London isn’t exactly starved for coffee but one start-up has found a growing corporate caffeine appetite, now catering to offices of major firms like Vice Media and JustEat. Pact Coffee MD Paul Turton explains why the service works to Compelo reporter Felix Todd
Walking along the streets of London, finding a coffee shop is not a difficult task.
But for Paul Turton, the UK capital’s corporate caffeine scene - that is, when an office takes delivery of coffee on a subscription basis - is “diabolical”.
That’s something his company is trying to change.
Pact Coffee is a London-based start-up that has racked up 40,000 regular subscribers while focusing on the consumer market over the past six years, but has been developing a B2B proposition since November last year.
Already, major companies packed with young employees like JustEat, TransferWise, Trustpilot, Trainline and Vice Media have signed up to receive freshly-roasted “specialty coffee” via the new Pact at Work scheme.
“We’ve gone from strength to strength since starting Pact at Work, and the idea has proven extremely popular with offices around London,” says Paul, who is managing director.
“We are simply providing office workers with some of the best speciality coffee in the world, which has been ethically and transparently sourced for a fraction of the price that consumers would pay at a coffee shop on the way in to work – normally about 35p, compared to sometimes upwards of £3 from a coffee shop.”
Catering to caffeine-obsessed London
“There is still a huge demand for it, particularly among office workers who are used to what has become known as ‘diabolical coffee’.”
Pact Coffee has grown quickly since its launch in founder Stephen Rapoport’s kitchen in 2012.
Armed with a coffee grinder, a set of envelopes and a passion for coffee, Stephen had a dream to introduce the UK to better coffee at home.
The company sources its coffee directly from farmers after travelling around the world to visit growers, and taste hundreds of different blends.
The consumer-facing business accounts for 90% of its £6m turnover, with customers able to choose from three coffee plans ranging in price from £6.95 to £9.95 - or between 46p and 66p per cup.
Pact now has 42 employees, eight of which comprise a dedicated sales force, and has made £500,000 profit thus far in 2018 - with expectations of being £1.5m in profit by the year end.
Changes at the top
The latest growth spurt is down to the promising beginning experienced by Pact at Work, which started at the same time Paul joined the company - a move that coincided with Stephen stepping down as CEO and moving into a chairman role.
Paul, who has a background in B2B retail sales and management, saw the opportunity for a corporate offer.
In return for a monthly fee calculated per employee, corporate customers have specialty coffee delivered to their office door, along with free installation of a machine for distributing the hot drinks.
How will you be enjoying your coffee as we sail into the weekend? On his visits to Colombia, our Head of Coffee Will here has enjoyed a fair few stovetop brews with the owners of El Silencio, whose coffee this year is our current Micro-lot offering with tantalising flavour notes of rhubarb. The gloomy weather here in London is making us wish we were in warmer climes too…We’re packing up the last of your orders before the Bank Holiday weekend, then we'll be shut until Easter Monday, but our Customer Champions will be here to help on Easter Saturday. Until then, happy sipping!
Posted by Pact Coffee on Thursday, March 29, 2018
Paul says: “While we do offer the customer the ability to go on a ‘plan’ or regular weekly order we would not see ourselves as a subscription provider in the B2B space like we do in the consumer market.
“A key component of our sales pitch to corporate clients is the tastings we organise. We organise these for both small and large audiences, and are great fun.
“Some of the most successful tastings we have run is when we have organised breakfast tastings for entire companies with in excess of 100 people.
“We normally showcase three of our interesting and crowd-pleasing coffees and the levels of engagement are fantastic as it allows the customer to quickly see the benefit that having great coffee in the office can have on company culture.”
Pact’s sales cycles are also flexible to the customer’s needs, and can vary from one day to two months dependent upon the complexity of the buying process and whether it needs to provide machinery for the office.
Straight from the source
The market competition for satisfying London’s caffeine craving is fierce, with Nespresso, Lavazza and the Office Coffee Company all vying for the same market.
But Paul says: “Our direct trading is something that sets us apart from our competitors here – we trade directly with 148 farmers and we’re committed to maintaining a great relationship with each of them.
“Our head of coffee, Will Corby - who I’d call one of the country’s top experts on coffee, I seem to learn something about coffee from him every day – visits farmers and explains our proposition, and we go from there.
“We make sure the beans are defect-free and have a quality score of at least 80/100 before cupping.
“We have a strong corporate social responsibility (CSR) commitment and our corporate customers love that - they like to know they’re buying from someone who’s ethically responsible.”
Paul says the coffee machines his company provides are “the best in the marketplace” as an added bonus for customers.
A healthy habit
“We make sure to explain the health benefits of drinking coffee to our customers, too,” he says.
“It can help protect against type two diabetes, as well as reduce the risk of heart and liver problems, and some forms cancer.”
Pact is also involved in the coffee sourcing scene in more than just a buyer’s capacity.
Will Corby has been head judge at the Columbia Land of Diversity competition, which unifies the regional coffee quality competitions in the area.
Looking to the future, Paul adds: “We are working on a number of areas to develop.
“One of the most exciting will be to offer ‘self-serve’ plans for small offices (two to 20 people) via the web where people can sign up to a machine and coffee bundle offering, allowing customers to have control of regular ordering through their account on the site, like we do with our consumer subscription offering.”