Lessons from the pandemic
Private label pour over coffee pouch offered by NuZee. The company diversified its suppliers to include more North-American based ones to avoid disruption. Image: NuZee
The pandemic was the most difficult challenge most companies had – or will ever have had – to face. However, through it all coffee and tea companies showed resilience, creativity and strength, and the importance of being flexible and adaptable. By Anne-Marie Hardie
The year 2020 placed the entire world on pause. It was a moment that would forever transform industries, forcing businesses to shift their operations dramatically. It was two years filled with uncertainty, but from that uncertainty rose a strong community focused on innovation, transparency, and agility.
“In the very beginning, the biggest impact was the dramatic shift in terms of consumption points from the consumer standpoint, which was followed by supply chain management issues, particularly in grocery, as the dollar value shifted into the retail segment within a period of months,” said Robert Carter, president, Coffee Association of Canada.
Across the globe, companies shifted their operations to respond to this elevated demand for at-home coffee and tea consumption. Both industries faced several hurdles, including labour and supply shortages. However, companies quickly evolved their operations to respond to this dramatic uptick.
“The pandemic has made the industry look at the systems that we have in place from both resource management and supply chain management,” said Carter. “There is now greater transparency in the entire process from a business-to-business standpoint; it took a lid off the entire industry.” Two years later, several of the changes were retained as both industries acquired a deep understanding of supply chain, logistics and labour.
“There were several supply chain challenges, including transportation, logistics and labour,” said Jose Ramirez, chief sales and supply chain officer, NuZee, Plano, Texas. “From a labour perspective, a lot of folks were worried about balancing their work and home life. We needed to adjust, including creating different shifts as a safety precaution and to accommodate our employees who needed to balance childcare and work.”
NuZee, which specialises in single serve and private label coffee co-packing, altered its hiring strategy, actively seeking out operators with multiple skill sets to minimise the company’s labour vulnerability. Although operations are now back to normal, NuZee has retained its hiring strategy and schedules, ensuring that it can quickly respond should a future emergency occur.
Based out of Los Angeles, California, Art of Tea initially focused its business on the hospitality sector. However, with 80 per cent of their business on pause, Art of Tea needed to reduce its work force, cultivating a small but nimble team that was laser focused. “Morale and teamwork went up, and I think that was because our values were aligned, and we were on the same mission,” said Steve Schwartz, master tea blender and founder, Art of Tea.
Today, Schwartz shared that their hiring strategy has evolved from being primarily skill based to value-centric, allowing him to create a team that is a strong cultural fit. “It’s so important to surround yourself with strong players aligned with your values, so that you become a mission-driven organisation,” he said. “The pandemic has taught me that we must continue to move forward and conduct business in a meaningful way, driven by our sense of purpose and values.”
The Benefits of Diversification and Long-Term Forecasting
Three Keys Coffee, Houston, Texas launched in the spring of 2020, causing it to abruptly change its direction from in-person to online. Little did the company know that its unique coffee experience of pairing music with coffee blends would attract the media’s attention, putting it on the map for an intriguing and innovative coffee subscription.Today, more than 60 percent of Three Keys Coffee’s customers are outside of Houston.
“One of the lessons learned from the pandemic was the vulnerability of the supply chain,” said Kenzel Fallen, co-founder, Three Keys Coffee. “These disruptions are forcing us to think much further ahead in terms of planning so that we can make sure that we have enough supply for our customers.” The past two years have taught Three Keys Coffee the importance of good analytics, including understanding its historical sales and costs, to forecast properly. “It’s about gathering enough information and data, to inform decisions and forecasting appropriately so that you aren’t left with a shortage or overage,” said Fallen.
In early 2020, NuZee was heavily dependent on international suppliers, specifically Asia, but with the unpredictable disruptions the company knew that it must expand its supplier network. This included diversifying its suppliers to include American companies, moving from a single asset-based vendor to a broker, and diversifying production operations across NuZee’s two factories. “These actions gave us the flexibility to get our product out a lot faster, while also being proactive in terms of risk management in case there was an outbreak or labour shortage,” said Ramirez.
