Branded coffee suffers ‘profound impact’ of homeworking

Neighbourhood cafes and independent coffee shops are set to benefit from a permanent towards more shift to homeworking, Allegra founder Jeffrey Young has told MCA.

He told MCA’s Food to Go conference that the fewer numbers of office workers in major cities would have “a profound impact” on the high street coffee shop brands that were used to very high footfall locations.

It would not be the end of the traditional office altogether, but there were structural changes ahead, he said.

“One of the things we are seeing as a really major trend is the rise of local independents,” Young said. “This is a different point from the rise of neighbourhood cafes. We are seeing consumers being much, much more inclined to want to support a small independent player over a big chain.”

Brand loyalty was an important trend that could be expected to continue. Young said there was an opportunity for young, new businesses that wanted to grow that might not have been able to get good sites before. “There is a great opportunity for local brands,” he said.

Drive-through was an opportunity – “a hero development” with 56% of consumers post-Covid saying they would buy more beverages via the channel.

“We expect to see a lot more drive-through available from the likes of Costa, Starbucks and others”.

Allegra’s World Coffee Portal does not expect recovery in overall market value of for perhaps up to five years, following more than 20 years’ “unbridled growth”.

Some 2% of outlets closed last year and Young said he did not expect the number to recover for at least another three years.