Coffee merchant targets high street with 'bean brain' logo

Chief executive Gary Nicol said the launch at this week's Caffe Culture trade exhibition in London represents the largest makeover ever undertaken in the company's 146-year history. An orange and brown "bean brain" logo, developed with The Union agency in Edinburgh, will be accompanied by the strapline "We know coffee".

Nicol said: "We want our brand to become known to coffee drinkers, and we want our brand to allow our customers to talk to coffee drinkers."

Though founded in 1864 as a grocer buying tea from clippers on the Clyde, about 95 per cent of Matthew Algie's business is now linked to coffee. The wholesale operation's clients include the likes of Marks & Spencer, Pret a Manger, Gleneagles Hotel and the Scottish Parliament, plus a raft of smaller independent coffee retailers.

The latter account for about 40 per cent of group turnover, and Nicol hopes these independents will take to displaying the coffee brain logo as a sign that their product is both ethically and sustainably produced.

"We would like to see our new branding on the high street – nothing would give us more pleasure," Nicol said.

"Hopefully people will see this and say that's my theology, I'll get a great cup of coffee in there. We want to be synonymous with that."

About three-quarters of Matthew Algie's coffee beans are Fair Trade certified, giving producers in the Third World a guaranteed minimum payment for their product. Roughly 70 per cent is both Fair Trade and organic, and about one-third is "triple certified" with an additional Rainforest Alliance seal which means that farmers also look after the tropical forests where they live and work.

Figures published this year from Mintel consumer intelligence researchers showed growth in the UK coffee market, with Java lovers preferring premium brands rather than cheaper jars of instant coffee. Mintel also noted a strengthening trend for ethical coffee.

Nicol – who was promoted from finance director after the early death of previous chief executive David Williamson in 2008 – said the ethical supply chain was "very important" to Matthew Algie, its customers and coffee drinkers generally. In 1997, Matthew Algie was the first to offer Fair Trade beans in the UK, followed by the launch of its first triple certified beans in 2004.

The coffee shop sector has also proven resilient to the economic downturn, with UK consumers reluctant to give up what many now see as the necessity of a daily coffee fix.

Despite the financial woes of those such as Coffee Republic and the high-profile store closure programme at Starbucks, recent market research from Allegra Strategies showed that the net number of new UK outlets rose by 258 last year, a 6.6 per cent increase.

Nicol said Matthew Algie was "hugely optimistic and enthusiastic" about the future of the sector, which is expected to continue on an upward trend for the next several years: "There is still steady growth, perhaps because good coffee is one of life's little luxuries."

The family-owned business experienced "robust" trading last year, Nicol said, though he declined to reveal details before the company lodges its accounts later this autumn.

Higher coffee prices and the weakness of the pound forced Matthew Algie into a pre-tax loss of 700,000 in 2008, versus the previous year's record 2.2m profit.

"We are on target for our budgets this year," Nicol added. "We are now hoping to build upon that."