Steven Macatonia of Union Hand-Roasted Coffee

Steven Macatonia of Union Hand-Roasted Coffee

Wake up and smell the (price of) coffee

Union Hand-Roasted Coffee is an East London importer, roaster and supplier of high-quality coffee that insists on paying farmers way above Fairtrade prices. Steve Dyson visits Jeremy Torz and Steven Macatonia’s £11m business.

Scientist Steven Macatonia quickly became an ex-scientist after falling in love with coffee. But after launching a coffee roasting and supply business, he soon fell out with the coffee industry itself. And so he and Jeremy Torz – his business and life partner – decided to do something different to shape its future.

It was during a trade trip to Guatemala in 2000 that the pair witnessed the harsh economies of the commodities market. “The price of coffee had plummeted,” recalls Macatonia, “and we saw how this affected farmers’ conditions in Latin America, and it opened our eyes to the impact of commodity prices.

“We saw and spoke to farmers for whom it suddenly became unviable to produce coffee. They were pulling out of coffee completely and planting other crops. We saw abandoned farms. Completely mothballed. Plantations covered in weeds and grown over. The famers simply couldn’t afford to plant coffee.

“And this didn’t only hit the farmers, but all the people like pickers – and their families – whose livelihoods depended on coffee farms. This led to destabilisation, civil unrest, violence, poverty and families literally starving. What we saw in Guatemala was profound, and it seemed insane to us.

“Here was a product that consumers wanted to drink, with the coffee market in the western world really developing. Consumption was sky-high but producers were suffering in a way they’d never suffered before. It was so dysfunctional, and we knew there and then that we had to do something about it.”

UnionWhat they did sounds simple, but it flies in the face of how the existing commodities market works: they asked coffee farmers how much it would cost to produce the very best coffee. And they paid it. But we’re rushing ahead, so let’s introduce the coffee entrepreneurs properly.

Macatonia, aged 57, was born in East London, and was originally a research immunologist, helping to fight infectious diseases. Torz, 54, was born in Nottingham, and became an optician. They met through friends and have been together for nearly 30 years. Science had consumed their lives, and so Macatonia took a sabbatical to California for six months in the early 1990s, eventually spending four years there in scientific jobs. Torz joined him, working as an optician in California.

“Although I was a scientist,” says Macatonia, “I didn’t want to spend the rest of my life in it, and Jeremy and I were always interested in food and drink. California was leading in terms of fresh produce and styles of cooking, and we started to think: ‘What can we do?’ We considered a restaurant, a café and started to look into what was important. We decided it was all about the quality of food.

“I took a course as a chocolatier and patisseriere, and started playing around with café idea. But it was when I walked into a roastery café in north California that coffee hit me. Tumbling out of the roaster was the freshest, toastiest coffee – and I was fascinated. Coffee got us both excited.”

At the time, coffee qualities back in England were poor, and Macatonia and Torz saw a business opportunity. They used their remaining time in the US getting a coffee education – Macatonia spending the weekends roasting, Torz getting a job as a barista in a café – and started to put their business plan together.

“We wanted to be pioneers in the UK,” says Macatonia, “to be the first at the gates.” They came back to England in 1994 and invested in an old-fashioned coffee roasting machine, setting it up in a small wooden workshop at home in Essex.  “We aimed high. We knew we had to get a reputation. We managed to talk our way into top outlets: Raymond Blanc, The Ivy restaurant, Le Caprice, Harvey Nichols, and top society restaurants at the time. Terence Conran did tastings, and the flavour quality was definitely above the norm, but it was hand-to-mouth stuff, importing just a few sacks of coffee at a time.”

Soon after, the pair came across what was then the fledgling Seattle Coffee Company, set up by an American couple in Covent Garden. They had a good business background but knew little about coffee, and so Torz and Macatonia Ltd – the company’s name at that stage – became Seattle’s supplier and barista trainer.

“We were quite naïve in terms of a commercial awareness,” remembers Macatonia. “Six months later they opened their second shop, and then it was explosive growth. Two years later there were 30 shops. It was exciting being part of that as a supplier, but we had to upscale, buying a larger roaster and premises. To fund that our business merged with the Seattle Coffee Company – and they were the majority shareholders.”

This was in 1998, and 12 months later the coffee industry took off in the UK and Starbucks pounced and swallowed the Seattle Coffee Company. “It blew our minds,” says Macatonia. “We were part of that merger and were suddenly roasting coffee for Starbucks!”

By the year 2000, the pair discovered that being part of a big corporation “wasn’t for us” and decided to “take control of our own destiny” and leave. That was when they started to travel to understand the coffee supply market – and were suddenly confronted by how the price drop had hit farmers in Guatemala.

There must, they thought, be a more sustainable way of producing coffee, and they decided to say “to hell with the commodity market”. Instead, they entered into direct trade with farmers and negotiated premium prices for quality coffee.

“It’s not just the price,” says Macatonia. “A lot more detail has gone into it since then in terms of providing support for farmers to help them become viable producers. Ultimately we work with farmers with the capability to farm high-quality coffee in high-altitude regions. The genetic bean stock’s got to be right to taste good, so it’s about showing them how high quality works, improving their farming techniques to earn that premium for quality.”

