Drinking coffee has become a tradition for Indonesians, from those who live in villages to urban areas. The culture of drinking coffee is also indiscriminate from students, workers, and retirees. It somehow triggers people to build more coffee shops across the country. Having a coffee shop business is tempting though because it can generate a lot of turnovers, and gain profit in the end. If you directly purchase at farmers costs only Rp80.000 per kg, while the cheapest coffee sells Rp15.000 per cup. Imagine, how much the net profit you can get a day.

There is no wonder why people have transformed their businesses into a coffee shop business. Unlike the other culinary businesses, the coffee shops tend to sell both its taste and its creative idea. There are many coffee shops that have unique names and interiors. By giving its unique identity, people would remember easily, and they can go back and forth to the coffee shops.

Unfortunately, the ongoing coronavirus outbreak has disrupted the markets, caused mass public shutdowns, and inspired anxiety all over the country. In March, the government reported that many food and beverage industries, including coffee shops, have experienced a decline in sales by approximately 30%, since coronavirus entered the country.

The government also mentioned, if the sales continue declining, there will be much food and beverage industry closing down. The coffee retailers need to prepare for a potential disruption in business. At least, they need to best prepare for the unknown possibility. In addition, they need to consider their obligations, both to co-workers and the community, to keep the public eating spaces as safe as possible. Before getting into the survival kits for local coffee shops, let’s take a look into how bad the situation is during the pandemic.

The Coronavirus Invasion of Local Coffee Shops

According to local news, Anomali Coffee is fast adapting to the situation, as they close down the coffee shop, and instead of serving dine-in, they chose to transform their meals and coffee into the perfect packaging to takeout and delivery. Such as, they provide take away home food, a litre bottle of coffee, and coffee powder to brew at home.

The Ministry of Industry noted that Indonesian coffee sales fell around 50% – 90% during the epidemic. The Minister of Tourism and Economy Creative, Wishnutama urged that coffee entrepreneurs have to learn how to take the challenges and opportunities during and after the outbreak. The purchasing power in the midst and after a hard time would be so different.

The Minister of Industry, Agus Gumiwang added that coffee sales in Indonesia have declined since the physical distancing regulations. Therefore, coffee retailers need to think of alternative ways to bear the industry. The coffee industry in this country is very promising. As the country is 4th largest coffee bean producing, after Brazil, Vietnam, and Colombia. In 2019, the coffee production here had reached 720.000 tons with the export value of processed coffee products of US$ 610 million.

Coffee farmers in Aceh complained about the drop in selling price up to 40%, from Rp10.000 fell into Rp5.800 per bamboo. In fact, there are currently 1.204 small and medium industries that process local coffee beans from local farmers. After all, the government has to take apart to make it survive through the pandemic. If not, the coffee industry would be stuck and have a little chance to remain open. Thus, there are things to do to minimize the effect though!

The Strategies To Survive

As we know it, over the past few years, the local coffee industry had seen a massive surge in popularity and helped boost Indonesia’s economy. However, the current situation with COVID-19 limits everybody’s movement and consequently slows down the growth of every sector of the economy, especially the local coffee industry.

The Ministry of Tourism and Creative Economy has teamed up with Tokopedia to set the campaign, #SatuDalamKopi to unite in helping to support the economy of the local coffee industry. There are around 800 coffee stalls to join the campaign on Tokopedia. The government fully supports the campaign and gives their appreciation for those who are involved. The effort is to maintain the sustainability of the coffee industry, also support the national economy.

They hope the collaboration can help coffee players to keep and expand their businesses. Other than that, the players have to innovate and adapt to the condition and limitations, through the digital platform. With the campaign, the coffee players are now broadening the business and selling coffee online is easier for the consumers. Now, which means by getting your favourite coffee to your doorstep, you already helped the support of the local coffee economy.

Another campaign, called #togoisnotacrime was made by 15 local coffee shops. These are, Ottoman’s Coffee, Amnesty Coffee, Two Coffee Beans, Common Ground, Copper Club, Kavove, Karakter Kopi, Kopi Lima Detik, Lokal, Obar Bali, Pigeonhole, Say Something, Sensory Lab, SOSITI, and ST. Ali. They collaborated and asked the customers to enjoy the coffee while you are at home, and promoted on social media using the hashtag #ngopidirumah (drinking coffee at home). The campaign also encouraged them to buy coffee for takeaway and delivery through Go Food and Grab Food.

These two campaigns hopefully can reassure people that they do not need to go to a coffee shop to drink the coffee, because, in the end, you can enjoy it with the same quality and taste. There are other ways to survive the coffee business too. Your coffee shop can be open, but it is only for a takeout order. However, the takeout order is working well, some people might be getting bored, and want to go outside to buy something. This could be an alternative too.

Offering a ready-to-brew product can fulfil your consumer’s craving. You can sell both its beans and powder, so they can enjoy coffee at home, which is much safer for them. Also, do not forget to throw the promotions, such as providing the coffee package, or buy one get 1 free, or serving a litre of coffee bottle, which you can consume within 3 days.

To believe every coffee shop is somehow unique and has its own place in the market. In the current critical time, it is necessary to support each other for the continuity of the local coffee businesses and to survive together.

