November 6, 2020

The Rise Of Coffee Subscription Services

It’s been a year of innovations and new trends in specialty coffee, largely thanks to Covid-19. From the dalgona coffee craze earlier this year to the increase in popularity of drive-thru coffee across the world, the pandemic has changed the way that many of us drink coffee, for better or worse.

But as well as the way we drink coffee, new brewing and buying trends have emerged in recent months, too. In July 2020, it was estimated that one in ten people in the UK subscribed to a food and beverage subscription during lockdown, and that coffee was one of the most popular categories.

To learn more about the Covid-19 coffee subscription boom, I spoke to three roasters. Read on to find out what they said.

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Roaster writing the date on the coffee bag, subscription

From Online To Subscription

Online coffee sales are nothing new, but even before the pandemic, there was a huge spike in popularity. In 2018, online retail giant Amazon reported that “food and beverage” was the fastest-growing category on their platform, and that coffee was the single most popular subset of that category. In fact, in the same year, Amazon coffee sales alone totalled some US $140 million. 

Furthermore, while coffee subscription services are something that many of us associate with Covid-19, they have in fact been a growing part of specialty coffee for more than a decade.

Dale Harris is the General Manager at Hasbean, and was World Barista Champion in 2017. He explains that a subscription isn’t just as a way to provide customers with fresh, high-quality coffee, but also a means for drinkers to learn more about the origin of the coffee.

“It’s not just the coffee,” Dale explains. “It’s also the information and the narrative you provide with it.”

Online subscription services generally operate in a straightforward manner. Customers pay a roaster on a regular basis and receive freshly-roasted coffee.

While some subscriptions will allow consumers to choose and rotate their own coffee, many ask for some basic details from the customer (brewing method, grind size, and roast profile, for example) and ship out a coffee that is suited to their taste.

Furthermore, coffees on subscription services will often rotate based on the roaster’s supply, which allows customers to try a “coffee of the month” and learn more about different origins and processing methods.

Dale tells me that this provides Hasbean with an opportunity to educate the customer and add more value to the overall service. He says that for each coffee Hasbean introduces to the subscription service, founder Steve Leighton takes a new video where he provides background information on the farm, the producers responsible for it, and what sets the coffee apart. This joins the “In My Mug” series on the Hasbean website.

Roasted coffee beans falling from a bag, subscription

Adapting To Worldwide Lockdowns

Online sales and coffee subscription services saw an explosion in demand in the early months of 2020 as Covid-19 spread across the world.

Pedro Miguel Echavarría owns Pergamino, a roastery-café based in Medellin, Colombia. He tells me that his roastery saw their online sales increase about ten times in May, when lockdown started in Colombia. He adds that even though lockdown measures are starting to ease, this trend seems as if it’s here to stay.

“[Online sales] are now about eight times as popular as they were, [even] now people aren’t fully quarantined and coming back to our shops,” Pedro says. “We’re at the point where we feel that online sales will remain very important, much more important than it was before, especially now that people have got accustomed to buying online.”

While Pergamino mainly sold through their cafes before Covid-19, there are some roasters who operated predominantly online before it came into effect.

Carlo Scarito is the founder of Carlo’s Coffee Kitchen in the UK. He tells me that the brand predominantly sold coffee through their website since they started in 2015. 

However, Carlo says that when the UK went into lockdown, sales increased so much that he and his team decided to create a subscription service to cater to the increased demand. “I always thought it was a good way of providing a better service to your regular customers,” Carlo explains. “Lockdown was the perfect time to start.”

Diversifying Your Offering & Educating The Customer

Subscription services spiked in popularity in a matter of days when varying restrictions and café closures came into force around the world. As a result, many roasters diversified into online sales to survive when wholesale orders went down. However, this meant that even though the demand was there, many of these roasters were entering a new market that was full of competition.

Pedro tells me that Pergamino started offering supplementary services, gift boxes, and other online packages to set themselves apart from the rest. “We realised a lot of people were spending time away from the people they loved, and often wanted to send them a gift or a care package,” he explains.

“For people that are quarantined inside their homes all day, coffee is the perfect gift. So, we set up kits containing coffee and V60s, AeroPresses, French presses… and so on.”

But after supplying the equipment, many saw that it was necessary to provide the expertise, too. More and more roasters started publishing brew guides and other tips on their website, providing a platform not just for sales, but also for education. This helped to meet the needs of both new and existing coffee drinkers who wanted a “home barista experience” when their favourite coffee shop closed its doors.

“People wanted to become home baristas when all this started. So we came out with videos for home brewing and people were going crazy for them,” Pedro says. “We were publishing weekly home barista tips like ‘what grind to use for each method’, or ‘how to make coffee quickly using an AeroPress’ for people who don’t have much time.”

Improving Sustainability For The Producer

So, while online sales and subscription services provide an alternative for coffee shop customers and a new income stream for the roaster, what does it mean for producers? Pedro explains that even though there has been a huge increase in demand for online services, the impact wasn’t necessarily felt among coffee producers.

“Specialty coffee produced in Colombia only makes up 1% to 2% [of exports],” he explains. “This meant that even if a large increase in online sales of specialty coffee was able to compensate for the loss of coffee sales at the café level, it was not enough to make a huge dent in the livelihoods of hundreds of thousands of producers in [countries like] Colombia.

“This said, online sales do tend to be primarily specialty, which in any case is great news for growers if they are part of a transparent and fair chain.”

For producers who do grow and sell specialty coffee, Dale says that the opportunity for exposure is also beneficial. Appearing on a subscription service gives a producer more visibility, and sees their coffee distributed to a range of customers who might not usually buy it. If their coffee stays popular and sells well, they may later be able to sell in higher quantities to other roasters.

He uses an analogy: “With subscription services, it’s often like going to a cocktail bar and rather than just ordering your ‘usual’, you ask for the bartender’s choice. [Subscriptions] give us the flexibility to send consumers a coffee they wouldn’t normally try.” All three roasters agree that online sales provide them the opportunity to establish new relationships with producers and strengthen existing ones.

As the supply chain faces difficulties with cafés closing and the resulting loss of wholesale trade, subscriptions and an increase in overall online sales are an opportunity to recover. “Yes, they’re small transactions, but if you get 100 or 200 subscribers, that’s the same as a wholesale client,” Dale says.

“You then have some certainty you can take to the origin about the amount of coffee you’ll be buying from them for the next six months.” 

The Rise Of Subscriptions: The Future For Specialty?

So are subscriptions and online sales the future? Well, Carlo says that he can’t see the coffee shop being replaced. “Going to a coffee shop is an experience. Having someone who knows what they’re talking about in the cafe is second-to-none,” he tells me.

Beyond that, third wave coffee is all about the experience and the “art” of brewing coffee. This explosion of ecommerce sales and subscriptions models almost seems like a step in a totally different direction.

Carlo says there’s likely to be a return to old consumer habits as coffee shops reopen, but notes that there may be a lasting effect in how people buy coffee. “[Customers] could be changing where they shop,” he points out. Consumers who have emerged from lockdown with a newfound passion for specialty coffee might stick with their subscription instead of picking up a flat white.

Coffee subscriptions become incredibly popular in the space of just a few months thanks to Covid-19 changing how, when, and where people drink coffee. Whether or not they will remain as popular when we return to something close to normal remains to be seen.

However, it could be that the subscription model is the mark of a new breed of specialty coffee consumer. Will old habits change when coffee shops start reopening for good? And is ecommerce really the future for third wave coffee? Only time will tell.

Enjoyed this? Then read A Brief History of Coffee Pods

Photo credits: Nicole Motteux, Neil Soque, Laura Fornero

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