that. Never anything that really worked out, but different things that were an indication that this was something that I wanted to do. With the two business partners who founded the business with me, we had two of these smaller businesses before that. We’re actually musicians. One of our businesses was as a travelling band and then, we ended up seeing around event organizations. I think it’s been part of the journey. The reason I got into bees is actually a family reason. 

By accident when I was 16 years old, I stopped by my uncle’s farm in the middle of Manitoba and he was running a bee operation. We worked there that summer. It wasn’t planned and wasn’t particularly fun to start with, to be honest. It’s hard work with getting the bees started, but I really fell in love with bees, with the relationship with ecosystems, even with the kind of agricultural world, too. I grew up in the city and this was kind of my first exposure to more of the rural realities and so, I fell in love with that and started going back every year and eventually said, “Let’s bring this to cities. Let’s actually have this not disconnected from the city, not something that happens in a rural area, but actually bring nature into cities and have people connect with it and then do the programs that that we’ve talked to before.” It's been a long journey.

Bruce Croxon (06:43): Was your uncle sort of ahead of his time on the environmental side, or was he really just in it for the honey and you took it from there in terms of connecting the dots?

Alex McLean (06:52): He was a biologist, so I think there was always this interest in: We’re not just like production machines.

Bruce Croxon (06:57): We’re doing some good here.

Alex McLean (06:59): Yeah, we’re doing some good, here’s how it’s all connected and we’ll get into the data piece. But what’s interesting about bees is that it’s not like a chicken coop where you open it up and feed them. They survive based on you bringing food to them. Bees will survive from the ecosystem around them, so they can feed themselves and get their own water and get their own food and do all that; meaning, they’re extremely dependent on the environment and they become a good indication of how positive the environment is around them. So, is there enough food diversity? Is there toxic chemicals? You can get an indication of that inside the hive and he’s the one that taught me that and I got really excited about that side.

Bruce Croxon (07:33): It’s so funny when I’m hearing you say this, I’m thinking about tying it back to being an entrepreneur. Bees are kind of the ultimate entrepreneurs, right? Like they sort of go out and if they don’t get it done that day, they don’t survive, or the hive doesn’t survive versus being in an ecosystem where you get everything handed to you as if you were working for something. Anyway, I digress. Listen, a lot of Canadian companies don’t get outside their own borders. You guys are international, 70 cities, seven different countries. It’s a significant achievement for many companies to get outside their own borders. When did you first start looking at international expansion and what motivated that decision?

Alex McLean (08:11): I’ll backtrack a little bit. When we started, we were in in Montreal and that was kind of the beginning of the operation. I think probably on Year 2, it became clear that this would be a model where we’re in cities and we’re in densely populated cities. We’re not necessarily increasing the radius and serving 500 kilometres from that city. We’re a dense radius serving mainly downtown areas. So, it became clear that we’d have to open up in new markets. I think Toronto was probably on the list after that. 

I don’t think there was necessarily a clear moment of, “Hey, we’ve worked on the model and let’s go and expand.” It was brutal to expand, to be honest, because we hadn’t properly sorted out the model when we started. But we opened in the U.S. after five years of operation and before then—the three years before—had been Toronto, Calgary and Vancouver. It seems like we’re always adding new markets. I was clear that in order to be successful, it wasn’t going to happen in Canada necessarily. It was going to be in the U.S. and ultimately, in Europe and build out what can be 100 very successful cities—not a couple. 

Bruce Croxon (09:10):  I know you’ve had a relationship with EDC for quite some time and their mandate is to support companies, like Alveole, in global expansion. What were some of the challenges you faced when expanding? How has EDC helped out? How have they been as partners? How have they helped Alveole grow?

Alex McLean (09:28): It’s been mainly through help with capital and understanding that the expansion to new markets wasn’t the craziest thing, right? There are lenders out there, especially for small businesses, that will say, “Hey, get the model right. Expand into your local cities if you need to, and get really solid before you take a big risk and go outside into the U.S. or elsewhere.” EDC never had that reflection. It was always, “Go and do the big markets” and that’s how a big company will be built. As much as some organizations said, don’t do that until you’re completely ready, EDC had this whole other line of, you know, export is this whole other business. You can spend 10 years getting organized in Ontario or Quebec, but it doesn't mean you’re suddenly going to be ready when you open up in the U.S. market. A lot of companies fail at that as they’re going into the U.S. market. We decided we wanted to go early and EDC was very supportive of that and supportive in terms of capital that they lent us to in order to do that.

