Brewing up a storm: Pact Coffee’s Stephen Rapoport talks Brazil, bikes and changing the coffee industry

 
Harriet Green
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Stephen Rapoport
There is one person at Pact Coffee who knows more about a cup of joe than anyone else in the company – and it’s not founder Stephen Rapoport: “I just can’t keep up with our head of coffee, Will. His knowledge is astonishing.” This is difficult for Rapoport, who is, by his own admission, “pretty competitive”. But despite the knowledge gulf being “so huge,” Rapoport is a connoisseur in his own right – when we met, he spent a good few minutes showing me how an AeroPress works, and coursed through a chemical explanation for the taste of the particular coffee he made me.
He founded Pact, which roasts and delivers, often at very short notice, high-quality coffee to your door (in a letterbox-friendly package) in 2012. A serial entrepreneur – Rapoport sold his last business, Crashpadder, to Airbnb the same year – this is the “first time [he’s] got to run something with a greater mission and purpose than shareholder return.”

FILTERING THROUGH

Currently, he and Will, who also serves as the company’s one-man supply chain, are in Brazil on Pact’s first buying trip. “Brazil sells a lot of coffee, but it’s not necessarily of the quality we want. There are 25m coffee farmers and pickers worldwide and, for the most part, it’s an unskilled and unpleasant life. The only way we can fix that is by changing people’s consumption habits. Buying Fairtrade means your coffee can’t be produced by prisoners or kids.” Last year, Pact bought coffee at 151 per cent of the Fairtrade minimum price. “I’m not comfortable with the idea that you can separate price and quality. Pact is considerably more expensive, but it’s worth it.”


On a busy day, the startup sells a tonne of coffee (Source: Greg Sigston)

A bag of Pact coffee costs £6.95. And on a busy day, the startup sells a tonne of the stuff. While it delivers ten per cent of the bags itself – and on bikes – it has grown a customer base across the country, with four loyal buyers in the Outer Hebrides. Beans are ground at the company’s Bermondsey roastery and are sent within a week. The startup has an open-door policy for customers. While I’m there, next-door neighbour firm FarmDrop pops round to make a milk/coffee swap. Apparently, the same thing also happens with the craft beer company across the way.
Adverse to too much numbers talk, Rapoport uses “smiles” as a metric for the number of cups of coffee the firm delivers to customers – this calendar year, it’s set to hit 12.2m. Rather than see his competition as other high-end sellers – like Monmouth, Square Mile – it’s the big boys that concern Rapoport. “One of the things I’m proudest of is that, out of the 150,000 people who have tried our coffee, of those that have remained customers, 30 per cent were drinking instant coffee beforehand. If you’re drinking instant, it’s a fundamentally worse experience – and it will also have been handled by someone who has a pretty terrible life.”


Beans are ground at the company’s Bermondsey roastery (Source: Greg Sigston)

TWISTS AND TURNS

Rapoport’s biggest missed opportunity, he says, is not growing faster: he set up with three people working in his kitchen, but waited a year before he took on a fourth person specifically to pack coffee.
Usually, he moves more quickly. Having embarked on a degree in business at Birmingham University, he quickly found himself disenchanted with the course: “I went in not having really considered anything else. And for me, it was, unfortunately, a complete waste of time.” While struggling through the academic side of things, he set up a package tour company with a classmate. “It was extremely successful. By the end of our third year, I’d learnt the administration side of things, and how to set up and grow a business. We had a team of 30 sales people. It was then that I realised how much I like working with bright, hungry people.”


Pact has four loyal buyers in the Outer Hebrides (Source: Greg Sigston)

Now, Rapaport doesn’t look at what degree someone’s got when hiring. “We’ve got 50 per cent of people doing degrees in the UK, and it might not be the right thing for them. Something has got to be done about that. I always wonder what my business would have been if I’d had the confidence to drop out.” But there’s a quick afterthought: “that said, I did meet my wife in my second year... there are always pros!”

CARVING THE FUTURE

In August, Pact will unveil its Nespresso-compatible capsule. “We’ve been working on R&D for nearly a year. It’s really hard to get good-quality coffee out of one of these.” Pact customers have also called for a coffee shop, but where to focus growth is a careful call for Rapoport: “It’s a constant battle with me – between impatience and being pragmatic. One day, I think ‘oh, I’ll book a flight to New York’. Other days, I think Ireland looks interesting. But there’s a mass grave of promising British companies on the East coast of America; I want to be careful there.”
And for Rapoport, making this business work is vital: “Ultimately, I’ve always been drawn to entrepreneurship because I want to leave a legacy; I want to leave the world slightly better than I found it.”
The voucher code “pound” will enable City A.M. readers to try a bag of Pact coffee for just £1. Go to Pact’s website to order it.


Rapoport uses “smiles” as a metric for the number of cups of coffee the firm delivers to customers (Source: Greg Sigston)

STEPHEN RAPOPORT CV

Company name: Pact Coffee
Founded: 2012
Turnover: “12.2m smiles”
Number of staff: 37
Job title: Founder and chief executive
Age: 33
Born: Croydon
Lives: Balham
Studied: Business at Birmingham University
Drinking: Pact coffee and Coke Zero
Eating: Impossible to choose one dish, but it probably has lots of parmesan
Currently reading: Work Rules!, by Laszlo Bock
Favourite Business Book: The Hard Thing About Hard Things, by Ben Horowitz
Talents: Vision, resilience (and fishing)
Heroes: Steve Coogan and Batman
First ambition: To leave a legacy
Motto: “Make sh*t happen”
Most likely to say: What would the customer say?
Least likely to say: A venti soy caramel macchiato, please

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