Australia is considered one of the most influential coffee markets in the world, with Sydney, along with arch rival, Melbourne, producing some of the world’s finest coffee concepts. In April 2021 5THWAVE scanned the streets of this vibrant city and conducted interviews with key industry figures to ascertain how Covid-19 has impacted trade and what we can expect next from this most hallowed of coffee culture in the future.
Main image: George Street, Sydney, Australia. Photo credit: Laura Cros | Inset: Jenny Willits, CEO, Seven Miles Coffee Roasters
At the time of the interviews, cafés across Sydney, and other parts of Australia, were open and thriving. However, Covid-19 is a rapidly changing situation, and upon publication of this article Sydney has entered further Covid-19 lockdowns and trading restrictions.
In this series of articles, three industry leaders provide a glimpse into what the coffee landscape might look like once global vaccination efforts begin to take effect, and how café owners can start preparing for a return to a new normality. First up we speak with Jenny Willits, CEO, Seven Miles Coffee Roasters
Suburban cafés are thriving, but the city is still recovering
Australia, and Sydney in particular, has been fortunate with Covid-19 – we’ve pretty much been living as ‘normal’ for many months (albeit with the odd small flare up and the closure of State borders in response).
Throughout these past 12 months I’ve often marvelled at the resilience of café owners, and how positive and resolute they have been to get through these times. There’s a huge sense of hope as many businesses turned crisis into opportunity to keep growing and thriving. There is real desire in Sydney to keep pushing forwards, find new ways to do business and improve customer education.
One major trend we’ve observed during the pandemic is the success of suburban cafés. The increase in working from home has fostered an appreciation of local cafés as a local hub and point of connection, and this has continued even as lockdowns have eased. In my own neighbourhood, the local community is thriving because people have got to know each other far better than they would 12 months ago, and cafés have been a huge part of facilitating that.
Successful cafés also explored additional revenue streams. Many of our café partners became wine bars in the evening, started offering an expanded food menu, including take-home meals, and introduced technology-enabled delivery
Unfortunately, Central Business District (CBD) and shopping mall cafés are still suffering for many of the same reasons that neighbourhood cafés are thriving. The uncertainty around what restrictions may be enforced when there is the inevitable odd case means the return to work in the CBD has been stop-start at best. That said, we are certainly making inroads and many of our café partners are beginning to see an improvement with an overall feeling of optimism.
Seven Miles roastery, Sydney, Australia | Photo credits: Photos courtesy of Seven Miles Coffee Roasters
The development and adoption of technology has been a huge positive consequence of Covid-19. The adoption of tools like click & collect as well as third-party app delivery services has accelerated. Table order apps can be hugely beneficial for operators as they can encourage customers to stay and order another coffee or try something else from the food menu. Cashless cafés have also really taken off in Sydney.
Consumers have learned a lot about coffee during lockdown
We were already seeing increased at-home coffee consumption in Australia prior to the pandemic, but as with many things, Covid-19 has accelerated this trend. Consumers are investing more on equipment, such as traditional espresso machines, and are more knowledgeable about how to make great coffee at home than ever before. They are also far more educated about coffee supply chains, and operators must keep pace.
Customers are now visiting cafés for a very particular type of experience you can’t replicate at home. Cafés therefore need to become much more than simply a place to grab a coffee, they truly must become destinations to experience specialty coffee and food in a warm and inviting environment – and I think this will continue to elevate the status of cafés.
"It doesn’t make sense for the specialty industry to cut corners"
This is a wonderful opportunity because it raises the bar for cafés and means the industry must rapidly bring to market new ways to experience coffee – such as offering unique coffee origins, different brewing methods, exemplary barista skills honed using specialty coffee, alongside an elevated and complementary food menu.
Sydney cafés must work together for a sustainable coffee industry
In those early days of the pandemic, I think many businesses were paying less attention to issues like paper cup usage because they were in survival mode and relying on takeaway trade to stay alive.
Nevertheless, our paper cup recycling programme is still going strong. Our coffee bags are recyclable using TerraCycle program and none of that stopped during lockdowns. The numbers don’t show that it got stronger, but it certainly didn’t stop.
Sustainability is not just about the environment – there’s also social and economic sustainability – and all three contribute to the viability of a business. If you’re economically viable then you stand a greater chance of making a positive environmental and social impact.
One of the biggest challenges facing the Australian coffee industry is a ‘race to the bottom’ when it comes to specialty coffee prices that some roasters are charging café customers. Some of the deals being done on kilos of coffee are really undercutting economic sustainability in the coffee industry and inevitably will impact the entire coffee supply chain.
The idea that specialty coffee can be commoditised because of cut-throat competition to sell quality products at cheap prices scares me. It also frustrates me because we’re so fortunate to work in an industry where our customers don’t just desire coffee, they say they need it. Why are we therefore charging less for such a valuable commodity?
Seven Miles Training Centre, Sydney, Australia | Photo credits: Photos courtesy of Seven Miles Coffee Roasters
The rise of $1 quick-service format coffee in supermarkets, specialty or otherwise, is less about “coffee with convenience” but more about getting consumers to purchase other items in-store, so it’s a loss leader. It doesn’t make sense for the specialty industry to cut corners, strip out value and sell our product for a cheaper price.
Our job is to educate consumers to understand the price of what’s in the cup and the complexity of the supply chain. If farmers are switching to other crops because they can’t make a living from coffee, then we all lose out.
There’s an opportunity where we have more educated consumers at home, but we’ve also got a more educated consumer on the street level where they can access good coffee.
Sydney or Melbourne?
When it comes to coffee, we’re both Panama geishas. Both cities roast some of the best coffees in the world served in some of the best cafés in the world. It’s your call whether you want to drink them in a European-style alleyway, or at one of Sydney’s beaches.
In the second part of this feature, we speak with Melinda Evans, Operations Manager, Mecca Coffee about how the pandemic has reshaped Sydney’s café market and how consumers became more discerning during lockdown.
This interview was conducted in April 2021 and first published in Issue 7 of 5THWAVE magazine
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