As the months of social distancing and work from home stretches on following the limited opening up of the economy to curb the spread of the coronavirus pandemic, more and more people are turning into their own baristas.
Instant, artisanal, filter coffees and coffee beans are flying off the shelves at grocery marts as stay-at-home people are making that perfectly instagramable brew.
However, the rise in coffee demand by the home consumption segment, which is about 2 percent globally, is not replenishing the coffers of the coffee industry that has taken a massive hit with cafes and restaurants shutting down.
A near 12-percent dip in demand is expected over the year in the out-of-home coffee consumption segment.
As the third-largest producer and exporter of coffee in Asia India, ships Robusta and Arabica varieties, apart from instant coffee, to Europe and Russia, Jordan and Turkey among others.
The economic lockdown has already resulted in the coffee industry looking at financial damages of Rs 7.36 billion, according to the Coffee Exporters Association.
Coffee export, which is 70 percent of the domestic produce (excess of 3,00,000 tonnes a year) is down by 17 percent to 167,445 tonnes for the period from January 1 to June 23, 2020, compared with the same period in the previous year.
Industry experts agree that the outlook for the coffee industry is gloomy. The pandemic has exposed many fault lines in the global supply chain. Along with that, lack of demand, serious competition from Brazil, renegotiation of export prices, liquidity crunch faced by coffee producers are crippling the industry with signs of recovery at best dim and distant.
Some of the leading players in the Indian coffee cafe market including Tata Starbucks Limited (India), Café Coffee Day, Barista Coffee Co Ltd., Costa Coffee, McCafé, Indian Coffee House (ICH), Brewberrys Café, The Coffee Bean & Tea Leaf Restaurant and Cafe (CBTL), Gloria Jean’s Coffees etc., largely responsible for mainstreaming coffee culture in India, are trying their best to stay afloat.
With shutters down for nearly three months, coffee retail chains have taken massive revenue hits. Forced to reassess business strategies, many are considering shutting down some of their branches.
They are also trying to renegotiate rental agreements and dine-in capacity at their outlets and hoping for some tax relief from the government.
As Coffee shops are slowly resuming business with the partial easing in lockdown, their attempt is to look for newer ways to sell the beverage ensuring ‘social distancing’.
Market experts say that in the pandemic-related new normal, evolving and innovating the brand and business is the only way to remain viable and relevant.
Recently, Tata Starbucks, which has 187 brand outlets across the country, opened its first ‘drive-thru’ store in India on the Ambala-Chandigarh Expressway.
Popular in the United States, these drive-thru outlets offer a full menu, Wi-Fi, and merchandise counters. They are perfectly suitable in the pandemic times, as they allow customers to pick up orders from their vehicles.
Starbucks, which had restarted home delivery and take out services across stores in India have currently resumed operations with 50 percent seating capacity and social distancing at select outlets in Delhi, Surat, Ahmedabad, Vadodara, Hyderabad, Bangalore, and Kolkata.
Another café chain, Café Coffee Day (CCD), has also reopened 60 percent of its cafes across the country.
They have introduced a tech-enabled contactless experience to engage with customers via their new web-based platform, CCDOnline.in for all the orders and delivery. The online platform uses big data intelligence to understand the needs of the customer and customise a personalised experience for them.
The cafe chain has also started subscription-based personalised offers for their two most popular categories — cappuccinos and frappes.
The iconic India Coffee House (ICH) on Kolkata’s College Street area, a favoured hang-out for intellectuals, art lovers and the cultured, also reopened in June 2020 after 100 days following all the mandated hygiene and social distancing protocols. But the turnout was low. Where hundreds jostled for a table a seating for mere 25 at a time doesn’t quite cut the mark.
Loyal customers are a big plus for the old ICHs, nearly 100 of the café’s old customers strolled over to Chandigarh’s ICH for coffee in disposable glasses and only takeaways.
For the last few years, the Coffee Board, which runs ICHs across the country, has been talking about setting up ‘digital coffee shops’ that will see quality produce through an online portal, directly sourced from farmers.
Twelve prime ICH outlets have also been put up for bids for operation in a franchise model. Today would be a good time to implement those plans to pump life and lucre into these institutions.