America’s Coffee Shops Just Might Survive This Moment

April 20, 2020 Admin 0 Comments

If you compare the situation to the ongoing restaurant apocalypse, there’s some hopeful news coming out of the coffee landscape

“Being able to say, ‘Hey, come have a coffee in our space, let us host you’ — I don’t think that hospitality moment is coming again anytime soon,” says Mallory Pilcher, head of brand at Stumptown Coffee. The scene across much of the American coffee industry right now is grim. Cafes nationwide are closed or operating at limited capacity; baristas are furloughed, laid off outright, or working with significant reductions in hours. And yet if you compare the situation to the ongoing restaurant apocalypse, there is some hopeful news coming out of the coffee landscape, a few small signs of uptick that point to the wider scope of where coffee in America is headed.

Coffee is a baked-in need — it is largely recession proof, and may indeed be depression proof, too, should the economy come to that. Coronavirus has changed everything in America, but for coffee drinkers — and those who make their lives around it — the brew goes on, and I’m hopeful, even bullish, that coffee is going to survive this moment and whatever comes next.

The American specialty coffee industry is not a monolith. The precise nature of COVID-19 shutdowns have impacted different brands in different ways, playing out in narratives drafted long before the pandemic. Scale and growth have been intrinsic to specialty coffee over the last decade, to the tune of 5.5 percent annually, resulting in a uniquely precarious set of positions — and opportunities — in the face of nationwide cafe shutdowns.

“It’s finally starting to feel like we’re through the looking glass,” says Pilcher, whose role as head of brand at Stumptown puts her in daily contact with wholesale and retail partners across the country, including Stumptown’s own cafe staff in six states. “We feel like we have some sense of forecast and volume week over week.” This comes after a wild six weeks of uncertainty for the company, which Pilcher describes as “waking up to fresh hell each morning.”

Stumptown is technically categorized by the federal government as a small business for employing fewer than 500 people, but in the fancy coffee world it’s one of the big players in terms of scale and identity. The brand, launched in 1999 by Gen X stoner prince Duane Sorenson, was sold first to an investment group in 2011, then again in 2015 to German commodities conglomerate JAB, whose other coffee properties include Peet’s and Keurig. The brand’s business is diversified, with more than a dozen cafes (including airport and roastery tasting rooms) plus direct-to-consumer sales online, grocery store stockists, ready-to-drink products, and wholesale partnerships with more than 100 independent cafes around the world.

All of Stumptown’s cafes have been closed since March 17, an agonizing decision that Pilcher chalks up to a lack of guidance from the federal government. Clear direction for Stumptown was complicated by the multi-state reality of its cafe network. “Because there wasn’t a total federal mandate to lock down everything, we were constantly having to look and evaluate what the governors were saying: Cuomo in New York, Kate Brown in Oregon, leaders in Chicago and Louisiana. No one wants to let go of their whole staff and say ‘Welp, see ya later, nobody knows what will happen next.’” More than 130 baristas and cafe staffers were laid off by Stumptown, roughly a quarter of the company’s total workforce. Per Pilcher, Stumptown paid these hourly employees through April 4.

Retail closures are significant for Stumptown, but Pilcher says online sales are way up — as much as 250 percent over the last month — and grocery sales are up 60 percent. Cold brew season is just around the corner, a busy time of year for Stumptown. The brand helped popularize the craze over the last five years with its “stubby” bottled product, which has since been spun off in a series of collaborations with cult oat milk purveyor Oatly. “We have no idea what’s going to happen next with our cafes,” says Pilcher. “But I can tell you now that we’re working to get into Costco.”

Wonho Frank Lee/Eater LA

Los Angeles indie coffee brand Go Get Em Tiger (GGET) occupies an interesting middle space in today’s current coffee scale. GGET started as a single, tiny pop-up in 2012 and has grown to include a network of nine cafes and counting and a massive production facility in the industrial city of Vernon. “It feels like everything we had carefully placed together was blown up and scattered,” says co-founder and CEO Kyle Glanville. “But the good news is we still have all the pieces. What’s hard is figuring out how they fit into the current landscape — like, apparently now we’re also a grocery store.”

He’s not joking. GGET’s coronavirus pivot has included a new grab-and-go selection of pantry staples, from bread to flour to cold brew concentrate and in-house baked goods. Half of GGET’s cafes are closed outright; the rest have instituted an order-by-app system allowing customers to still get drinks.

Glanville describes the initial onset of coronavirus shut-downs in harrowing terms. “For two weeks it felt like chaos; I was running on pure adrenaline, never sleeping, communicating with our investors, team, and stakeholders around the clock. It’s finally been this last week where I’ve crashed down to earth and realized that in order to keep going, we need to get deliberate about how we’re operating and what the next phases are.”

