Remarkable growth of the direct-to-consumer coffee business during the COVID-19 pandemic
The advent of direct-to-consumer coffee businesses has created various opportunities for the market players. D2C has become the latest buzz in the entire business sector. Due to the COVID-19 pandemic, brands have transformed into D2C avatars to cater to public demand. Therefore, D2C is the brand-new buzz in the beverage business sector.
The Change in Consumer Behavior
During the COVID-19 pandemic, consumers changed the nature of buying. Thus, the companies changed the way of trading. The direct-to-consumer business model has created various opportunities for the market players to begin their journey to growth. As a result, the coffee business witnessed sudden growth.
The era of this business has reached new heights after the onset of the COVID-19 pandemic. Various players including, Craft coffee, Gavelia, Been Box, Blue Bottle, Vega coffee, and Tandem coffee, are growing rapidly in the global Direct-to-consumer Coffee market. According to Astute Analytica, the global Direct-to-Consumer coffee market is forecast to grow at a compound annual growth rate (CAGR) of 15.3% during the forecast period from 2021-2030.
The growth of Businesses
The brands registered a boom in the overall delivery after transforming to a D2C model. The Blk & Bold recorded a 1,400% surge in sales. In addition, it also witnessed a surging demand for products on e-commerce channels, such as Amazon.
Many companies had to entirely retool their business models to emerge in the industry. Thus, D2C became the ideal choice for businesses during the pandemic. Terra Kaffe modified its DTC strategy by promoting relationships with roasters.
Joyride Coffee is a B-to-B start-up that supplies coffee from roasters like Stumptown, Blue Bottle, and Intelligentsia. The company started its DTC cold brew delivery across the United States during the pandemic.
D2C maintains trust and cost-effectiveness
People prefer buying from local businesses because it maintains communication between consumers and buyers. In addition, businesses get a chance to maintain relationships with consumers through their reviews.
The D2C business model has helped firms in offering products at a cheaper rate. In addition, it enhances the chances of the experiment.
D2C Helped Businesses Grow
The COVID-19 pandemic has spurred the demand for coffee worldwide. Market players witnessed rising demand for single-serve coffee brewing devices globally.
The demand for certified coffee products also increased. Through the certification, market players can enhance consumer trust. As a result, it will create various opportunities for businesses in the direct-to-consumer coffee industry.
D2C business doesn’t demand a large workforce. Local brewers can deliver coffee directly to the consumer. Thus, it reduces the cost of labor. Furthermore, the growing demand for natural, high-quality products is expected to benefit the D2C coffee companies.
The emergence of new players through the D2C business model
For years, prominent players like, Nestlé and Tata Coffee have been the dominating players in the market. However, the new era of the D2C coffee market led by players like SLAY Coffee, Rage Coffee, and Blue Tokai has changed the consumers’ choices.
The Introduction of New Flavors
Consumers prefer innovative flavors, blends, and aromas in the end-product. Earlier, people used to grab their coffee from the stores. However, the concept of buying the product directly from the coffee maker has gained popularity in recent years.
For businesses, it is crucial to understand consumer opinion and identify the behavior leading to their choices. Most of the brands began offering D2C services as it allows consumers to communicate directly to the manufacturers. Peet’s coffee registered a high consumer base after the launch of its coffee subscription service.
The Emergence of Rage Coffee
Rage Coffee, a prominent player in the Indian market, recorded substantial growth with its D2C business model. The firm began its market journey in 2018 with a small batch of crystallized coffee. However, the innovative concepts and marketing strategies raised its popularity among the people.
The brand offers innovative coffee products containing the goodness of six-plant based vitamins. This concept gives a distinct look to the Rage coffee products. Moreover, the company is utilizing digital media to promote its products and broaden the brand’s reach. It uses an omnichannel strategy to sell its products online and offline. As a result of its creative marketing strategy, Rage coffee registered a substantial growth of around 300 percent during the pandemic period.
The growth of the coffee business in India during COVID-19
In emerging countries like India, tea has always been a primary choice for the people. However, the market witnessed a growing demand for coffee in the country during the pandemic. India is being considered the third-largest producer and exporter of coffee in Asia. Apart from that, the country is regarded as the sixth-largest producer and fifth-largest exporter of coffee worldwide.
The pandemic-induced fear forced consumers to choose safe methods. As a result, many young brands began providing online sessions to train millennials. Moreover, the pandemic popularized many D2C coffee start-ups like Sleepy Owl, Blue Tokai, Country Bean through social media. The industry is expected to grow more in the coming years with the increasing demand for coffee worldwide.
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