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Veneziano Coffee Roasters shares its advice for cafés that want to remain profitable while facing current industry challenges.
Over the past four years, the coffee industry has proven just how adaptive and innovative businesses can be as they tackled obstacles such as COVID-19, staff shortages, inflation, and technical advancements.
Veneziano Coffee Roasters, owned by parent company Nomad Coffee Group, operates five flagship cafés around the country. Sales and Retail Manager Michael Taylor says this allows the roaster to have a keen insight into the challenges the café industry is currently experiencing.
“We’ve adapted our own venues to meet the trials of today’s market. This involves looking at things like the way we roster staff, menu development, and pricing. We constantly monitor our cost of goods to ensure we’re maintaining profitability while still operating with the customer in mind,” he says.
Michael thinks one of the biggest challenges for cafés this year will be keeping up with cost pressures.
“Cafés aren’t generating margins like they used to. The price of goods, employment, and external factors like cost of living continue to rise, meaning businesses need to find new ways to pivot and reduce their expenses,” he says.
“Another test is fostering brand awareness in today’s congested market. Even with a social media presence, you need to find ways to stand out, so when people are searching for somewhere to enjoy a great cup of coffee, they look to your brand.”
Despite these challenges, one business aspect Veneziano Coffee Roasters won’t sacrifice is its focus on sustainability.
“Although we’re always looking for ways to reduce costs, sustainability remains a key focus. Being a B Corp-certified company, we continue to embed sustainable culture into our every day. This includes long-term waste reduction strategies like partnering with social enterprise Reground to ensure our coffee grind waste is recycled,” Michael says.
Another brand under Nomad Coffee Group, New Zealand-based Flight Coffee, has seen its retail partners simplify their business models in a number of ways.
“This includes savvier staff rostering due to difficulty recruiting the right people. Café venues are also reducing their footprint, opting for smaller spaces for a more profitable model,” says Flight Coffee Creative Director and Founder Nick Clark.
“Café owners are streamlining their business to make it easier to operate, and for consumers to understand what they have on offer.”
Nick says it’s important for café owners to stay nimble to alleviate these issues.
“You need to be able to pivot easily depending on which way the market goes, while still maintaining your core focus and being able to execute it. You’ll see Flight Coffee implement some new, refined concepts this year that will better assist our wholesale accounts to provide a core coffee offering,” he says.
“During COVID-19, businesses actioned quick solutions to stay afloat. Now it’s about refining those solutions so cafés can survive long-term.”
What’s interesting, Michael says, is the hospitality industry continues to grow.
“Even with these challenges, we’re still seeing new cafés opening across Australia and New Zealand. However, the market size hasn’t changed due to existing downsizing. This means the share of wallet is being challenged, and businesses will need to find ways to stay profitable,” he says.
One café in Ashburton, Victoria, that hasn’t shied away from expanding is JoeFrank Café. Fabian Crea, along with his siblings Massimo and Romina, opened the café in 2019.
“My brother and I started working in our aunt’s café, Santucci’s, in the late 90s. We learnt a lot – everyone had to cook, make coffee, serve, and clean. That gave us confidence to open the second Santucci’s, followed by Son of Tucci and Mr Tucci,” says Fabian.
The café, which serves Veneziano Coffee Roasters’ Soar blend as its house roast, has undergone point of sales changes to accommodate the new wave of automation in the industry.
“One example is the adaptation of QR codes on tables to assist customers with ordering, while still maintaining a high level of service,” Fabian says.
“Yet, it was a great change. It helped our staff immensely, reducing their workload and freeing up their time to focus on other important aspects of the business such as staff training and interacting with customers.”
Fabian says customers are now looking for more value and have higher expectations for what they eat and drink. He says his café has had to adapt to this too.
“These days it’s considered a luxury to eat out. For us, that means creating a more innovative menu based on wholesome, simple food that’s done well. Our most unique offering, however, is mum’s cakes. She hand-makes traditional Italian cakes based on recipes that have been passed down for generations,” he says.
For JoeFrank Café, investing in people has always been a priority. Fabian says he will continue to build a positive environment for his staff and customers.
“We participate in team building activities like paint ball, bowling, and escape rooms. We also invite our customers to join the JoeFrank team in trivia nights once a month. It’s important that we develop a strong bond among staff and our community, as this is the foundation of a good business,” he says.
Flight Coffee’s Nick says he is focused on engaging with the end consumer to generate a more positive experience for customers.
“This is something we’ve done quite well in the retail space and want to replicate with our wholesale accounts. We’ve done some great work connecting with local communities in the past 12 months through café activations. Those small interactions go a long way and are something we’ll refine in New Zealand this year,” he says.
Veneziano Coffee Roasters’ Michael says the appetite for coffee quality and knowledge will continue to evolve, along with the call for retailers and café operators to respond with more impressive innovation, education, and a sensitive approach to sustainability.
“The fundamentals of business haven’t changed. The four Ps – product, price, place, and promotion – are still in place, it’s the way we achieve them that’s changing. Finding a way to stand out among competitors will be the key to remaining profitable,” he says.
“It’s great to see the café industry overcome every hurdle it faces and come out the other side relatively unscathed. To have our customers come on that journey with us is really rewarding.”
For more information, visit venezianocoffee.com.au
This article appears in the April 2024 edition of BeanScene. Subscribe HERE.
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