Sean Edwards – Managing Director Café Culture Magazine
As we are on the eve of releasing the data for the 2021 Café Pulse report, two words have come to mind – Strange Times!
Since our last report in 2019 many major unplanned changes have happened locally and around the world. Obviously, we are in a global Covid-19 pandemic but just before we got that great news, we were already coming out of a ten year drought to be then smashed by the worst bushfires in history. To throw some more petrol on the fire, we had floods up the east coast of Australia, closing businesses for weeks. So, anyone running their own business or working for a small business has all felt the same pain and are probably wondering what’s next? How do I possibly stay in business? We decided to do a small survey at the start of Covid-19 in May 2020 to see what really was happening to the industry in a full year of global disruptions. The reports highlighted the true affects, resulting in some interesting actions that are appearing in our industry as we see the end to this unpredicted drama.
The cafe industry has been absolutely smashed at all angles by long lockdowns, decreases in skilled labour, high freight charges, no rent reductions, no overseas tourism and slow government assistance during lockdowns, as well as being the blame of many Covid-19 outbreaks. Large numbers of cafe businesses have closed for good, especially the ones in major city centres who rely 100% on office workers. Our survey results from the latest report suggest we could have lost up to 25% of our total cafe numbers and as high as 50% in the CBD areas of Melbourne & Sydney, both places of high cafe concentration. We know franchise and chain cafes have taken a big hit because of their retail locations in large outlets like major shopping centres. Recently AMP Capital mall funds posted a $517 million loss in 2020 due to the Covid-19 interruption from operator closures, further reduced and/or delayed rent repercussions.
One thing the report has highlighted is the ingenuity of the Australian cafe owner who stuck it out and went into full survival mode by reducing costs by switching to takeaway only and modifying the outdoor spaces to get more legal seating in place. Sydney council took a proactive approach and scrapped outdoor license fees to get diners to social distance on the footpath and in vehicle parking. The NSW government offered the same support to all local government areas to put quick processing policies in place during the Pandemic. We also saw some easing with liquor licence fees being removed and the process for cafes to get quicker access to “On Premise” permits to sell alcohol.
We also saw the rise of some new stars on the cafe menu like the gourmet bacon and egg roll and the 16 oz large takeaway coffee. The at-home office worker was the catalyst for this and many suburban and regional cafes felt this strange effect of a newfound customer getting out of the home office for a large caffeine fix and some maple bacon, farm fresh eggs on a brioche bun. We have also seen a massive up take of lifestyle food being the end results of bad new personal habits of too many trips to the fridge with the sudden growth of Covid Belly. We have seen people becoming more self-aware and getting a healthier mindset, so plant based alternative foods have taken the mainstream spot on many cafe menus. We predicted in 2019 the rise of oat and almond milks and our figures were nearly tripled by these new Covid beverage trends. We are getting contacted daily with new start up plant based beverage and food businesses, so watch this space as the bleeding vegie burger screams out at you!
Some disturbing issues from the Pulse report where we see a massive role out of takeaway packaging as many cafes refused to accept reusable cups or serve ceramic cup ware on site. There was a lot of miss-information coming from overseas about the banning of customers reusable cups and our local council officers started to ill-inform their local cafe businesses of cleaning practices and put blanket bans on these coffee cups. This was another hit for the environment when we were all on track for responsible cafe procedures, putting us years behind again in environmental education. Some very forward-thinking cleaning chemical manufacturers saw this as an opportunity, Zexaclean Australia created a range of food safe sanitisers to rinse cups and milk jugs under the “Café Dunk” brand and “FreshCup” to solve environmental issues of slowing down paper cup usage. Hopefully our cafe owners will start to regain their confidence again and research the real facts, putting customers values on the top of the list again. Our predictions of cleaning practices will stay in place forever so get used to the smell of hand sanitiser and disinfectant.
We saw the cafe Industry getting some blame from state health Ministers around check in policies. I personally challenged the way national QR code systems were handled from the start. Most of the initial systems were handed straight to overseas data collection businesses which made people very skeptical on signing in, with no guarantee where personal information was going to end up. Cafes were at the forefront of the abuse from customers not wanting to check-in properly, now a year later we are the new security force up against the anti-maskers, only armed with a fluro vest.
Overall, our Government has been acting much faster than our overseas neighbours. They were very quick creating many welfare programs, putting lifelines in place for business owners and workers. All this was available right at the start of Covid-19, in March 2020 to cover employment costs caused by the first lockdowns. JobKeeper kept jobs in place but unfortunately the time lapse between real on the job work led to many traditional hospitality workers seeking other employment in other industry sectors. The Report clearly spells out the pain cafe owners have experienced when trying to get trained staff to run their operations when they restarted again. JobSeeker payments also proved casual staff were far better off staying at home with increased weekly payments than what they would have received from their cafe employment from a few days casual work. The cafe industry survives mostly off a casual workforce. Many casuals also come from the large pool of foreign backpackers that would normally be here on working holidays, most of this group headed home at the start of 2020 and travel restrictions stopped this latter casual workforce intake.
It’s not all bad for all cafe owners nationally, with some good actions that have appeared from the effects of Covid-19 trading. Regional cafes have had a short boom time with our large supply of empty nesters heading to remote country areas away from the cities to holiday. This group can’t go on their annual European canal cruises, so they are firing up their newly purchased four wheel drives and caravans and are heading for a statewide tour of our cafes and pubs. They are all armed with their restaurant and travel vouchers, which has been a great Government incentive, helping them to spend their retirement monies wisely.
The Café Pulse Report is available to order though Café Culture International and is a very enlightening insight into the Café and Coffee Industry. The data is real and will be very helpful to suppliers, FoodService distributors and government agencies that need some strong directions on the real Out Of Home (OOH) trends of an industry and what may lay ahead. Café Culture has been compiling the survey report for over eight years and have predicted most cafe trends and growth cycles, assisting in the growth of one of the most successful industries acclaimed widely in the world.
Please contact firstname.lastname@example.org for more information or go to www.cafepulse.com.au.