In late March 2020, some 20% of the world’s population were ordered to stay at home to slow the spread of Covid-19. However, some months later, many of these people have returned to their offices and workspaces as the global economy has started its road to recovery.
Despite this, flexible working is more popular than it ever has been, and with more people staying at home and fewer entering urban areas as a result, cafés have seen a decrease in footfall.
In a survey conducted in the UK, nearly 50% of café owners predicted that Covid-19 would significantly affect their revenue until the end of 2020. Around a quarter stated that they thought would be affected for at least two years.
So, in light of global logistics issues, café closures, and mass homeworking, how has coffee consumption changed? And how have coffee shops and roasters responded to lockdown measures to stay in operation? I spoke with three industry experts to learn more.
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The Rise In Home Coffee Consumption
Out-of-home coffee consumption, such as in cafés and restaurants, makes up around 25% of total consumer demand for coffee. So, when some 95% of these businesses closed in early 2020, temporarily or permanently, the coffee industry took a tremendous hit.
Naturally, these closures combined with stay-at-home orders and other public safety concerns meant that many consumers were limited to brewing their own coffee at home.
Yannis Apostolopoulos is the CEO and Executive Director of the Specialty Coffee Association (SCA). He says: “During [the] pandemic, there [was] a shift to brewing coffee at home, either because more people worked from home, or because they felt uncomfortable going out to buy coffee during the early months of this pandemic.”
Despite the fact that the ICO predicted a 0.5% drop in global coffee consumption, home coffee consumption has increased. In the US, the at-home coffee market is set to increase by 4.9% in 2020 alone. For comparison, it only increased by 3.9% in the four-year period spanning from 2015 to 2019.
“I think people are trying to create the quality of the beverages they are enjoying in a coffee shop,” Yannis says. “That leads to investing more in better equipment that can produce similar and consistent results, versus a well-trained barista who is trained to use professional equipment.”
Joyce Klassen is the Head of Marketing for grinder manufacturer Baratza. She confirms that more consumers are investing in higher-quality coffee equipment.
“We have seen an increase in grinder sales, and it’s the most substantial increase that we have had in any six-month period. We are up 70% since Covid-19 started,” Joyce tells me.
Sales of all coffee equipment, including items like pouring kettles, rose by 11% this year, with a median price of US $139. This shows that coffee drinkers are willing to spend significant amounts of money to improve the quality of the coffee they drink at home.
Trends Within Home Coffee Consumption
So, now we know that home coffee consumption has increased during Covid-19 – but what have consumers bought?
Firstly: coffee. Amid concerns the supply chain was struggling with Covid-19, around one in four people in the US reported stockpiling coffee to avoid running out. During the pandemic, 27% of home brewers reported drinking brewed coffee at home, while 25% used pod or capsule machines.
Most people have stated that they are still using the same equipment and coffee products that they had before the pandemic. However, people are trying new things. It was reported that just over 40% of millennials stated that they have experimented with different brewing methods.
Consumers are also becoming more confident in their coffee-making capabilities, with two-thirds stating that they have “perfected” their recipes and techniques. This makes sense – with more time at home and out of the office, coffee drinkers have more space to to repeat and refine a target recipe.
However, some coffee drinkers still seek convenience, despite having more time at home. Sales of bulk cold brew and iced lattes rose by 129% throughout the first few months of the pandemic, and recent forecasts show that the ready-to-drink (RTD) coffee market is expected to keep increasing. It is anticipated that it will be worth a staggering US $42 billion by 2027.
How Have Roasters And Cafés Responded?
In the UK, over 80% of café owners temporarily closed their businesses at the beginning of the pandemic. Of the coffee shops that stayed open, around 70% exclusively offered takeaway services and reduced their opening hours.
These trends have been common across coffee shops in most of the world; capacity limits have been enforced in many countries, takeaway and curbside orders have skyrocketed, and cafés have largely implemented rigorous cleaning and hygiene routines to ensure that a proportion of their customers can return safely.
But what about roasters? While Covid-19 meant a drop in wholesale of roasted coffee to cafés and other hospitality businesses, it did present them with an opportunity to diversify and look at their online business.
As a result, more and more roasters moved to online coffee sales and, in particular, subscription services. In the US, the number of roasters offering subscription services during Covid-19 rose by 25%, while subscription sales increased by 109%.
Vikki Hodge is one of the directors at Rave Coffee in Gloucestershire, UK. She tells me that Rave Coffee’s revenue increased by more than 100% during the pandemic. Vikki says that while some roasters had historically found subscription services to be “not easy to manage”, things changed during Covid-19.
“Due to the pandemic, customers have realised the potential convenience of this service. [They now] have more faith as they understand and have control over the management of it,” she notes.
Vikki adds that subscription services offer new benefits for the consumer. “It can be fun, educational and experiential without overcomplicating it,” she says. “Roasters can introduce customers to different varieties, or provide them with the ability to stick with what they know and love.”
However, with delays in shipping and shortages among large ecommerce companies (such as Amazon) some coffee shops and roasters took advantage of their surplus of retail stock and started offering delivery services throughout the pandemic. Joyce explains that this wasn’t just limited to roasted coffee, however – equipment sales also increased.
“After Covid-19 first hit, we dedicated a percentage of our inventory specifically to support the smaller cafés and roasters,” Joyce explains. “The idea was to support businesses that were struggling with bricks-and-mortar closures and an overall reduction of operations.
“We have seen cafés shift to selling equipment to replace revenue lost from café sales. [Many have even] brought in inventory [and] dropship products directly to consumers [without even holding the stock].”
What Happens Next?
Even though the impact of the pandemic has been massive, things are slowly returning to something that resembles normal. More and more governments are relaxing stay-at-home orders and encouraging businesses to open, providing they take the necessary health and safety measures.
Yannis says: “Moving forward, I expect that people will appreciate their subscriptions, and brewing at home will remain a habit for consumers.
“[However], it might not keep the share of consumption it has [taken during Covid-19], as people will definitely go back to coffee shops to socialise or indulge themselves.”
Joyce agrees with Yannis, but notes that the response will likely be gradual. “I think people still crave connection and want to spend time with friends and meet over coffee,” she says. “They can do their morning routine at home and then take a break to connect with friends and family at another point in the day.”
This meteoric rise in home brewing could also mean a general change in consumer knowledge. With more and more coffee drinkers investing in equipment and signing up to coffee subscriptions, their understanding of the wider coffee sector and the supply chain will naturally increase.
“Customers are becoming more aware of the quality and provenance of the coffee in their cup,” Vikki explains. “This awareness should drive even more demand for specialty coffee, which will shape the industry going forward.”
This deeper knowledge could mean that more and more consumers push for more ethical, transparent and sustainable coffee in the long run. Yannis says he believes it’s a “great opportunity” for specialty coffee.
“People will start to understand more [about] varieties, origins, producers, processing methods, and roasters, just as they’ve done with wine and beer in the past.”
Consumers and coffee businesses alike have adapted well to life under the pandemic, but only time will tell if these consumption patterns will return to normal or change forever.
With every day that passes, more and more roasteries and coffee shops open their doors and return to business. As their customers may very well return with more knowledge than ever about the coffee supply chain, we have to wonder if there will be renewed interest in specialty coffee on a much wider scale.
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Perfect Daily Grind
Photo credits: Baratza, Tasmin Grant, Specialty Coffee Association
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