The Stumptown Coffee in Portland Or. has reopened on June 1, as have eight of theirother cafes, … [+]
Courtesy of Stumptown Coffee
Because so many people are staying home and not going out, Stumptown Coffee’s online coffee bean sales have risen 200%.
And it’s now selling five-pound bags to meet the demand. Its grocery sales are up 85%.
Of course, the pandemic has also been a mixed blessing for Stumptown’s store sales. All of its dozen cafes have been shuttered since March 17.
Overall, Stumptown Coffee’s business is down 20%, explained Mallory Pilcher, its director of brand from its Portland, Or. headquarters. “With everyone closing down, we saw our enormous channels shift from retail and wholesale to our consumer packaged goods grocery store business and direct to consumer business,” she said.
Stumptown Coffee has cachet. For many fans, it’s the antidote to Starbucks, the global powerhouse, which some perceive as too corporate.
But many people don’t realize that Stumptown also has large corporate ownership, despite its modest size. It was sold to JAB Holdings, the global food powerhouse that also owns Peet’s Coffee and Keurig, so it is part of a conglomerate.
Stumptown was opened in Portland in 1999 by Duane Sorenson. But he cashed out in 2011, selling it to an investment group.
While Starbucks numbers over 31,000 stores globally, Stumptown Coffee had only 12 cafes nationally before the pandemic hit, including four in Portland, three in New York City, two in Los Angeles and one each in Chicago, Seattle and New Orleans.
It’s looking to open a new café in Kyoto, Japan later this summer. It also has a partnership with trendy Ace Hotels, where four of its cafes are situated.
To keep its cash flow strong during the pandemic, it was forced to close three of its 12 cafes permanently—in Seattle, Chicago in the Ace Hotel and downtown Los Angeles.
“We needed to make sure we can continue to provide the full benefits to the staff that remains, so we had to close them, in order for us to be profitable,” noted Pilcher.
But on June 1, the remaining nine cafes reopened across the country for walk-up sales, not for sit-down dining. It has installed Plexiglas partitions to ensure employee safety, employees will be wearing masks, and customers, where appropriate, are asked to wear masks.
Stumptown Coffee is sold in over 4,000 supermarkets nationwide including Whole Foods, Kroger’s and many specialty stores. In addition, it sells to over 2,000 independent coffee shops.
To meet the growing coffee demand, it was roasting beans from 5 a.m. to 9 p.m. at its two plants in Portland and Red Hook, Brooklyn. Staff, wearing mandatory masks, was working on split schedules to maintain 6-feet of distance.
But its supermarket coffee bean sales have been spiking. Sales have risen about 85%, Pilcher said, which she attributes to Stumptown’s strong brand recognition. “A lot of people are discovering us in grocery stores for the first times,” she underscored.
Cold brew sales have dipped about 30%, because most are packaged singly, not multi-packs. Because people are wary of going shopping, they’re stocking up and avoiding singular packages.
Due to many cafes shuttering during the pandemic, its wholesale business to thousands of individual espresso bars and restaurants nationwide has sagged. “It s incomprehensible that some of these renowned restaurants aren’t going to come back,” Pilcher noted.
What has been the message that global corporate owner JAB Holdings has conveyed to Stumptown Coffee about the pandemic? Pilcher said candidly, “We don’t hear much from JAB. We’re small, and I assume that they have larger fish to fry. We’re nimble and quick and have been able to pivot.”
In the future, Pilcher expects that the ecommerce business will continue to grow and take-off. During the pandemic, it’s learned invaluable lessons such as becoming more adept at consumer grocery sales and improving meal delivery kit sales.
“I expect Stumptown to become more aggressive digitally because of the rapid growth in ecommerce sales in the future. That was the area of our least investment,” she noted, and now she expects stepped-up investment in the future.