Nimble Marketing Strategies Discovers New Audiences
The pandemic revealed resiliency in the tea and coffee industries as companies changed their delivery channels to remain active in the market. It was a time of innovation and agility, with manufacturers placing close attention to their markets’ needs and discovering new ways to connect with consumers.
“In 2020, there was a shift to at-home consumption worldwide, increasing sales by more than five per cent and we expect to continue to see that percentage growing year after year,” said Juliana Villegas, vice president of exports, Pro Colombia, Colombia. “Pro Colombia expanded its portfolio to export several new products, including 3-in-1 value-added products and freshly ground coffee pods. And our country showed both resiliency and the capacity to adapt. It definitely wasn’t easy, but the coffee industry persevered, coming out stronger than ever.”
Villegas shared that there was incredible teamwork, between the coffee growers, the National Federation of Colombia, and the government. “We tried to find ways to ensure that the labour force could go into the fields, so that the industry could respond to all of the needs and commitments that were previously made with the buyers.” The result, he said, was that the Colombian coffee industry was strengthened, both on the production side and the export side.
Based out of Vernon, New Jersey, Brother Beans Coffee’s primary market was the office sector, however, closures required the company to develop a new strategy. “We had to pivot and focus all our efforts on e-commerce and restaurants, which is what we still do today,” said co-founder, Tyler Correll, noting that his takeaway was that there are so many different avenues and opportunities to make money in the coffee industry. “I’ve learned, through this situation, the importance of keeping my head up and being creative.”
The past two years revealed the importance of maintaining that close connection with the consumer, both in-person and online. This included adapting offerings to respond to the consumer’s tastes and responding to their need for authentic and transparent brands.
“In the United States, Twinings was known mainly for its black teas, English breakfast, Lady Gray, the classic teas you would expect from a British or English tea brand,” said Mike Currie, vice president of marketing, Twinings North America, Clifton, New Jersey. “But, as the pandemic continued, we saw a big shift towards wellness, including improving their mental health, sleep, and immunity.” As a result, Twinings repositioned to become a wellness brand, including a new marketing campaign that showcased products with functional benefits.
The new functional line was launched in the summer of 2021 followed by a wellness campaign in the fall. “Being nimble and being able to pivot when necessary are both incredibly important; it’s about looking at what we learned and going beyond what’s happening now to the next set of trends,” said Currie.“This includes always trying to have your finger on the pulse of the consumer, including finding ways that you can play a role in their lives.”
In 2020, Café San Alberto, Bogotá, Colombia, was in the process of opening a new café (coffee temple) in downtown Bogotá, and in the beginning stages of e-commerce, including making its products available through Amazon. However, with the increased interest in delivery and home consumption, Café San Alberto expanded its offerings to include coffee courses and an at-home coffee experience. “We essentially created a new business centred around the at-home coffee experience,” said third generation owner, Juan Pablo Villota. “Initially, the experiences were primarily purchased by companies looking for bonding activities they could offer their employees at home, but it has now broadened to the wider consumer base.”
The pandemic required companies to be both innovative and agile. Mansa Tea, based in Brooklyn, New York, is one example of the entrepreneurial spirit that resulted in the founder moving away from the hospitality sector to deliver a unique virtual experience. “We were out doing a tea pairing workshop on location with one of our hotel partners, and I remember thinking that this would be the last one for a while,” said Ashley Lim, tea sommelier and founder of Mansa Tea. So, she started to look at virtual methods and how Mansa could connect with the tea community to deliver both products and experiences.
“In the beginning, there was a lot of experimentation,” said Lim. “There were a lot of gaps in the virtual experience, the biggest being that you cannot fully control how the tea is brewed. We tweaked the experience over time, including implementing strategies on how to capture one hundred people’s attention through a virtual platform.”
Overall, the pandemic not only revealed resiliency but strengthened the tea and coffee communities. Although the industries were largely supportive of each other, the past two years have strengthened these connections.
“From a Canadian perspective, there has been an increased sense of community; when this all happened the industry really came together to support each other,” said Carter.“We continue to see the social aspect of business rise, with a strong focus on the human aspect, including diversity, inclusion, and mental health.”
- Anne-Marie Hardie is a freelance writer, professor and speaker based in Barrie, Ontario. She may be reached at: [email protected].