Union 02And so Union Hand-Roasted Coffee was born, the “Union” name reflecting the ethical relationship with the farmers. Macatonia and Torz used a six-figure sum of money they’d been paid by the Starbucks takeover to launch the company in Newham, East London, buying all the necessary roasting and packing machines.

With just one employee, the partners saw revenues of some £200,000 in 2001. Today, the company employs 75 staff, and revenues in 2016 were £11.5m. It supplies hundreds of independent cafes and a string of high-profile names – from the famed Duck & Waffle restaurant in London to Waitrose supermarket, and from the Giraffe restaurants chain to The Cornish Bakery company.

The company only insists on two principles: first, it only roasts and supplies the very best coffee – from the top 2% of beans available; second, it pays all its farmer-producers an affordable rate to ensure they can grow great coffee. Not the Fairtrade rate, which is the industry’s equivalent of a minimum wage. But at least 25% above that rate – and sometimes several times that rate.

“Fairtrade has provided a safety net but only for commodity-grade coffee,” explains Macatonia. “We want high-quality specialist coffee that tastes great – delicious – so that the customer comes back to buy more. We’re trying to not give them a choice of ethics over quality. Union is about fusing those two elements together.

“In that way we’ve evolved the business much more to the needs of the producer as well as the consumer. It’s not just a tick-box of ethics but is about how we engage with each of the 40-plus producers we deal with. What’s going to make them as an individual successful in the long-term? Trust, confidence and a depth of understanding allows us to maintain quality.”

Once Union had decided on this approach, the rest sounds simple – but that was far from the case. Working with producers meant facing huge hurdles, as certain restrictive markets resisted direct trade.

“National coffee boards did not want to give farmers autonomy,” recalls Macatonia. “We had to fight and lobby for export licences for farmers we wanted to work with. And at times, we were aware that we could be putting lives at risk.

“In places like Guatemala we had reasonable conversations. But in some places, like Kenya, we weren’t successful. We were unable to achieve objectives and as a result we’ve not sourced from Kenya in eight years. We couldn’t get the finance transferred to the farmers that we were paying. We had to dig deeper and received threats we weren’t prepared to take.”

Union was successful in many more cases, and now works directly with coffee farmers in Nicaragua, Costa Rica, Guatemala, Honduras, El Salvador, Panama, Brazil, Colombia, Peru, Rwanda, Ethiopia, Burundi and Northern Sumatra.

This ethical approach has been recognised, with Union recently winning the Queen’s award for sustainable development. In a serious tone, Macatonia says: “For us, the business is about understanding the importance of the living conditions of producers, and realising the responsibility of working with farmers in the right way.”

But he gets really excited when he’s talking about the coffee itself. There’s what he calls a “sensory objective” method of evaluating coffee quality, definitively measured on an international scale set by the Specialty Coffee Association of America.

The scale is out of 100, with a score of 80-plus equating to speciality coffee. All Union’s coffees are scored 84 and above, and Macatonia says coffee of that calibre is “significantly better” than high street chains, which have an average score of 75.

He says: “The wide range of coffee flavours engages all the senses, and makes enjoying a cup a delightful, intensive sensory experience. It costs more because of the care and attention needed, resulting in exquisite flavours that the loyal customer enjoys, appreciating and recognising why it’s different.”

Macatonia describes how this experience begins with roasting: “First you engorge the aroma, but you also listen to how it’s roasting, the sound and rhythm of the beans in the drum and how that changes during the roast. Time and temperature affects the flavours of the coffee. It’s something you have to focus on and concentrate to roast correctly.”

To get the coffee just right, Macatonia believes in having the right people working for Union. People like Pascale Schuit, who has a master’s degree in sustainable development and now lives in Latin America to liaise with farmers on producing the best coffee.

Union“She’s our eyes and ears on the ground,” Macatonia says. “She has a huge say in what coffee we buy, how much and who from – shaping the direction of our coffee sourcing. We rely on her awareness of what producers are doing that needs rewarding to produce more coffee, giving them positive reinforcement that if they are making extra special efforts we’ll buy more volume.”

Aside from coffee, Union has also launched its “Campus”, an educational establishment to train people in a range of coffee skills: sensory, tasting, roasting, consistency – all aimed at refining high-quality flavours.  “Many cafes want to roast their own beans and they can use our facilities,” says Macatonia. “The Speciality Coffee Association has established training criteria for accredited courses and we have accredited trainers and certifications from foundation to professional levels. It’s all about quality, and sharing those skills with young people.

“We work with everyone from university graduates to youngsters with no formal education. They both do good jobs as baristas. But once they understand how they can make coffee taste good, they want to understand more. They have open, enquiring minds about why coffee tastes the way it does. We help them to learn and they can then get solid educations, skills, careers and futures in coffee.”

And it’s on the theme of futures that I leave Macatonia: “We want to continue growing our business. But we also want to remain excited about coffee, and to make Union more vibrant and innovative. Yes, we want to continue to grow our customer base.

“But more than anything, we want to work with more producers, seeing the positive impact that ethical but quality coffee can have on farmers and their families.”