During the height of the shutdown, coffee shops across Wisconsin had to shut their doors or drastically reduce hours while offering curbside pickup. Consumers took to the internet to purchase their favorite beans and the correct machines to craft their own brew.
Two Wisconsin coffee roasters who operate shops, Colectivo and Barriques, both saw a rise in online whole bean coffee sales.
In April 2020, Madison-based Barriques’ web sales exploded, up 1,500 percent compared to April 2019. According to Co-owner Matt Weygandt, online business replaced what they lost from in-store purchases and then some.
“There was a large transition to people making coffee in their home,” Weygandt said. “All of our Chemex and AeroPress and so forth, they all basically sold out within the first three weeks of everything shutting down. Now, we’re seeing follow-up orders from the same people for coffee filters and replacement parts for their brewing apparatus.”
Colectivo not only saw an uptick in their web sales for whole bean coffee, but also through its wholesale grocery channel.
“We very quickly introduced the 5-pound bag format for at-home use, as opposed to being a traditional wholesale format only. Customers really responded to this,” said Scott Schwebel, marketing director at Colectivo.
He added that Colectivo continues to see numbers that are higher year-over-year for direct web sales, as many customers have adapted. Espresso specifically sold up to five times that it normally would, especially in the first two months of quarantine. Whole bean espresso sales continue to be strong.
However, Weygandt said people who were latte and cappuccino drinkers have been more inclined to come back to the open cafes. Those numbers are coming back for Barriques faster than brewed coffee drinkers. That indicates that people are still making more coffee at their homes.
While the whole bean sales have increased, there’s no replacing the beverage side.
“This uptick did not offset the significant and on-going overall depression in sales for our company from negative cafe revenue across all Colectivo locations and the wholesale food and beverage industry in general,” Schwebel said.
Weygandt echoed Schwebel, noting Barriques’ revenue is off substantially. The company has “bright spots” — days where the level of sales gets comparable to last year. But then the next day, it could easily be off by up to 60 percent. He also expects it will take up to 18 months before Barriques can get back the majority of its business.
“If we’re 20 percent off at the end of the day for a place, that’s a pretty good day; that’s actually really fantastic,” Weygandt said. “Those are few and far between. There’s just no demand out there. If you walk around, there’s just no people. It’s very difficult to stimulate demand either.”
But the business has made innovative adjustments to sustain itself through investing in its website and offering virtual wine tastings — events that used to be in person. Barriques’ retail wine business has also increased by up to 45 percent during the pandemic.
And like most businesses during the pandemic, the cafes had to make operational changes to keep pace with the situation. This included reduced hours, changed staffing levels and even an adjusted menu.
Schwebel said Colectivo was in a good position from a technology standpoint to adapt to customer standards and regulatory COVID-19 compliance — both online and at the shop.
“The consumer has been exposed to an entirely new set of patterns and options as a result of the pandemic, many are going to stick,” he predicted.
Meanwhile Weygandt weighed the pros and cons of new consumer behavior.
“It’s hard to get people back into the habit of coming to get coffee versus making it at home,” he said. However, communal spaces in the office setting — such as the coffee station — could be going away.
“That may benefit a place like ours,” he said. “People want decent coffee, but they don’t want to make it at home… maybe they stop at a place like ours.”
In the meantime, Weygandt said there’s “no silver business bullet” to recreate the company in such a massive way in order to thrive — “you’ve got to batten down the hatches and try to manage as best you can and hold out until things hopefully gradually get better.”
Schwebel added it’s going to be a tough year for coffee shops.
“I wish all of them good luck as we get to the other side,” he said.
-By Stephanie Hoff
WisBusiness.com