Bruce Croxon (10:21): We’ve been working together for a couple of years now and I’m not sure that I’ve seen the political geo-economic situation quite as disruptive as it is right now. I actually noticed that just shortly before we went to air here, that EDC is recognizing this and getting behind some of the companies that may be having challenges with the unpredictability of our neighbours in the south, in particular. Do you see the relationship with EDC becoming even more important as we move forward, particularly over the next four years?

Alex McLean (10:55): For sure because I think the team at EDC takes the pulse of how things are going in different places and are quite advanced in terms of understanding where markets are going and the programs that follow. I’m sure the relationship will continue with EDC. They’ve been extremely supportive. When I speak more about the business, it’s been very interesting to be actually active across the 70 cities that you’re matching in seven countries. And export has helped us be stronger at home, as well because we get an understanding of how things are going in certain European countries, or how certain areas in the U.S. are doing. If we’re looking to the future, we’re looking five, six, seven years down the road. Getting the inputs from all these different areas, especially in our space, which is kind of rapidly evolving, the sustainability space, the biodiversity space, it gives us this better lens on how we need to evolve our products, so they actually can fit in the future. Export for us has always been a very big part of how we see the future, how we can organize our products, so they will sustain whatever changes are going to happen.

Bruce Croxon (11:55): We have the added advantage that the bee issue is a global issue and the environment is a global issue and it shouldn’t have to be presented all that differently in terms of the challenges we’re facing. Let’s talk a little bit about what we’ve alluded to a couple times in this conversation that the bees aren’t just producers of honey—they’re sort of mini data gatherers: Out they go and there’s so much to be learned by what they find. Alveole has progressed in its ability to analyze what these little data keepers are bringing back. So, let’s talk about what you’re finding out and what your vision is and what we’re actually doing now to take that data and incorporate it into a much bigger framework, in terms of biodiversity and data feedback to the markets you serve.

Alex McLean (12:44): OK,  I’ll take a quick step back. Our business has been around for about 10 years now, and for most of those years, the issues around nature and biodiversity have been a little bit more on the awareness spectrum.

It’s been a little bit more about let’s get people aware that nature is important. Let’s get people aware that biodiversity is actually declining and that this is a really important theme when we think about the environment in general. It’s carbon emissions, but obviously, we also have to support our biodiversity. Most of our growth has been what I was saying earlier, like the awareness and the engagement and the education and doing these programs so that we can get people more aware about these issues.

The last couple of years that’s changed a lot. We actually realized that even from the days with my uncle, because bees are collecting a lot of food, a lot of resources around the building, they’re actually getting a lot of interesting data about what’s around that building. And that data we used at the beginning just for our own operations to say, we can actually have health-care colonies and optimize the way we’re managing the bees in this way. That data was interesting for that. But as the conversation has shifted, in terms of nature and biodiversity, to be a little less just about awareness, but now more about action: What do we do to make our cities increase biodiversity by 5%, 10%? There’s all these laws now that are coming out, one that’s critical is in the U.K. (United Kingdom) called biodiversity net gain.

Any new development needs a net gain of 10% of biodiversity from the baseline of before that building was built. That has shifted a lot in the last two years. It’s been a lot more about data, a lot more about action and we’ve shifted and said, “Well, all this data that we’ve been collecting and that we’ve been using to get information on how we can optimize the health of the bees, we can now use that to go back to building owners and cities and say, ‘Here are the actions that you need to take in order to boost biodiversity.’” Some examples are pesticides. We get a really accurate picture of the pesticides that are in a very short radius around the bees where we do a sample.

Bruce Croxon (14:38): 10 km I think, if I remember right.

Alex McLean (14:41): From the abundance that we pick up in the samples, we can say at a much shorter radius of that. If we’ve picked up different pesticides, we can go back and say, “Here’s chemical 1 and chemical 2 and chemical 3 that you should remove from this environment, so we can actually have better biodiversity.”

Bruce Croxon (14:58): So, you can get it right down to the environment footprint that the actual customer is sitting on.

