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As the world has slowly adapted to living with the ongoing Covid-19 pandemic, many things have changed. We’ve seen countries go into lockdown, the introduction of social distancing measures, and people start wearing masks and PPE. This year has had a profound impact on the way people live – and the way they consume.
These changes in consumer behaviour affect almost every part of our life, from how we work and how we shop to how we entertain ourselves. But how, specifically, has this changed the way coffee and tea is consumed? Which new trends have become popular?
To learn more, I spoke to Henry Ayers, Director and Founder of The Gentlemen Baristas, and James Thirlwall, Head of Business Development at Canton Tea in London.
How Has Covid-19 Affected Coffee Shops?
Lockdown restrictions have put many hospitality businesses in a challenging position. Henry explains that in London, The Gentlemen Baristas were forced to close, and since reopening with restrictions, they have offered a reduced menu. This not only affects their sales, but also the number of people they can employ.
Similarly, the day-to-day of actually operating a café has changed drastically. In many countries, social distancing measures for both staff and customers are now mandatory, and there are a number of other hygiene measures that legally have to be implemented. Furthermore, depending on the area, dining in is no longer possible, and opening hours can be very strict.
Henry says it’s important for businesses to remain resilient. “As independents we have to be innovative, adapt, and diversify,” he tells me.
How Has Customer Consumption Changed?
When lockdown measures started across the world back in March, we saw one of the biggest coffee trends in 2020 emerge. Made from instant coffee, sugar and milk, dalgona coffee was a huge hit, specifically across social media platforms.
Today, however, pumpkin spice lattes and other autumn drinks are gaining popularity, even though the way in which people are consuming their favorite café beverages has changed. James explains that because people are generally consuming more at home, they are consequently spending more on the luxuries they were used to when they do go out.
“Consumption in food and beverage outlets is obviously down, but we will likely see a seasonal bounce back for autumn and winter if lockdowns aren’t too severe,” he adds.
Increase In Pick-Up And Delivery Services
The increase of home consumption has meant that cafés have worked their way into meeting customers’ needs without the need to actually enter the café. The Square x SCA Coffee Report suggests that the combined sales in curbside and pickup orders has increased by a staggering 5,380% in 2020 alone.
Capacity limits for hospitality and leisure business has also contributed to a huge spike in delivery and takeaway orders. The same report indicates that there has been a 340% increase in home delivery sales in the coffee sector.
Increasing Use Of Card Payments
Another change we have seen in recent months is the decreased use of cash. As delivery, pick-up, and to-go orders have all increased, the use of cash transactions has decreased as people are more and more keen to minimise physical contact.
Today, both customers and businesses prefer cashless payment options, such as the use of contactless and in-app payments. Among coffee retail businesses, the Square x SCA Coffee Report shows a 25% increase in the average bill amount.
This increase has been attributed to the fact that customers are often buying more at once, sometimes for a group order where there are capacity limits, and often setting up a subscription to minimise the amount of time they spend out-of-home.
Product Diversification
Henry explains that to stay stable throughout difficult times, many cafés have diversified their food and drink offerings. Today, cafés aren’t just limited to coffee, tea, and pastries, but have even incorporated other deli and grocery products. RTD options, such as premade cold brew, have become especially popular, with an increase of 129% in sales.
The Square x SCA Coffee Report also shows that coffee shops have increased their sales of grocery-style items where available, including milk, eggs, granola, bread, and paper towels.
“Turning into a one-stop shop for groceries seemed like a desperate measure for cafes, bakeries, and restaurants six months ago,” James says. “[But] I predict we’ll see those [trends] maintained.”
Better Coffee And Experiences
Both James and Henry believe that cafés and coffee shops are also focusing on providing better quality coffee, as well as putting a renewed focus on the customer experience.
“I think a trend in hospitality is giving people an experience where they can forget about Covid for the duration of their visit or stay,” James says. “The businesses that do this seamlessly will inspire confidence in their guests [and make them] want to return.”
Henry adds: “We now know that a percentage of the population will choose to work from home going forward. This means that their caffeine fix will need to be [as high quality as ever]. People are [improving how they make coffee] at home, now more than ever before.”
Coffee Equipment Or Subscriptions
Last but not least, an increase in home consumption has seen retail sales of coffee equipment increase by 11%, while subscriptions have increased by 109%.
Henry adds that there has been a rise in sales of domestic appliances such as grinders, as people want to improve what they have at home and have a better understanding of what they are drinking.
Equipment such as Marco’s new Ottomatic home brewer is an ideal option for those who are looking to bring the premium pour-over brewing experience into the home. Launching in January 2021, this brewer makes it simple for individuals to prepare filter and iced coffees like an expert barista.
This year has brought with it many changes to the way people consume both coffee and tea, and the way people interact with hospitality businesses.
Tea cafés and coffee shops have shown resilience during these challenging times, and have adapted to meet changing consumer demands while still respecting the restrictions posed by the pandemic.
Moving to sales of groceries and equipment, offering subscriptions, focusing takeaway orders, and abandoning cash may have all seemed like strange decisions for café owners just 12 months ago. Today, however, they are all necessities that show one thing: coffee and tea businesses around the world are ready and willing to adapt.