Roasters Rock

Roasters Rock New Normal for Roasters

by Rocky Rhodes

First, let’s all agree to stop saying ‘new normal’! Entrepreneurs wake up every day to the ‘morning normal,’ and it will be different by the time they go to bed. Roasters deal with the same thing standing at the machine. Is there a NORMAL roast? Every batch requires adaptations.

So here we are amid a pandemic. Roasters in January had different jobs to do than what they face now. ‘Today’ requires roasters to adapt and persevere. We have known that roasting is part art and part science, but now it is part social distancing. Adapting to meet customer needs while keeping everyone safe is a challenge.

In what some might call ironic, and others see as obvious, coffee roasters were considered essential workers, but teachers, until August 18th, were not. It turns out that if teachers can’t get their morning coffee, they can’t do their jobs well! So we essential workers got busy roasting coffee.

What has changed since January’s ‘normal’? Are people drinking less coffee? The data suggests they are not. Are consumers changing their buying habits? That is a question best answered with “duh!” But knowing what they are doing helps roasters stay engaged and selling coffee.

According to Rabobank data compiled for NCA, there has been an increase in the price of coffee as well as a surge in the sales of whole bean coffee. Growth has also occurred in single-cup products, instant coffee, and roast and ground coffee. PEOPLE ARE MAKING COFFEE AT HOME! The data also shows that the price per pound at retail stores is trending higher as consumers want to treat themselves to better coffee at home.

It follows logic then that coffee sales in restaurants and coffee shops are down a lot. If people can’t go out or are not going to work, then dining sales have to decline. Roasters are adapting to this drink at home phenomenon with home delivery, mail order, and limited seating in the coffee houses.

Since the start of specialty coffee, roasting companies have tried to launch successful online ordering and subscription service coffee to minimal success. Consumers were just not planning ahead enough to order coffee before they needed it, and shipping costs made it very expensive. We now have a post COVID reality that consumers are fine ordering coffee online and having it delivered. Shipping is fast and can be inexpensive.

Euromonitor International estimates that between just the loss of on-campus coffee consumption and office coffee service loss due to work moving to the home office, home consumption is up 4.5%.

So Roasters? What are you doing about it? Every company roasting coffee is having war-room meetings on how to adapt, thrive, maintain market share, etc. Here are some examples of changes that companies are implementing to rise to the moment.

–Cashless transactions –Curbside pickup –Barista delivery –Phone Order apps –Increased outdoor seating –Carrying more ‘homebrew’ equipment –Build web-presence for ordering –Making creative COVID blends –Experimenting with single-serve packaging –Raising prices to meet increased costs For those of us responsible for maintaining a consistent product from the roaster as well as inventing new ones for the creative marketing efforts, we have an additional challenge:

Green bean supply issues.

While in the US we have dealt with distribution issues by deeming food manufacturing an essential service, that does not help with maintaining a supply of coffee from certain countries. There have been port delays, both inbound and outbound. There will most certainly be delays with harvests in the later part of 2020.

Roasters are having to replace blend components with what is available at the time. Just because you have a contract does not mean it will get to a US warehouse on time. Finding the opportunity here will be essential for maintaining business but could also be a way of creating new products and finding ways to lower costs.

Celebrate what you have in stock! If you need a single-origin coffee and you are out of the COE inventory, go scoop some of your ‘blender’ coffee and get to work on finding the best it has to offer. It is a fun process of experimentation and will usually result in a darn good cup. We just don’t usually think of that grade 2 as having unique qualities special enough for single-origin representation. You might surprise yourself and have a lower cost / higher-margin product.

Blend what you have in stock. If you run out of Colombian, you use in your House Blend and have a lot of El Salvador, try using it before committing to buying more inventory. It may not work – but it might. In a pandemic, it would be wise to reduce the amount of money tied up in inventory and use it for necessary operating expenses until things open up.

Predictions for coffee buying trends in the future require a crystal ball and a Ouija board. There does seem to be some data, however, that could inform some choices. Global Workplace Analytics says, “Our best estimate is that 25-30% of the workforce will be working-from-home multiple days a week by the end of 2021”. That has to pique the interest of coffee roasters!

The opportunities from that prediction alone mean that at-home coffee consumption will continue to be high and that office coffee service may flatten or decrease from pre-COVID levels. Also, some of those ‘home’ workers are likely to be sick of their homes and move operations to a coffeehouse. Adapting space to accommodate the new workforce might also be wise.

There is likely no new normal, just an ever-changing normal of where people will drink their coffee. Be willing to adapt, change, and deliver to wherever your coffee drinkers enjoy their coffee.

Rocky Rhodes is an 18-year coffee veteran, roaster, and Q-Grader Instructor, and his mission now is to transform the coffee supply chain and make sweeping differences in the lives of those that produce the green coffee. Rocky can be reached at rocky@INTLcoffeeConsulting.com