A barista prepares coffee for customers at a coffee shop in Lhokseumawe, Aceh. (Antara Photo/Rahmat)
Coffee Industry Must Find New Ways to Stay Afloat
BY :DIANA MARISKA
MAY 05, 2020
Jakarta. From suppliers to coffee shops, everyone in the coffee industry is finding it hard to stay afloat during the coronavirus crisis, but some have found new ways to claw back at least some of their sales.
At the onset of the pandemic, businesses struggled right away as people stayed at home and stopped visiting their local coffee shops.
The enactment of large-scale social restrictions (PSBB) in several parts of the country, including the capital Jakarta, forced many cafés to close down, at least temporarily.
Everyone in the coffee industry has been affected by the pandemic, from farmers to coffee shop owners.
Sales plummetted and industry players have been forced to invent new business methods.
Ulin Coffee Roastery in Jakarta is one of them. Normally the shop supplies coffee beans to several small cafés, but since the pandemic began in March sales for the supplier have dropped at least 40 percent.
"Demand is down 30 to 40 percent since March," Ulin's operational director Ratih Dewi Amalia told the Jakarta Globe on Monday.
However, she said coffee lovers' appetite seems to have been unaffected by the crisis, something that has given her shop a lifeline the longer the pandemic goes on.
As the price of coffee beans drops, a new business opportunity opens up for suppliers like Ulin: people looking for ways to make a bit of cash during the pandemic are thronging to become resellers.
"The price of beans has gone down a lot. More people now want to become resellers. We're negotiating with half of them right now," Ratih said.
Selling single origin beans from Aceh to Papua, Ulin has not exported since 2019.
Ratih said even though the price of beans has dropped, export volume seems to have not been affected by the pandemic.
"From what my friends have been telling me, price has dropped but export [volume] has remained pretty much the same," she said.
Data from the Central Statistics Agency (BPS) show coffee export value dropped by 2.3 percent in January-February compared to the same period last year, despite a 9.07 percent growth in volume.
The Industry Ministry has warned the coffee industry might face its biggest challenges during the pandemic as export destinations impose lockdowns and export requirements become more complicated.
Industry Minister Agus Gumiwang said industry players have to get creative to find alternative sources of income aside from export.
"Declining global demand [for coffee] is a big problem we have to solve with innovation and creativity," Agus said in a statement on April 23.
Online Sales to the Rescue
One way to maintain income for coffee suppliers and shops during the pandemic is online sales.
Agus said marketing and delivery service should be optimized to increase online sales.
Ulin subsidiary Glasah Mana Coffee Shop has been doing just that. Sales had dropped 70 percent for the shop since the pandemic began but it can count itself lucky since it also sells coffee beans from the roastery.
Selling beans and takeaway coffee online have allowed the shop to survive.
"Even before the PSBB began, we only allowed takeaway and online orders. We didn't allow customers to hang out at the shop. But we've remained open selling beans and takeaways," Ratih said.
Glasah Mana now sells coffee in bottles, something they'd never done before, to adapt to the new normal under the pandemic.
"We're collaborating with Fullmoon Coffee for our bottled coffees. We're only starting out, we're taking baby steps here," Ratih said.
Uncle Jo Coffee Shop, which has five outlets in Greater Jakarta, is implementing a similar strategy/
As no more customers were coming into the shop, sales immediately dropped at least 30 percent during the beginning of the pandemic.
But co-owner Upic Arsellia said sales have since climbed back up as customers get into the habit of ordering their coffee online.
Uncle Jo, like many big-name coffee shops in the city do during the pandemic, now sells coffee in plastic bottles almost as large as a fuel can.
Arsellia said a strong online presence is also paramount during the crisis.
She said the café's more than 11,000 followers on Instagram expect frequently updated content and even more frequent promos.
"We currently offer free delivery for our customers," Arsellia said.
The café partners with on-demand meal delivery services Go-Food and GrabFood to keep coffee lovers satiated at home.