Innovation, overlooked opportunities and a harsh assessment of how we source our coffee are at the centre of how the coffee industry is pivoting itself to mitigate and overcome the challenges during the Covid-19 pandemic. Here is a look at the current situation in the industry and how it’s impacted the newest and projected trends in the coffee consumer market!
What’s currently happening in the Industry
Everyone up and down the coffee supply chain has been adversely affected by the current pandemic as lockdowns and other regulations are enforced the world over. Coffee shops have had to cancel orders as lockdowns and other regulations are enforced, which means that roasters had to find new markets to tap into as their largest market (café’s, restaurants and coffee shops) seemed to disappear overnight.
Suppliers struggle with imports and exports as fear of spreading the virus delays shipments and farmers battle to sell quality product to sellers who are reluctant to buy because they still have stock they’re trying to offload. As a result, everyone has taken a knock in terms of revenue as prices universally dropped and expenses mount, but farmers who are at the heart of the industry have been hit the hardest with very little room to pivot compared to roasters and retailers.
Farmers not only had to drop prices but their expenses have sharply increased (due to the need for PPE and other hygiene measures), their workforce has been reduced if not limited, climate change has negatively impacted harvests and the threat of pests and disease (such as leave rust and coffee berry borer) keep mounting. Yet despite all this, Mordor Intelligence expects a compound annual growth rate of 4,22% for 2020-2025 although this is well below the original projects of a pre-Covid market. So, how is this supposed to be achieved?
– Sustainability and Ethics
Consumers are becoming conscious of where, how and by whom they’re coffee is grown and supplied. GlobalData* reports that up to 43% of global consumers’ choice is influenced based on how ethical, socially responsible and environmentally friendly a product or service is.
* GlobalData Covid-19 Recovery Consumer Survey Week 5
Similar to wine farms, in a post-Covid-19 world, coffee farms could start marketing themselves as a travel destination where consumers could learn and indulge their coffee habit.
Premiumization is one trend that has survived the influence Covid-19 and will probably continue to be a trend in future as coffee lovers insatiably search for the best coffee. This search for the best doesn’t just apply to the end product itself anymore but the entire supply chain, from farm to coffee cup. These are the hallmarks of the supposed third-wave in major coffee trends where, according to Drinks Insight Network, “more respect is given to high-quality speciality roasts, hyper-specific beans, innovative brewing methods and origin information that combines with environmental, ethical and social credentials.”
Juxtaposed to this is the need for cheaper coffee without a drop in quality as more consumers have to deal with the harsh realities of the global recession that the pandemic has thrown us in.
Going out to crowded, public places is still against most government regulations, and many consumers are still working from home at the moment. This has seen many consumers buying all the necessary equipment, products and reading up on barista methods of preparing their favourite cup of coffee at home. I mean if you have the time, why not?
– Single-cup of coffee brewing
If you’re not one to get fancy with how to prepare your coffee but still prefer something to you French-press or percolator, coffee pods and capsules are the perfect solutions for you! Fior Markets expect the market for these coffee machines to nearly double in growth by 2025.
– Ready to drink
Ready to drink coffees like cold-brewed and iced-coffees, is one of the fastest-growing markets in Europe, according to Hivos, as they are more convenient (you don’t have to wait for it to cool down), you can purchase them in larger cup sizes and often perceived as a healthier alternative.
One of the ways coffee roasters adapted to the pandemic is by offering consumers a subscription model which will have their delicious cup of mocha delivered to their door!
We spoke to George Bertolis, Director of Coffeequip the premium coffee equipment supplier, for his view of the current market and industry and according to him “despite the devastation of the pandemic,” says Bertolis, “the pandemic has proven to be a trial by fire and only through the recognition of our weakest points, our reliance on one another and innovative think, will the industry overcome, grow more resilient and thrive.”