STiR coffee and tea magazine

32 STiR coffee and tea / Issue 2, 2020 (April / May) Lessons in Retail Lessons in Retail Resilience from China Resilience from China By Dan Bolton YUNNAN, China In February, Liu Minghui reacted like coffee executives in any country facing an unfolding disaster — he donated 13,500 cups of instant coffee to frontline medical staff and first responders. Liu, chairman of Yunnan-based Ai Ni Group, would eventually ship truckloads of China- grown brew-in-the-cup coffee to the Red Cross, the Xianning Central Hospital in Hubei and the Charity Foundation of Badong County. The final tally topped 200,000 cups. His effort and similar gestures of support by roasters across the country likely created a lot of coffee enthusiasts, given the extraordinary stress and exhausting hours required of those caring for China's 83,000 COVID-19 victims. The magnitude of the novel coronavirus contagion is altering consumer behavior globally. Prior to the crisis, market researchers estimated China's annual growth at 8.7% through 2025. Revenue, which was projected to increase 11.4% year-over-year, contracted dramatically during the first quarter. The sudden shock to China's $9.1 billion coffee industry is a bellwether of what lies ahead. Lessons to heed: • Quarantines and government-ordered closures of coffee shops and tearooms in China, Italy, Germany, France, and the US threaten the essence of a "third place." These popular gathering places were shuttered at precisely the moment companies ordered millions to work at home, isolated and fearful. Universities idled students; transit terminals lay barren, malls vacant. Stock market values nose-dived and consumer spending slowed. The mass layoffs and economic recession that follows will upend the retail segment as we know it. • Online order, payment, and on-demand delivery all surged. The out-of-home segment approaches 75% of sales in China where food delivery apps have an estimated 335 million Chinese coffee grower Ai Ni Group donated hundreds of cases of coffee-in-a-cup to frontline medical staff in Wuhan Photo courtesy Ai Ni

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