Behind the brand: Union Hand-Roasted Coffee, from wooden shed to speciality success
Jeremy Torz and Steven Macatonia are the founders of Union Hand-Roasted Coffee, one of the most established independent coffee roasters in the UK.
Their business model is based on sourcing the finest speciality coffees directly from farmers worldwide, who they work with long-term and ensure a fair price is paid to invest in growing communities worldwide. Founded in 2001, Union has a turnover of £16m and employs nearly 80 staff.
“We sometimes have to slap each other around the face,” jokes Jeremy Torz, co-founder of speciality coffee roaster Union, “and tell each other a few times a week that we’re not an NGO, that we’re a small commercial business and we have to make a profit.”
Torz and partner Steven Macatonia, who started out as an optician and medical researcher respectively before the coffee bug hit, have endured a 30-year journey from humble beginnings in an Essex shed, plunging their life savings into an industry with no high street backbone in the early Nineties to become one of Britain’s most successful independent coffee roasting businesses.
“It’s been hugely challenging over the years,” says Torz, 59. “When people say ‘what are you about?’ I say that if you had met me 10 years ago I was like that person on a bad dating programme and would spill my guts on the story of Union and what we wanted to do.”
Read More: Behind the brand: How ufurnish.com is creating a Rightmove for furniture sales
It has, though, been some story worth telling. Having first met in 1987, immunology researcher Macatonia was offered the chance to go to San Francisco in 1991 following his PhD while Torz left his job and joined him in the US. Soon they were researching the burgeoning Californian coffee scene and finding that people were making career changes by opening up small roasteries. They joined the Speciality Coffee Association eager to know more.
Returning to the UK in 1993 with a rudimentary business plan to open a coffee shop, the bank turned down a loan request and told them to first find success in wholesale. Refurbishing a 1,000sq ft wooden shed by Macatonia’s parents’ house in Essex, they then drove to a Vienna conference to purchase their favoured coffee machine.
Meanwhile, they had sold everything they owned – worth about £30,000 – to buy the roaster, starting stock and pay a graphic designer for a company logo of their first venture, Mac and Torz. “We locked ourselves in the shed for six months and refined what we had learned about roasting,” recalls Torz. “We called it burning and learning.”
Not having the suitable packaging to approach supermarkets, the duo next made inroads into the UK restaurant scene and approached any business which had over 75/100 in the Good Restaurant Guide. Torz says: “As one of the historical coffee importers into the UK told me when we first started with specialty coffee, the UK was a graveyard for good coffee. But we knew the public just wasn’t being served the quality we had discovered in the US. We saw an opportunity to show people something better.”
They started to see traction almost immediately from chefs, picking up deals with River Cafe, The Ivy and Harvey Nicholls. Six months after starting out, they happened upon an American husband-and-wife team who had opened a small coffee shop in Covent Garden called Seattle Coffee Company, the first to launch a Starbucks-style business. Torz adds: “When we met, we proposed to work together. We created a blend and started to supply them alongside our wholesale business.”
Seattle Coffee Company had grown to around 30 stores and, by mid 1997, a significant business was in the offing. Following a big fundraise, Torz and Macatonia sold its roasting business and merged into Seattle Coffee Company. The next year, admits Torz, was a rollercoaster to open more stores. “We were doing anything and everything to grow the roasting side.”
Initially, Seattle Coffee Company had approached Starbucks, who in turn believed that the UK wasn’t yet a coffee drinking nation. Come 1998, Starbucks had returned to buy out British-based Seattle UK, a deal CNN described as “the first thrust in a sip-by-sip sally into one of the largest tea-drinking countries in the world”. Meanwhile, Torz and Macatonia initially stayed on to learn big business. “We always wanted to learn more about the coffees, like a chef with ingredients,” says Torz. “But Starbucks was moving us away from that world.”
Eventually, they took three months out to recover both mentally and physically after two due diligences in two years. “But we still needed to go to work and we always came back to coffee,” adds Torz. Thus, the partners began to take an interest into what the supply chain looked like and used connections to travel to Guatemala in 2000.
“The New York global coffee market price at that time was at an all time low,” recalls Torz. “What we saw were families being forced off the line, fourth generation coffee farming families who couldn’t cover their costs. We thought this was broken. How do you participate in a supply chain that’s as dysfunctional as that?
Read More: How do you make a billion dollars as an influencer? Ask Ed East
“We realised there was a chance to be one side of the supply chain and educate the coffee farmers in the market value. The whole idea of Union partnership coffee was born on that trip. We sought to understand the producers’ world. We weren’t an NGO but we needed a roadmap to structure a relationship.”
Torz and Macatonia worked on a set of principles called Union Direct Trade, a toolkit for how the company would work with producers, buying coffee direct and ensuring best quality beans, and, crucially, over a number of years. They felt that this roadmap was a “powerful model”.
In 2003, Union became the first roaster to launch unblended single origin Rwandan coffee on the market following a tie up with Comic Relief. “Quality has to come first,” says Torz. “Our reason to get people to trade up to us in the supermarket is to give them something to identify as a bit better and worth it. The values that sit behind it, I think, make it a natural choice.”
“Be true,” adds Torz of Union's leadership values. “The comment that is most made by those who are with us is that they value coming to a workplace that practices what it preaches, is always true to that vision and it’s hugely personal.
“We are still involved in travelling and people in the business see the maintained commitment. We’ve also said to treat people with respect and dignity, be it in the office or thousands and miles away in Indonesia. We also never make a claim we can’t substantiate.
“There is also a lot more temptation to get involved in development, research, or studies on coffee species for climate change mitigation. That's what gets us excited.”
Read More: Sally Walker, Britain's former spy chief on her first boss
From their wholesale model in the mid-Nineties and printing a first mailing list – “talking about the blackcurrant note and people thinking we were bonkers,” recalls Torz – coffee awareness has changed inexorably in today’s market.
As far as Union is viewed, the founders note that some customers simply want to taste a great cup of coffee, others interested in the developmental side and that responsible business can deliver. “Are we about quality or ethics?” asks Torz. “Our point of view is that there shouldn’t be a value choice.”
“People are willing to explore now and listen, across coffee and food in general,” he adds. “We’ve become a more adventurous nation in the UK and whether that’s the sheer taste or the value set behind those choices, it’s just a much happier place to be.”
Watch: How much money do I need to buy a house?