What coffee roasters learned from the Covid-19 pandemic

It’s no understatement to say Covid-19 has had a monumental impact on coffee shops and roasteries the world over. In early 2020, up to 95% of out-of-home coffee businesses were forced to close – severely affecting operations and driving them to adapt to new ways of selling their products.

The impact has been both short and long term – and both positive and negative. While some roasters suffered under forced closures, others managed to increase online sales and boost e-commerce strategies.

And although on the surface it may seem that the coffee industry has now returned back to “business as usual”, the pandemic has undoubtedly had long lasting effects on how roasters operate – as well as the challenges and opportunities that lie ahead. 

To find out more, I spoke to Razvan Burlacu, co-founder of Dropshot Coffee Roasters, and Abdullah Ramay, CEO of Pablo & Rusty’s.

You may also like our article on changing your coffee business strategy after Covid-19.

From its very beginning, the pandemic had a profound impact on the wider coffee industry. Coffee shops and roasters were among the most affected, with subsequent government-imposed restrictions to curb the spread of Covid-19 forcing many businesses to close their doors for months at a time. 

Some coffee shops and roasters did find ways to quickly adapt, however. The use of kerbside pick-up and delivery services massively increased – with research from the Specialty Coffee Association indicating the number of businesses offering these services rose by 521% in the US alone.

Abdullah Ramay is CEO of Pablo & Rustys – a specialty coffee roaster in Australia. In his experience, he says the effects of the pandemic on his business happened across three different phases. 

“The first was the uncertainty of how it would impact our revenue,” he explains. “The second stage was understanding and implementing the required legislation, and lastly, ensuring the health and safety of our staff, customers, and wider society.”

Switching to take away services only – as well as using personal protective equipment – was obviously a hugely important part of preventing the spread of the virus. However, dealing with the pandemic naturally was both physically and mentally challenging for baristas and customers.

But that’s not to say all consequences of the pandemic were completely negative.

Razvan Burlacu is a co-founder of Dropshot Coffee Roasters in Bucharest, Romania. He explains that the effects of Covid-19 presented some positive opportunities.

“The pandemic was a chance for specialty coffee roasters to increase brand awareness,” he says. “Many consumers discovered more roasters by brewing coffee at home or buying to-go coffees from specialty coffee shops that were open during lockdowns.”

So how did roasters adapt?

The vast majority of coffee shops and roasters had to deal with forced closures during the height of the pandemic. Each individual business, however, also had to figure out new ways of adapting to the impact of Covid-19 – which was certainly challenging.

Abdullah says Pablo & Rusty’s made some significant operational changes, while continuing to focus on its values and business objectives.

“We doubled down on our team culture, which was one of the biggest drivers of our survival during this period,” he tells me. “A strong working culture allows for more open communication, better decision making, and being able to be more nimble and agile. 

“We also continued to diversify our offerings, as we were doing prior to Covid-19,” he adds. “We have continued to pay closer attention to our supply chain partners, rising inflation, and pricing, too.”

Despite business closures, coffee consumption remained relatively stable during the pandemic. But how and where people drank coffee changed, of course. To replicate café-quality drinks, consumers started to prepare more coffee at home.

In turn, many roasters took this as an opportunity to invest in their online sales (including coffee equipment) and subscription services to remain profitable.

“We launched our online shop during the pandemic, so we don’t have a prior reference, but since then, our business has grown continuously,” Razvan tells me.

Considering the long-term changes

In the years since the pandemic, many restrictions have been lifted, which meant most roasters and coffee shops were able to resume regular operations. The ongoing effects of Covid-19, however, have resulted in some major changes across the entire coffee industry.

In Romania, Razvan says these shifts have generally been positive. 

“Post-pandemic, specialty coffee shops started to take off in larger cities in Romania, and our business grew a lot,” he tells me. “Consumer preferences largely shifted from traditional Italian-style drinks to specialty coffee.”

Abdullah agrees, and says the pandemic has helped roasters to rethink their business strategies to benefit them more in the long term.

“Covid-19 forced roasters and cafés to look more deeply at their business models,” he says. “Before the pandemic, everyone was trying to be everything to everyone at a similar price. There is a renewed focus on differentiation – on understanding your business, your customers, and the experience and values you are trying to deliver.” 

“Sustainability and more varied price differentiation have also become more important,” he adds. “This is a net positive for the industry as its very core, specialty coffee is about offering a differentiated product and experience.”

However, that’s certainly not to say there weren’t serious negative impacts of the pandemic for roasters and coffee shops, including: 

“Price volatility, inflation, and price increases are things we couldn’t escape, and neither could most businesses regardless of their forward coverage or coffee sourcing programmes, as you can only mitigate certain types of risk for a limited time,” Abdullah explains.

Razvan says his team also experienced steep increases in prices. 

“We saw a big increase in green coffee prices in both 2020 and 2021,” he explains. “Compared to 2019, prices basically doubled.”

Popularity of blends

Over the past few years, it’s been hard to ignore the soaring popularity of blends in specialty coffee. Although there are many reasons for this shift, Razvan says he noticed the resurgence in blends shortly after the pandemic began.

“As more consumers started to drink specialty coffee, blends offered more familiarity than single origin coffee or micro lots,” he tells me. “Many people who are new to specialty coffee find it difficult to keep up with the ever-changing flavour profiles you often get with single origins.

“After the ‘honeymoon’ period of discovering specialty coffee, some people want more balance in terms of taste, price range, and consistency,” he adds.

For Abdullah, meanwhile, the rising popularity of blends doesn’t come as a surprise. He says unlike other markets, Australia has always favoured blends.

“From an Australian perspective, we see this as the rest of the world catching up,” he explains. “Blends and single origins serve different purposes. If most of your customers drink milk-based beverages then blends typically provide a better and more balanced flavour profile.”

Looking towards the future

Razvan believes roasters are still experiencing lingering effects of the pandemic – especially related to changing consumer preferences.

“I think office consumption remains relatively low compared to pre-Covid,” Razvan tells me. “Maybe this is the reason why our online sales are still growing. Some people still work at home, so they have more time to prepare coffee, and will want to buy higher-quality beans. Interest in specialty coffee is still increasing.”

Abdullah similarly concludes that these seemingly lasting changes will present both challenges and opportunities.

“I don’t think we will ever go back to ‘normal’ – we are now in a ‘new normal’,” he says. “Some paradigms have changed for the foreseeable future. The main ones are inflation and a different focus on supply chains, as well as a renewed focus on sustainability. 

“More importantly, the pace of change is now much faster and more unpredictable,” he adds. “Businesses must have the right mindset and culture to handle this new reality successfully.” 

Although it may seem like some time ago now to many of us, the effects of the Covid-19 pandemic are still lingering – and have resulted in lasting changes to the coffee industry.

To find success, many roasters had to adapt accordingly. And considering it’s likely there are more challenges and opportunities ahead, remaining agile and flexible is important.

Enjoyed this? Then read our article on whether consumers’ interest in education will continue beyond Covid-19.

Photo credits: Pablo & Rusty’s, Dropshot Coffee Roasters

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