Let’s get small: What cafes will look like in 2021

Phillip Di Bella

Opinion: As the industry corrects course after a challenging year, Phillip Di Bella breaks down what 2021 has in store for all cafes – great and small.

This year has tested all of us. The cafes that have survived have had to make changes to the way they do business, and many of these changes will be permanent, as coffee consumers have shifted their consumption patterns. A COVID vaccine may be on the horizon, but the virus will continue to cast a long shadow on the industry.

Here’s how the cafe industry will continue to evolve in 2021 to arrive at a model that’s efficient, profitable and sustainable for the long-term.

All the small things

We’ve already seen the start of a shift towards smaller footprints in 2020, and that trend will accelerate in 2021. The truth is that cafe owners – especially in the city – can no longer afford to pay for 100 square metres of space, and are downsizing to smaller spaces.

For patrons, that means you won’t be able to expect to just show up and be seated immediately. We’ve seen an increase in the importance of reservations this year because of coronavirus restrictions, and I expect that to continue even once those restrictions are well and truly a thing of the past, because of venues downsizing.

Similarly, I expect the check-in is here to stay – tech companies, cafes and restaurants alike have seen the opportunities in having one app customers can use to check in, browse the menu and pay their bill, and we’re going to see more innovation in that space.

The venues aren’t the only things getting smaller. Menus are shrinking and becoming more streamlined, as cafes realise that bigger isn’t always better. They’re limiting their ingredients and taking a more precise, laser-focused approach.

Of course, there will always be new food trends and coffee blends, but cafes are realising that adding more items to their menu doesn’t necessarily equal more money – rather, too much variety can simply dilute their offering, and clutter up their menu with low-selling, low-margin products that distract from their signature items.

A smaller footprint also means fewer customers, increasing the threat of food being spoiled before it’s served. Trimming the menu back to the favourites and essentials reduces the risk of cafes wasting money on fresh food that doesn’t end up being eaten.

I expect we’ll also see those venues charging higher prices – if they’re getting less patronage, they’re going to need to increase their prices to stay profitable. This is something we’re already seeing at higher-end cafes and restaurants.

In many cases, smaller menus will coincide with shorter trading hours. There’s no need to offer a dinner menu if you’re not open for dinner, after all. The cafe that opens from 7am to 7pm is becoming an increasingly rare sight – it’s becoming common for cafes to cut their opening hours to 7am to 1pm, and I fully expect that trend to continue in 2021.

Not safe for work

As trading hours are reduced, staff will be reduced, too. The uncomfortable reality is that people will lose work as the industry recalibrates.

Staffing is the biggest cost base for a small hospitality business, and when you compare the cost of hiring and training staff with what you can charge for a cup of coffee, it can be difficult to see how the industry can remain viable. That’s why, in 2021, we’re going to see cafes moving increasingly towards automation to limit costs.

The industry is always evolving. Automation is, unfortunately, the future of hospitality, and we’re going to see more and more innovation in that area. The workforce will be diminished, and while there’ll always be a place for the best and brightest at their jobs, others will be looking for new trades and new occupations.

The end of JobKeeper and JobSeeker in March will also have a significant impact. While cafes will benefit from an influx of high-quality staff looking for work, those businesses that have been relying on JobKeeper to retain their staff will have to step up – they’ll need to take a good, hard look at their books and ask themselves some tough questions. If they’re not capable of standing on their own feet, they’re going to close down when JobKeeper does.

It’s a small world after all

Whatever happens in 2021, one thing is clear – the coffee industry needs to present a united front.

It’s virtually assured that the new year will bring with it new laws and regulations. Whether these relate to wage increases, taxes or benefits for the industry, cafe owners need to be at the forefront of the process, so governments at local, state and federal levels aren’t making decisions that significantly impact our industry without industry input.

We need a body to bring together voices from across the industry and close the advocacy gap – a Coffee Chamber of Commerce. That’s the role The Coffee Commune will fill in 2021.

The Coffee Commune will also connect the dots between green bean suppliers, roasters, cafes and restaurants, so they can collaborate and share their skills and knowledge without losing what’s unique about their business.

It’s a small world, but the opportunities are so much bigger when we work together.

Learn more about memberships at The Coffee Commune or get in touch with us.

Phillip Di Bella