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Changes in Coffee Industry and Foodservice
It is safe to say that 2020 didn’t pan out how anyone expected. Social, economic, and cultural changes that once seemed inconceivable have, in a relatively short space of time, fundamentally altered human behaviour and impacted every industry around the world. Particularly the foodservice, hospitality and coffee industries were forced to take stock and re-evaluate every aspect of their business models.
But we know all of this and now it’s time to look ahead.
Coffee Industry Trends 2021
We sat down with three experts from different parts of the coffee industry and asked them to provide their predictions for 2021. We invited Ed Buston from Clifton Coffee Roasters, Paul Radin from Coffee Hit and Luke Powell from Sage Appliances to join us for a forward-looking chat as part of our webinar series, The Marco Academy. The event was moderated by Gemma Kiernan, Marketing and David Walsh, head of R&D at Marco Beverage Systems
Throughout our session, we received excellent questions from our attendees and put them to our panelists after the recording.
Read the interview below:
Q: What’s going to win and what’s going to lose in equipment in 2021?
Luke Powell, Sage Appliances: For me, it’s going to be pods and home espresso as people try to recreate their coffee shop favourites at home.
Ed Buston, Clifton Coffee Roasters: For us, dealing in commercial espresso machines, we’re seeing sales for either entry level equipment or high-end equipment with a drop in mid-range. The strong brands are holding up well too. We’re also selling less extra accessories like multiple coffee grinders for different coffees.
Q: Any insights into coffee drink shifts e.g. capsule/espresso/instant/French press
LP: I think pods, home espresso and hopefully pour-over.
EB: In the coffee shops I’m seeing a trend going back to basics with a priority on simple, high quality coffee and I think that trend will continue.
Q: In recession there is a run to low cost and high end consumption with the middle falling out. Is this recession different?
EB: We’ve always felt fairly resilient to recessions. It’s different this time and it’s more about survival and adapting during and to the restrictions. The fall out will be the sectors that see reduced footfall as consumers tropical patterns have changed – this will also create winners though.
LP: I wouldn’t expect so, but the ideals of premiumisation of speciality coffee actually offers improved quality with reduced cost which should hopefully stabilise against polarisation.
Q: Do you think that now people have had the chance to make and create at home, are they are going to expect more or anything different when they return to the High Street?
Paul Radin, Coffee Hit: I think this will raise their expectations when they go back to the High Street, and places will suffer as the customer thinks “I can make this at home.”
EB: Further to that though, I do think consumers of espresso-based drinks will have a newfound appreciation for how hard it is to make good coffee at home, they’ll probably want to be able to buy beans from their local coffee shop as well as get some guidance from them. Standards in coffee shops will continue to be pushed up.
LP: I agree, the High Street is going to have to provide guidance, recipes and help for them to get the most from the coffee they buy.
Q: With more people creating coffee from home, what are peoples’ thoughts about water quality in most homes, and as roasters how do we combat the different qualities of water across the country affecting the taste?
EB: There are several products out there for better water quality at home but there’s a lot of other more obvious stuff for consumers to worry about before they get to water variation!
LP: Sage supplies water test kits with all machines to assist with Scale along with a multistage filtration system. For flavour I think we should get meaningful guidelines for coffee shops before confusing at home. Mineralisation of water should be a far later bastion with those who understand the basics.
Q: Since there are fewer ‘real world’ coffee experiences available, has there been an uptake in Zoom coffee experiences like home brewing workshops delivered online?
LP: We’ve delivered 432 online interactions both to large group and 1 to 1 serving over 5,000 people and collaborating with 15 roasters across the EU. Being a part of the Global Coffee Festival and with many more exciting parts to come. Another brief note that this is all actually makes money, so far delivering a huge value of return alongside curated direct interaction with customers, that carries both a higher CM and builds a relationship with our users.
Q: Do you think reusable cups will be more widely used in 2021? Provided the coffee is served in as safe way? Surely now more than ever this is super important. Will cafe’s embrace this instead of trying to push own branded paper cups for Insta posts?
EB: Re-usable cups will make a comeback for sure, I don’t think it has anything to do with Insta posts though, they’ll need to be accepted as ‘Covid safe’ and the social/media pressure on disposables and plastics will determine how strongly they come back.
LP: For home espresso I’d hope disposables aren’t used. For out of home I think clear waste streams and true takeaway cups is the future.
Q: Do you have any predictions about the future of the big 3 High Street brands in the UK? Do you see any trends emerging here about regarding their performance?
PR: I think the big 3 chains will suffer the most post-lockdown. As people drink more at home and less from city centres their sales won’t recover and we will see store closures as they will be slow to adapt to the changing landscape.
LP: I don’t think their offering is on par with home espresso from amazing roasters that are available in the UK. Similarly, their portfolio of locations will have reduced footfall hopefully offering a chance for smaller coffee shops to flourish.
EB: I’m sure they’ll continue to do ok with some locations being very busy. They’ll suffer in the big rent high street/office areas though.
Q: What do you guys think of virtual trainings?
EB: This would be costly to set up and the risk would be that it would become redundant when the Covid restrictions are lifted.
LP: Yes, I think there is so much room for genuine conversation with customers to help them get the best from the coffee they buy. I’d argue it will define which roasters truly care about how their coffee is drunk once sold. I’d hope the same effort which goes into Quality Control in store and nurturing incredible barista talent with home users.
PR: I do think having a virtual community and café trainings online will be popular in 2021.
Q: Is now a good time to set up a new suburban coffee shops or mobile coffee cart?
PR: Suburban is a great time, but you need to do food as well. Mobile is tougher as mass events may not occur in full for a good few years.
LP: It’s the best time! But I’d recommend clearly planning and creating a business model with the least exposure as possible working alongside roasters to leverage their equipment, payment terms and even flexible short-term lease options.
EB: I agree, if the location is right it’s a good time! Some of our mobile and suburban customers have been setting all sorts of records and been busier than ever!
Q: Does the panel think the majority of small independents will stick to take away and do less “sourdough” food when normality returns are should they try get a bigger place with a huge number of seats?
LP: I don’t think these are mutually exclusive. As the areas of purchase devolve from High Streets you can create incredible takeaway experiences and due to reduced cost/m2 you can create amazing meeting spaces and quasi co-working spaces with further innovation in business models surrounding this.
EB: Bums on seats has always been a winning formula. Independents will just have to quickly adapt to their customers buying habits which will be influenced by their work patterns and restrictions. As things get back to normal I don’t think you’ll be able to simply rely on take away only.
Q: In such a crowded online space, how can coffee roasters/retailers get cut-through?
LP: Genuine products created for your local audience and delivered with sincerity and consistency, the same love and care for home fulfilment as for in café.