Cafés and QSRs flex their strength post-pandemic
If the unexpectedly long impact of the global Covid-19 pandemic far exceeded everyone’s wildest expectations, with social distancing mandates disrupting restaurant’s in-store dining options for extended periods, the post-pandemic era seems to have unleashed a fresh jolt of pent-up demand for brick and mortar business.
There seems to be no shortage of both independent coffee shops and quick service restaurants (QSR) that have opened over the past year, some filling in the gaps opened by those that succumbed to the harsh realities of pandemic shutdowns. But plenty of others have picked up where café trends left off. After several years of isolation, consumers have been yearning to return to normalcy. While the “third space” phenomenon of café culture took a pause as drive-throughs and home delivery reached unprecedented levels of activity, café culture is alive and well, and some operators are clearly focusing on growth.
In my own small town in Pennsylvania, USA, new openings of independent coffee shops were as active last year as any time I could remember. Our population totals are a bit slim to support waves of trendy new franchises that we haven’t heard of, but our existing Starbucks and Dunkin’ have certainly seen in-store customers return.
In major metro areas, not only are new independents continuing to come only, but franchises and multi-location operators are setting their sights on expansion.
Texas-based iced tea-only franchise HTeaO has already forged a leading position in its niche of the quick-serve restaurant beverage sector. Having debuted in 2009 as Texas Tea, the family-based company carefully developed its business model for nearly a decade, rebranded and rolled out its franchise program in 2018. It has grown from 68 locations at the start of 2022 to 95 today, and reports having several hundred franchise agreements currently under way. With 26 proprietary flavours of iced tea on its menu, crafted from broad leaf tea and all-natural ingredients, HTea0 is unique in its ‘tea-forward’ focus, although in truth they also have several non-tea lemonade beverages and a small selection of drip and espresso coffees. The company is envisioning locations throughout the US, but specifically targeting Florida and the East Coast at this time.
Utah-based Beans & Brews, founded in Salt Lake City in 1993 and franchising since 2004, has long promoted its friendly ‘mountain lifestyle’ persona and ‘high-altitude roast, which it says was tweaked much like high-altitude baking, and is characterised by its notably mellow roast. Founder and CEO Jeff Laramie explained that the company has been focused on steady growth with an eye on maintaining its neighbourhood coffeehouse atmosphere. It currently has 68 locations across four US states, and recently announced it will open 40 new stores in San Antonio and Austin, Texas, and an additional 29 locations in four other mid-western US states. In addition to a breakfast oriented café menu that also includes frozen and blended coffee drinks, the company’s extensive line of specialty roasts are sold online.
Tim Hortons, the Canadian-based unit of Restaurant Brands International, has made headway with its brand in the US with online coffee and supermarket sales, and currently has 600 US locations in 12 states, trailing behind Dunkin’ and market leader Starbucks, but has been gaining traction in recent years, having reported its strongest growth in the US to date in 2021. Long seeking to be a major player in the market, it is focusing particularly on California, Florida, Illinois and Texas for its US expansion. Globally, Tim Hortons has over 5,100 locations across 13 countries, and last year launched a 10-year plan to open 300 locations in India. Meanwhile, the coffee house’s exclusive operator in China, TH International Limited, just opened its 600th location there, in Zhongshan in Guandong province. The chain’s expansion in China has been strong, from 150 locations across 10 major cities there in early 2021, and sights set on 1,500 stores within the next few years.
Without a doubt, the pandemic shifted retail strategies for many operators, many of whom were already exploring growing use of technology and drive-thrus. Caribou Coffee’s flagship coffeehouse model, in place for nearly 30 years and featuring cosy ‘third-place layouts with fireplaces and full menus ideal for congregating, was joined in 2019 by a streamlined small footprint Caribou Cabin format with no indoor seating, but rather a drive-thru and walk-up window and limited outdoor seating areas. Today Caribou Coffee has 30 of these locations in the US, and they will be a significant focus for future expansion, in locations that might not need a full coffeehouse.
I doubt anyone misses any of the chaos of the pandemic, but for cafés and brick and mortar retailers, many lessons were learned: third place is here to stay, but so are emerging formats emphasising convenience, supporting even more growth.
- E Edward ‘Ted’ Hoyt has more than two decades of experience as a trade magazine editor and freelance writer, authoring many articles in the premium coffee, spirits and cigar industries, among others.