As we are witnessing, the COVID-19 pandemic has put its impacts on every aspect of society worldwide. Economics is also a sector that has severely suffered from the outbreak, almost all of the production and services are crippled and the F&B industry is not an exception. Facing the business pressure of the pandemic, instead of choosing to give up and float, the Vietnamese F&B market witnessed many brands dare to think, dare to do, innovate, and test to survive. They choose to remain fighting, to protect their own brand and their employees. This is also a matter of Vietnamese coffee shops. This article covers how these coffee shops can survive during the crisis then we can see whether their abilities to recover are potential or not.

How are Vietnamese coffee shops influenced by the COVID-19?

Under the global pandemic, almost no industry is out of its sphere of impact. In Vietnam particularly, coffee shop business is one of the F&B industry group that has suffered a great loss due to this outbreak. The decline in the number of tourists, the limitation in the number of residents in crowded places have led to a sharp drop in revenue, while shops still have to pay very high rental costs, which are the main reasons for the big trouble of coffee shops’ owners.

According to the owner of a restaurant and a brand of coffee in District 1, this company has been in a pathetic condition in the season when domestic and international tourists both declined, of which the coffee system sometimes dropped by 50%. customer.

Meanwhile, the Doha coffee shop at 223 Phan Xich Long, the outstanding culinary street in Ho Chi Minh City, also hangs a sign to stop operating from February 24, even though it was opened on September 9, 2019. This business admitted that the COVID-19 epidemic had an impact on reducing the number of visitors.

According to Mr.Vo Duy Phu, the director of commerce and marketing, The Coffee House, the Vietnamese coffee chain, said the COVID-19 epidemic had disrupted the system's plan to accelerate the opening of 100 restaurants in 2020. According to the plan, right after the Lunar New Year, the chain will open more points of sale, but the impact of the epidemic makes this plan must last into May and the last months of the year.

How Vietnamese coffee shops survive during the crisis?

We have no longer heard any invitations like “Cafe?” or “ See you later at the coffee”. The whole society is conducting social distancing whether it is a crowded city or a small street. Young people tend to visit cafés after a meal at the restaurants or enjoying a movie at the cinema. Thus, the closure of these establishments has indirectly impacted the coffee store chains. So, facing this challenge, the coffee shops owners must find a way to save themselves.

Change the business model

In the epidemic situation, in order to still meet the needs of customers, have revenue but still ensure the implementation of the policy of social distancing, not gathering in crowds, the “giant” coffee shops of Vietnam such as The Coffee House, Highlands Coffee, etc. has shifted to online-home delivery business model.

Highlands Coffee has just announced to halt all services at its stores, excepting take away, as of the end of March 31. During this time, the cafés will only serve for takeaway and online orders via food delivery applications.

Similarly, Starbucks has also temporarily halted serving customers at its stores in the city until the end of the month. The Coffee House has also begun offering home delivery to keep the virus from spreading.

With the F&B brands that have been strong in the delivery segment from before, such as The Coffee House, Starbucks, etc. this is the time for brands to assert the role of the platform, while promoting to make the most of the potential, enough revenue to "stand" through the pandemic.

Furthermore, under the great competition of brands, every brand must have their own measures to attract attention and actively interact with customers. This is the "golden time" for new creations, from attractive deals of brands such as mass discount, hourly discount, combo purchase, earning points, giving drinks, etc.; to new delivery methods such as fishing rods, ordering in front of the gate, ship hotpot and home services, etc.

In recent times, aiming to increase their foothold in the local market, Highlands Coffee, Starbucks, and The Coffee House have accelerated expanding their networks with 240, 49, and 145 stores across the country. While making online ordering available, their performance depended heavily on the physical stores.

Achievements after efforts

The methods of online selling with the promotion and reasonable promotion strategies have brought positive features for some brands. According to CafeF, some coffee brands in Vietnam also increased online sales during this period:

• Starbucks Vietnam: Since the end of March 2020 when major cities request to close, Starbucks Vietnam's revenue from delivery has increased by 50% compared to the average of February sales.
• The Coffee House: With discount throughout, orders from 50,000 or more are free shipping. Sales of online sales as of March 29, 2020 increased 30% from the previous week, as all The Coffee House shops were closed.

These remarkable achievements are the results of the creativity and flexibility in the online business methods of Vietnamese coffee brands, cafe and milk tea establishments from big to small. In a time when the disease is still unpredictable, the online selling time will still maintain an important role, even after the epidemic, this can become a long term trend caused by the specific changes in customers’ demands.

The role of retaining staff

The pandemic has caused many Vietnamese coffee shops to “reeling” to stay afloat, while many forced their employees to temporarily leave work due to the social distancing and the decline in revenue. The free time has been so long that a large number of staffs may or have to look for new jobs to meet their daily life demands, which is the other leading concern of the shops’ owners. Therefore, the question “ how to retain staffs?” needs to have its answer.

Mr. Phu Vo, Co Founding of The coffee house shared that: “Beside measures to improve the customers’ experience and maintain the online business, we still try to ensure the welfare of employees so that they can have days off but still get paid. Just like that, mutual support is stimulated so no one is left behind. ”

In short, it cannot be denied that no industry is outside the impaction of COVID-19. However, “In a time of crisis we all have the potential to morph up to a new level and do things we never thought possible”. Thus, we can completely believe that Vietnamese coffee shops still keep the business circle running despite any crisis. Hope that the pandemic will end as soon as possible for not only coffee brands but other industries could also come back to their normal status with great business development.