In this exclusive Q&A, we talk with Ryan J. Stansbury, CFE, vice president of franchise development for PJ’s Coffee, about how the pandemic has affected their coffee shop locations, how they have managed to stay afloat, and what the future may hold for coffee shops throughout the U.S.
Franchise Chatter (FC): How do you think the coffee industry as a whole has managed to stay so strong even as other industries were struggling during the pandemic?
Ryan Stansbury (RS): According to a recent report from the National Coffee Association U.S.A., coffee is the No. 1 beverage of choice in the U.S., surpassing tea, soda, and even tap water – and Americans consume 646 million cups of coffee per day. People love their coffee, and that makes the industry relatively resilient to economic turmoil. It is the world’s second-largest commodity and reels in over $100 billion per year.
Coffee lovers are going to continue to consume their favorite beverage and visit their favorite coffee houses. The convenience of the drive-thru, which represents around 65% of our total sales, has also been instrumental in maintaining strong sales during the pandemic. With a drive-thru, customers did not have to leave the comfort of their vehicle for their daily cup of coffee.
FC: How did PJ’s Coffee adapt when the pandemic first hit, and how did you achieve success while so many other businesses had to close their doors?
RS: Luckily, we already had so many systems in place to allow for mobile ordering and pickup options. Our mobile app has allowed our guests to order, pay, customize their favorite products, earn rewards, and find their nearest PJ’s Coffee locations all from a few clicks on their device.
We also implemented proper social distancing and sanitization protocols at each PJ’s location to ensure consumers remained confident in their ability to safely patronize our business.
FC: How has your leadership team helped franchisees throughout this unpredictable time?
RS: Many of our franchisees qualified for government assistance and financial aid. However, many needed help navigating through the application process. We worked with all of our franchisees, aiding them through the process to secure the aid they qualified for.
FC: In what specific ways has having drive-thrus at so many of your locations benefited you, and do you see the drive-thru, takeout, and delivery trend continuing?
RS: Pre-COVID, our PJ’s generated about 65% of their total revenue via the drive-thru. During the pandemic, this percentage was even greater. As mentioned previously, drive-thru customers did not have to leave the comfort of their vehicle for their daily cup of coffee. As a result, our drive-thru locations were up 12.1% in 2020 compared to 2019 and averaged 37.2% more revenue than locations without drive-thrus.
FC: How did the idea for drive-thru only locations come about?
RS: It is a model we have considered for some time but recently deployed. This gives us a model that is a little less expensive compared to a café with a drive-thru and it is a little less involved in terms of operations since there is no inside guest experience to manage.
FC: How many do you currently have?
RS: So far, three with a handful more in development.
FC: What would you say is the outlook for coffee shops in the U.S. in a post-pandemic world?
RS: As vaccines continue to rollout, more and more people are already returning to their favorite coffee shops. The industry is strong and resilient. We will continue to see strong growth in the industry and across the PJ’s brand. The coffee industry itself is expected to continue to grow by another $50 billion.