Tips on coping with the current Covid19 lock-downs for cafes and coffee roasters from Industry Leader Phil Di Bella, Peak Coffee Head Roaster – Ainsley Harrison and Coffee Roaster Adrian Capra
This week has been exceptionally hard for cafe and coffee businesses as the government forced takeaway only service in cafes and coffee bars. Thanks to loyal customers many cafes could still make a small income to run the business as a skeleton model just doing takeout coffee and some food.
The knock-on effect is that coffee roasters are down two thirds on coffee sales in the wholesale sides of their business. Our industry is very technical and coffee businesses have the risk of losing important people in their systems as they are forced to lock down.
The future is very uncertain, and currently this is one of the biggest fears and stressors aside from getting sick. How do you cope with this if you don’t have enough revenue or savings to keep fully operational?
I asked a number of industry buddies who are coffee roasters as well as green bean businesses for some tips on how they are coping with the current Covid19 lock-downs.
Ainsley Harrison – Head Roaster , Peak Coffee Port Macquarie NSW
Q1 – How has your business been directly affected with businesses you support like pubs, restaurants, clubs, schools etc?
- Our overall weekly volume has dropped substantially as the businesses that were forced with the shutdown mainly specialised in dine-in and couldn’t adopt the takeaway model.
Q2- What are ways Roasters can survive at this time? Are new markets like online and takeout working for you?
- Online sales have taken off, providing local home/office deliveries has also been helpful in selling retail coffee.
Q3- Will you have issues with getting green bean supply in the future? Do you think coffee prices will rise?
- Current green bean supplies are secure, but there may be sourcing issues in the future with some of our direct trade routes. The Australian dollar was already weak by the end of last year which increased the price we paid for green bean, depending on how the Australian dollar is after this ordeal the price might just go up even more.
Q4 – What is the best innovation/idea from our industry that you have seen during the Pandemic
- Many Roasters are attempting other avenues of revenue and it’s still too early to determine which would be the best idea, however seeing others who have completely changed their model from just a simple roastery to other models like convenience stores or bakeries sounds like a great way to supplement income and keep staff employed.
Q5 – Will we bounce back hard after the Pandemic when things normalise? Your opinion?
- That really depends on how bad the recession is after the pandemic is over and if there is still money in the economy to even spend on Speciality Coffee. I think when we return we’ll all be focusing on our real money makers like our ’work horse coffees’ to get us through before people begin to spend money once again on speciality coffee. I also think for those who do survive as well, that the scars of the pandemic will also teach us not to put our eggs all in one basket, to diversify our offerings and services in other ways to keep money flowing if one aspect of the business is forced to shut down again in the future.
Philip Di Bella – The Di Bella Group founder and Owner of International Coffee Traders – Brisbane QLD
Q1 – How has your business been directly affected with business you support like pubs, restaurants, clubs, schools etc?
International Coffee Traders has been directly affected as has everybody in the coffee supply chain. It starts with consumers being able to buy cups of coffee which now is less due to the closing/limited operations…..cafes therefore need less coffee from their roster and roasters need less Green Bean from people like ICT….. no one is immune to this in any way shape or form.
Q2- What are ways Roasters can survive at this time? Are new markets like online and takeout working for you?
The best way right now for roasters to survive is to limit their expenses…… to see where they can save money, whether it’s by sharing roasting equipment with others, or sharing labour hire etc.
The markets to explore are definitely online and direct sales to the public because they will still want to drink coffee it just won’t be in cafes any time soon.
Q3- Will you have issues with getting green bean supply in the future? Do you think coffee prices will rise?
We are already seeing issues with certain countries like Columbia which have closed everything down and coffee exports have ceased, fortunately myself and my team saw this coming and bought up lots earlier.
As coffee pricing is all about supply and demand and economics, we will certainly see increases in price which will again hurt people in our industry…..it will be the ones that are prepared and who have industry contacts and knowledge that will survive the best.
Q4 – What is the best innovation/idea from our industry that you have seen during the Pandemic
We are seeing many of our clients team up with other suppliers like paper goods, frozen foods, fruit and vegetables etc and deliver direct to people’s homes this way they can keep business ticking over.
Q5 – Will we bounce back hard after the Pandemic when things normalise? Your opinion
The hospitality industry will always bounce back but no doubt it will bounce back with a lot less players……. from coffee roasters right through to cafes and restaurants.
Some people will say it’s the clean out that needed to happen, unfortunately many people get caught up in this mess and it will hurt many families…..that is never a nice thing to see.
Adrian Capra – Coffee Roaster, Art of Espresso – Cowra NSW
Q1. How has your business been directly affected with business you support like pubs, restaurants, clubs, schools etc?
At this early stage due to reduced hours and /or closures of some accounts , we have noticed less coffee ordered.. however, this was expected.
Q2. What are ways Roasters can survive at this time? Are new markets like online and takeout working for you?
Our online sales and retail accounts have become increasingly busier. We have also fortuitously introduced as recent as January this year Nespresso compatible bio degradable and compostable coffee pods.
It just adds a little extra to the retail options for the home market. We have also introduced FREE delivery in our town and Free postage Australia wide for orders over $80.
Generally home market is increasing as the Espresso bar becomes quieter
Q3. Will you have issues with getting green bean supply in the future? Do you think coffee prices will rise?
I have spoken with my main suppliers and at this stage coffee supply will be fine until at least Xmas. I also pre-order our green beans to ensure there is enough coffee for me in times of doubt.
My direct trade relations in this instance has becomes an extra blessing. Overall, I do believe coffee prices will rise but once this plays out you will notice a lengthened price settling period due to the economy re-stimulating itself. with a more cautious approach.
Q4. What is the best innovation/idea from our industry that you have seen during the Pandemic
I think seeing cafes and / or restaurants offering home delivery service for meals and coffees is great innovation.
Q5. Will we bounce back hard after the Pandemic when things normalise?
I believe this pandemic will certainly have a big casualty list and sadly some businesses will not survive. Unfortunately, this is a result of too much growth too soon and over borrowing…. simple fact. On the flip side, the industry will return stronger than ever as those that scraped through in survival mode will have a much deeper appreciation and understanding of business and economics and how to survive a catastrophe. People will want to come out and support hospitality as it is our community social platform and the businesses that survive will want to certainly reward those people for backing them in tough times!
I look forward to seeing you all on the other side!
To summarize these great insights from our industry leader’s, coffee manufacturing (roasting) should be an essential service so many can remain open during a lock down to roast and supply.
It’s time now – Today, to make sure you have the stock and can deliver to households, hospital canteens, and other places of essential service. Like any chain of events there will be some interesting opportunities ahead of you among all the grief.
Stay strong and focus on the business model as it is in front of you today.
Sean Edwards
Director Cafe Culture International
