Episode 15: John Steel
Safia talks to John Steel, CEO of Cafédirect, about the iconic & pioneering Fairtrade coffee brand that put Fairtrade into our supermarkets in the 1990s.
John explains how starting his career with Rowntree, a company established on Quaker traditions, grounded him in the guiding principle that business should be about improving society and not just about making money. Rowntree was acquired by Nestle in 1988. “We need to find a way of getting the world to change more rapidly and have generosity of spirit that human beings should have,” says John.
Cafédirect began in 1991 as a response to the 1989 global collapse in coffee prices and was the first brand to go into the supermarkets, promoted jointly by Oxfam, Traidcraft, Equal Exchange and Twin Trading.
It also launched the Fairtrade mark, from which hundreds of products and product categories have followed. It has grown to £14 million turnover, growing 10% in 2019, led by its’ popular Machu Picchu roast filter coffee and a premium range launched with Waitrose. The company works with approximately 600,000 small-scale coffee farmers. John says “the environment is now so positive for businesses like Cafédirect where the consumer is increasingly saying ‘I want to choose to use my money to make a difference’.”In the future, John explains that he would like to raise awareness of how business can be done better, to influence other companies to buy in the right way and “work closely with farm communities to make a profound difference on the environment and their livelihoods, as the future of food and drink depends on that.”
He recalls visiting a small, struggling co-operative near the ruins of MachuPicchu and seeing how the Fairtrade business model can make a real difference. Cafédirect were able to support the community with a loan, enabling them to not only survive, but flourish and establish a reliable income stream and go on to win an export award for quality coffee.
He explains that Cafédirect work through more than 40 co-operatives , varying from small groups of 300 families to many thousands. The company doesn’t want farmers to be dependent on Cafédirect so their business is a small percentage of the farmer’s total income. John wishes that more coffee companies would buy coffee from the farmers on Fairtrade terms.
The Fairtrade model ensures farmers get a minimum price guarantee and the co-operative adds a premium to improve communities. John points out the importance of this guarantee in a volatile market – coffee prices can go down to as low as 88c per kg , much lower than the $1.35 farmers need to subsist. “A consistent reasonable price is a basic requirement in a moral society.”
John believes that there is still room for consumers to understand the real connection between the coffee farmers and their role as ‘stewards of nature’. He says “Cafédirect is a pioneering business and change needs to occur with greater scale and impact. Businesses managed properly can mobilise consumers just as David Attenborough mobilised consumers against plastic waste. The business model Cafédirect uses is successful. When you talk to a student about the different business models you can adopt, trading on fair trade terms, buying organically, working directly with small holder farmers and working with them to help them think about how to manage the environment, every single person in the room will go away thinking ‘why should I buy anything else?’”
John admits some frustration competing with a growing number of Fair Trade and ethical labels and advocates one mark which guarantees ‘good’ business. As the first coffee company to become a ‘B Corp’, and working closely with social enterprise UK, he sees Cafédirect leading the way, “I see a collaborative business model that is looking at how we improve the lives of farmers and setting an example of how business can lead change.”
John and Safia finish by discussing thought leadership and systems change in the light of the events of 2019 (including Cafédirect declaring a Climate Emergency). John is excited and positive about the future, “the momentum is astounding, we want to be there to help galvanise change and we can do this by stepping up and collaborating.