How Did the Lockdown Hit the Coffee Industry?

Shanghai began community lockdowns in mid-March, and a Weibo topic, I want to buy coffee, drew over 340 million views. Cafes lost dine-in service and income fell sharply, with some small shops considering transferring their businesses. Coffee bean roasters rerouted supply chains as Shanghai warehouses stalled, and green bean traders set up temporary warehouses in other cities.

Cafe owners interviewed during the early phase still covered costs through takeout and bulk orders, but a full lockdown would halt business entirely. Under price hikes and cash flow strain, small shops turned to drip bag coffee and online sales. The episode shows how tightly the coffee industry chain depends on logistics and on cafes as social venues.

Shanghai began implementing community lockdowns in mid-March, catching coffee lovers off guard. A Weibo trending topic, "I want to buy coffee," garnered over 340 million views, reflecting the close connection between coffee and daily life. However, cafe owners are facing the dilemma of suspended dine-in services and sharply reduced income, with some small shops even considering transferring their businesses after the lockdown ends. Meanwhile, coffee bean roasters are adjusting their supply chains due to stalled warehouses in Shanghai, and green bean traders are setting up temporary warehouses in other cities. This article will delve into the impact of the lockdown on the coffee industry chain and how small shops can find a way out under the pressure of price hikes and cash flow strains, including strategies like switching to drip bag coffee and online sales, while also paying attention to the developments of brands such as Front Street Coffee.

Starting from mid-March, communities in Shanghai successively entered a lockdown state. This sudden control caught many coffee-drinking habitues off guard, so much so that during the 6-hour "outing" period allowed for residents to go out and make purchases, the phrase "I want to buy coffee" shot to the top of Weibo's trending topics, with the topic's views exceeding 340 million.

This trending topic sparked heated discussions among netizens, with many debating whether Shanghai residents truly cannot live without coffee and whether the large number of cafes in Shanghai is related to this. In reality, not everyone relies on coffee; for some, it is more of a lifestyle habit. Nor does every coffee enthusiast seek out specialty or freshly ground coffee. The value of cafes lies more in providing a social venue or catering to those with a demand for specialty coffee.

After some communities in Shanghai were locked down, several cafe owners revealed in interviews that due to the pandemic's impact in certain areas, dine-in services were suspended, and they could only rely on bulk orders and takeout, with daily turnover affected to varying degrees.

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However, at that time, there was not yet a full-scale large-area lockdown, and a small number of takeout orders and regular customers' takeaway could still cover costs. But if a large-area lockdown were implemented and business became completely impossible, the operating pressure would be unbearable. The interviewed owners at the time believed that if the lockdown lasted only a few days, cafes could still hold on after reopening on schedule.

Yet events developed beyond expectations. The number of confirmed cases soared rapidly, and all industries could not resume work as scheduled. Many cafe owners faced zero income while still having to pay rent, labor, utilities, and other expenses, as well as material losses. Small numbers add up over time, and these amounts are not insignificant.

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Recently, several cafe owners in Shanghai have expressed on WeChat Moments that they are considering transferring their shops after the lockdown ends. The reason is straightforward: they have no money to continue "competing" in the rat race. Life must go on, and they cannot sink all their living expenses into it. Cutting losses in time is the last resort.

Some owners mentioned that although the Shanghai Municipal Government's "Several Policy Measures to Fully Fight the Pandemic, Assist Enterprises, and Promote Development" proposes reducing corporate burdens through tax cuts and rebates, rent reductions, and fiscal subsidies, based on the current situation, these policies offer limited help to small shops.

On one hand, many small shops lack sufficient funds to tide over until reopening after the lockdown, and to offset costs, cafes may see a wave of price increases. On the other hand, even after resuming business, major cafes will launch promotions to attract foot traffic. Even without raising prices, small shops will find it hard to "compete to the end" with chain brands that have strong cash flow.

This is the reality. Even with enough funds to survive the lockdown, how to stabilize and retain customer flow afterward remains a challenge. According to observations by some owners, there will be a wave of stimulus consumption after the lockdown ends, but it won't last long. Moreover, during home confinement, people have started getting used to brewing coffee themselves, which will also change consumption habits. Therefore, after cafes reopen, they cannot rely solely on beverage sales.

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If it is confirmed that existing funds can get through the lockdown, owners need to consider not just attracting customers with beverage price discounts, but promptly launching easy-to-brew coffee (such as drip bag coffee) to cultivate consumer loyalty to the brand, while also offering coffee bean promotions and conducting online sales. If everyone crowds into beverage price discounts, small shops will always be the ones hurt. When you can't compete on beverage prices, you need to find another way to attract and retain customers.

Besides cafes in Shanghai, cafes in other regions have also been affected by the Shanghai lockdown. Many coffee bean roasters' beans are stuck in Shanghai warehouses—people can't get in, and goods can't get out—resulting in insufficient inventory for many coffee bean brands, and some coffee bean prices have also been adjusted.

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To solve this problem, some green coffee bean traders have set up "temporary warehouses" in other cities, so that coffee beans arriving by air are first sent to other cities, and after inspection by relevant departments, are gradually shipped to areas that can receive express deliveries, reducing costs from port cargo storage. According to the latest news from Coffee Workshop, the first batch of 2022 new-crop Huakui 6.0 green coffee beans, which everyone has been eagerly awaiting, has arrived in Guangzhou.

During this period, no industry has it easy. What we can do is cooperate with various pandemic prevention actions so that the outbreaks in all regions can end as soon as possible, and everyone can return to normal life quickly.

Image source: Internet

For professional coffee knowledge exchange and more coffee bean information, please follow Coffee Workshop (WeChat public account: cafe_style)

For more specialty coffee beans, please add the private WeChat of Front Street Coffee (FrontStreet Coffee), WeChat ID: kaixinguoguo0925

The above content is compiled by CoffeeHunters, a coffee news website.