It was inevitable. No one knew exactly what it would look like, but as the global health crisis continues to catalyze change in nearly every industry, coffee unfortunately is not an outlier. This week we’re going to take a look at what COVID means for the future of coffee and how the drink we all love might look a little different post-pandemic.
From the supply side, to the impact that growers are beginning to feel, all the way through the changes in demand and coffee sales, how your morning brew ultimately arrives in your mug, will be the product of a changing industry.
The Sales Side
This one goes without saying, but as restaurants and cafés grapple with, and navigate gradual re-openings alongside heightened health regulations, not all will survive. Many operations are looking to integrate mobile order and walk-up services, which will be a great additional service post-COVID. But for smaller cafés this process could be lengthy, costly, and with no guarantee that all will come out on the other side.
As much of the hotel, tourism, and service sectors have been slow to reopen, the number of places needing, and selling coffee has plummeted, shrinking a large portion of demand for roasted coffee. According to the Business Insiders' Market Report, between December 2019 and April 2020 alone, the global market price for coffee dropped roughly 10 percent.
Nowadays, more people are buying coffee in bulk, learning how to brew at home, and finding new ways to reduce the amount of trips made outside of the home - and unfortunately local cafés have suffered. Only time will tell who makes it out on the other side. But if you’re passionate about supporting small and local businesses, then now, more than ever before, is the time to try and support a café near you.
The Supply Side
COVID hasn’t seemed to have made its way into the secluded and rural hillsides where most smallholder coffee farmers reside, so lots of growers are still picking, processing, and hulling their beans like before. While most growers will still be able to sell their beans (though at a reduced price due to a fall in demand), these beans will likely be stored for some time until demand picks back up.
Traditionally, when there is an excess of supply like this on the global market, coffee prices bottom out and growers begin uprooting coffee trees and planting other crops that provide more immediate income. This won’t impact your ability to find beans on the shelf, but it could have a long-run impact on price stability throughout the industry and how many smallholder farmers choose to ride out the storm.
The Demand Side
Demand isn’t going anywhere as the world shifts into remote work mode, but the form of that demand will invariably look a little different.
Coffee subscription services that deliver to your door and mobile ordering platforms were already around. But COVID has accelerated the rate of demand for “touch of a button” specialty coffees that reduce the interactions we’ve cherished for so long at our favorite cafés.
What we can hope for on the demand side of the equation is that consumers continue wanting ethically and sustainably sourced coffees from farmers that were paid their fair share. While it may feel convenient to go to a big retail chain cafe to fulfill your literal demand, these larger companies only make up a portion of the global demand for coffee that ends up in retail.
Corporations will survive the health and economic crisis of COVID because they have the resources to instantly adapt and make accessible their coffee under new health protocols. Others may not be so lucky. Now more than ever, your demand for coffee matters and so does where you choose to buy it from. It may be a little more work to seek out your local roasters and cafes, but it's time well spent and the future of these local businesses might just depend on it.
The Future of the Industry
At some point things will go back to normal. Cafés will reopen and the forces of supply and demand across the industry will balance out. It will take time, but coffee as a specialty good and centuries old cultural stronghold around the world is not going anywhere, but how you order your brew or beans no doubt will.
At Himalayan Coffee Importers, we’ve always believed in supporting smallholder farmers who responsibly cultivate high quality specialty coffee, and we hope throughout the global health crisis, when possible, you can too.