Alex McLean (15:04):  Exactly. The recommendations become super rich and there’s also been a kind of global framework that came out in the last year and a half. The taskforce on nature-related financial disclosures, which is essentially saying they’ve quantified the impact on nature and they said, if you can measure this showing that you’re taking these initiatives, has financial benefit. Now, it’s the whole spectrum. If we get the data, we can actually recommend and action certain elements that have come from the analysis and they get points and certifications from these fireworks that are coming out. It’s the full spectrum now.

Bruce Croxon (15:36): So, putting myself back in the building owner seat, I’m becoming a more sustainable business based on the data I’m collecting. It becomes more appealing to my tenants, my rents go up, I create value.

Alex McLean (15:48): And you can attract the investors who are asking for this. If you’re fundraising like you’re used to doing and you’re going back to investors, they have today more than just financial criteria, right? They have the environmental criteria and they’ve included biodiversity in their environmental criteria. So, they’re saying, ”OK, if I’m an investor and an asset owner in the U.S., I want to make sure they’re going to invest the financial return, but I also want to make sure that they’re improving the environment, including biodiversity and we’re now able to give them the data to do that. So, you’re attracting better tenants, increasing rents, increasing the value of the building, but we’re also able to raise more capital. You can do that on faster cycles.

Bruce Croxon (16:23): Got it. One of the things that attracted Round 13 to Alveole—right from the beginning—was the focus that you had on the core values of the company. Obviously, the mission of the company is very consistent with and conducive to having internal core values that support a higher purpose. What advice would you give to startups and small businesses looking to expand globally while staying true to their values. It’s often you either don’t get the chance to grow as big as you guys have had and then it sort of goes away as an issue, or you find sometimes, the core values get lost as you expand and you lose control on who your next hire is going to be. They don’t actually get to meet Alex potentially. What advice would you have for people who are ambitious, looking to expand, but also want to stay true to their purpose and values?

Alex McLean (17:15): The advice I’d have is what seems like a bit of a soft and fuzzy exercise of codifying those values and saying, this is actually the stuff that we stand for and this is actually stuff that we don’t stand for and this is the stuff that's really important for us, in terms of the values and the behaviours and how people interact within the business and externally. We spent a ton of time in the early days—my co-founders probably thought it was too much, saying, when can we do some real work? When can we go back to expansion? When can we go back to speaking to customers? I insisted a lot. I really wanted to get our BHG, our values, our mission. I wanted to get that stuff really solid. 

And as much as in the early days, I think my co-founders have said, what are we doing here? Like, why are we spending all this time on this? I think today it's the only thing that holds us all together and that means we have the right people in the business. It'’ as you said: When it’s not you that’s necessarily hiring and when it becomes a hiring team and a people and culture team, or even external hires or external firms, it can become very murky of what’s actually important to bring into the business in terms of the values. When we’ve made mistakes on that, nothing slows us down more than someone who’s not the right fit and by the time you realize it, you’re four or five, six, seven months in and you have to undo a lot of this stuff. It just has such a negative impact on the business. 

I’m really happy that we’ve spent all this time upfront to build that and now, it’s part of our onboarding. It’s part of our screening. We celebrate values. I even have compensation tied to values now. We’ve put it across the board and it’s really helped us get the right people, especially when you’re going internationally and you’re adding Dutch people to the business, you’re adding California people in the business, you’re adding French people in the business and the common set of values to make sure that across the board people are going to always be different. It’s not a question about having the same people, but a common set of values has been really critical for us.

Bruce Croxon (19:05):  I’ve seen a lot of businesses in my career—both as an operator and an investor—and  it’s rare that you come across one that’s been able to achieve your size, but still hold the core values so dear. So, it doesn’t happen by accident. A lot of thought went into that and it’s very heartening to hear how you’ve built it into your operating system.

Congratulations again on the journey and thanks very much Alex, for sharing your insights today. It’s been fascinating to learn about Alveole’s journey. I think the audience will really enjoy hearing about this very unique business and how you’re making an impact worldwide in urban biodiversity and we wish you all the best moving forward.

Alex McLean (19:48): Thank you, Bruce. It was nice to be on.

Bruce Croxon (19:50): Thanks for joining us today on the Export Impact Podcast. If you enjoyed today's episode, we’d love for you to subscribe, rate, and leave us a review on your favourite streaming platform. Until next time.