GGET’s team of 128 employees has been reduced by just four individuals, but many hourly workers have experienced a serious slashing of hours. Newly instituted grocery items now account for 25 percent of cafe sales, but GGET has spent the last few years aggressively expanding its online footprint in the form of subscriptions and a la carte web sales, and much like winemakers, GGET has seen these “direct-to-consumer” investments pay off: Glanville tells Eater that web sales are up 300 percent, and subscriptions have doubled.

Glanville and his team are now juggling commitments with landlords — the majority of whom have been understanding, he tells Eater, with one significant outlier that may ultimately result in the company’s first permanent store closure. Cafe business is modified but busy at the brand’s open locations, and Glanville feels serving the community at this time could have major positive outcomes for GGET in the years to come. “The feedback has been incredible, which is really heartening — we’re learning a new thing. Grocery is not going to disappear anytime soon, even post vaccine.”

Now Glanville is hoping to give hourly employees more work by amping up coffee availability for underserved essential workers. “We’re working more with different non-profit orgs that deliver food to health care workers,” he says. “It turns out a lot of hospital workers are getting fancy pizza but no coffee. So we’re sending out morning coffee to hospitals every day this week.”

In New York, Everyman Espresso, an independent micro-chain with three locations in Manhattan and Brooklyn, is 100 percent focused on supporting hospital workers. Co-owner Sam Penix is a fixture at the company’s East Village location, which he has owned and managed since 2009 and worked at since 2007, eventually moving into an apartment just a few doors down from the space. Everyman, which had been practicing a kind of socially distanced takeout service model, fully closed on April 4, and Penix immediately pivoted into a new model under the moniker Fuel Frontlines.

Penix and a team of out-of-work couriers are bringing coffee to workers at hospitals across the city, documenting it all in a daily diary on Instagram. One recent delivery — to Beth Israel Hospital on the Lower East Side — included $2,000 worth of pre-brewed coffee and another $3,700 of breakfast foods and pastries. Each cardboard carafe of coffee is delivered adorned with a handwritten note from Penix and his team: “THANK YOU WOODHULL” for the Woodhull Medical Center in Bed-Stuy, or “WE [HEART] U LENOX” for the night shift workers at Lenox Hill Hospital.

This work has a dual purpose: It sends much-needed coffee to hospital workers around New York City, and it keeps Everyman in business when normal cafe operations have ceased. By visiting Fuel Frontline’s website, supporters anywhere in the world can donate to provide coffee to essential workers in denominations ranging from $25 to $1,000. This in turn keeps Penix working under the Everyman flag, allowing him to continue ordering and brewing coffee in partnership with the company’s longtime roasting collaborators Counter Culture Coffee. As far as coronavirus-era corporate pivots go, this one could make or break Everyman Espresso’s ability to reopen once the world returns to the new normal.

Everyman Espresso and Go Get Em Tiger are just two of dozens of brands around the country — indeed, around the world — working overtime to bring coffee and support to hospital workers, along with chefs and chef-driven organizations doing the very same. This speaks to the wider utility of coffee, the idea that it’s something we all need to power through when shit gets rough. In this powering through, there’s hope for the long-term health of the coffee industry; it’s capable of making a crucial place for itself in even the worst times.

Coffee entrepreneurs are also starting to launch Kickstarters for their new projects, after a near-total shutdown of such efforts during the month of March (an astonishing rarity in a crowdfund-happy industry). Where I live, in Portland, Oregon, there are at least two exciting rebrands: Reforma Roasters, the new roasting identity from Angel Medina (formerly Kiosko Coffee) and Cafe Reina (formerly the Arrow Coffeehouse), whose founder Erica Escalante has renamed the company and installed walk-up buzzer service to better manage social distancing.

On April 16, a package arrived at my home from a new coffee company called Taika, the brainchild of Kalle Freese. Freese was the creator of Sudden Coffee, a San Francisco brand (and Y Combinator graduate) largely responsible for kicking off the specialty instant coffee micro boom. He exited Sudden a few years ago and is choosing this moment to launch Taika, a blend of cold brewed coffee with a range of adaptogens, “functional mushrooms,” and herbal additives like lion’s mane and cordyceps. The coffee was delivered cold-chilled to my door and Freese promises two-hour delivery for users in San Francisco, LA, and New York City. Their brand slogan — “Want to accentuate reality? Ask us how” — is a bit of an eye roll now, but the product is beautiful, and the coffee is clean and easy to drink. (You can hardly taste the ashwagandha.)

Freese acknowledges this is a strange time to be launching a company, but Taika has been working on roll-out for half a year, so why not now? The world won’t wait. “We have to launch sometime,” he tells me. “People are still drinking coffee.”

Jordan Michelman is a freelance food and wine journalist in Portland, Oregon, and the co-founder of coffee publication Sprudge and Sprudge Wine.