Coffee Shops Are On the Brink Of Losing Their Place In American Culture

There was a time, not too very long ago, when a place like Ox Coffee, a small café in Philadelphia’s Queen Village neighborhood, wouldn’t have been the object of nostalgia. In those days, Ox Coffee was just somewhere to go if you wanted to read a book, catch up with a friend, or maybe see some live jazz. “We wanted it to be a social environment,” Ox’s co-owner, Will Gross, recalled of the seven-year-old café. “It started having almost a Cheers dynamic, where we became very close with our customer base.”

But life is not a sitcom. Thanks to the coronavirus, Ox Coffee — like all the other cafés in Philadelphia, along with cafés in dozens of other states — remains closed for sit-down customers. Ox only opened up for take-out a little more than two weeks ago, as Gross had been reluctant to put his staff and customers’ health at risk. During the nearly three months the space was shuttered, Ox sold its coffee beans to grocers and restaurants, as well as directly to customers through an online store. But that didn’t come anywhere near covering the loss of the café space income, which Gross estimates had been about $1,000 per day before the pandemic hit. “Things were heading in a really good direction, which makes this even worse,” he said. “We had to lay everyone off — the staff is hovering around 10 people — with the understanding that once things are safer they’d be brought back.”

The uncertainty Gross feels is one familiar to café owners across the country, many of whom lack the savings to withstand a closure that has lasted more than three months. The service industry has been among the hardest hit by the closures mandated to fight the pandemic, accounting for 27% of the jobs lost in April, though the industry added back about 1.4 million jobs in May as restaurants started to finally turn the lights back on. While states across the country have reopened to varying degrees, the limited seating required to keep customers six feet apart means many establishments are still operating at half capacity, if not less. States such as New York that were on track to reopen indoor dining have looked at its connection with Covid-19 infection surges and are now reconsidering the move. This could be a death knell for small, independently owned cafés, which typically operate on razor-thin margins. Communities across the country must wrestle with the question, what do cafés offer us in addition to food and drink? And what do we lose when they close their doors for good?

For decades, scholars and writers have obsessed over this notion of the “third place,” a sociological term coined by sociologist Ray Oldenburg in his 1989 book The Great Good Place to describe those social settings separate from our home (that is, the “first place”) and office (the “second place”). Oldenburg’s reverence for the third place — which includes coffee shops, churches, libraries, and bookstores — was never in doubt. “If there is no neutral ground in the neighbourhoods where people live, association outside the home will be impoverished,” he wrote. “Many, perhaps most, neighbours will never meet, to say nothing of associate, for there is no place for them to do so.”

No matter the century nor the continent, it’s not hard to see Oldenburg’s idea of the third place on display. In the Ottoman Empire, coffeehouses were known as “schools of wisdom,” places where people would play chess and talk politics. In 17th century London, it was the so-called “penny universities” — a nod to one-cent coffeehouse entrance fees — where the British intelligentsia gathered to riff on the philosophical questions of the day. And in the U.S. in the 1950s and ’60s, cafés were the stomping grounds of beatniks, hippies, anti-war activists.

“The very emergence of a public was based on people having a place to go to be a public,” said Augustine Sedgewick, a historian and author of Coffeeland. “It was a more free-floating social entity called the public that took shape only after there was a place for it to do so. And the first institutions that nurtured this public were coffeehouses.”

Even now in the 21st century, when we can just as easily talk to someone over Zoom or through Twitter, cafés showed no signs of going away. Across America, there are an estimated 35,000 coffee shops. Gross, the owner of Ox, can’t help but brag about what his café has afforded the neighborhood: “Every two months we have — well we had — rotating art from local artists,” he said. Ox also hosted live music and political meetups. “We had a get-out-the-vote event in 2018,” Gross said. “The mayor was there!”

Communities across the country must wrestle with the question, what do cafés offer us in addition to food and drink?

Ten miles away, in the college town of Haverford, Pennsylvania, Zach Morris had a similar vision in mind when he opened Green Engine Coffee Co. in 2015. “The romantic idea of building a place for a community, that is 100% why I did it,” Morris said. “The thing that gave me goosebumps was how many people told me, ‘I’ve been coming in here for a couple of years, and I wrote my dissertation here,’ or, ‘I got my Master’s degree studying here.’”

Nearly 3,000 miles across the country, Pipo Bui, co-owner of Seattle Coffee Works, fawned over her café’s intimate and friendly setting. “There could be six people sitting, engaging in a conversation,” she told me. “You might actually spend some intensive time with strangers, and get to know them a little bit.”

This tender image has since become a nightmare scene of potential infection, one the coffee shops have had to avoid. Seattle Coffee Works is still relying nearly exclusively on direct-to-consumer coffee bean sales, while Green Engine, like Ox, also sells food and coffee to go. As bad as it has been, it is also a best-case scenario under the circumstances. All three are part of what Peter Giuliano, the chief research officer for the Specialty Coffee Association, said has been an encouraging trend: “Seventy-five percent of businesses have stayed open during this time,” he said. “A lot of companies surprised themselves by how much business they were able to get back.”

Of course, that’s not to say these places are thriving, merely that they’re surviving. In Bui’s case, Seattle Coffee Works now relies on roasting and shipping beans for the vast majority of its profits (only one of their four locations is open to customers). “We went from 30 mailers a week last year, to 360 last week,” she said. Yet even so, those sales are the equivalent to what one of their four cafés used to bring in. By her estimation, revenues are down 75%. Still, given that King County has seen by far the most Covid cases in Washington state, it’ll likely be a while yet until a customer can walk into a downtown Seattle Coffee Works location.

“Our employees are not ready to come back to the cafés,” Bui said. “I don’t want to ask anybody to risk their life for a latte.”

Though a cool, mustachioed barista may hate to admit it, the truth is our country owes much of its coffee culture to Howard Schultz. It was, after all, his Starbucks that really catalyzed the café boom of the ’90s. Starbucks had 165 locations when it IPOed in 1992. Ten years later it had 5,886. Starbucks’ success — and the backlash it prompted — helped foster the indie boom in coffee shops. As The Atlantic’s Robinson Meyer wrote, the coffee chain “got people used to paying $4 for coffee, and then as people wanted a less corporate experience, the hipster cafés filled in.” Cultural anthropologists like to call this artisanal boom the third wave (Starbucks’ ascent being the second, and mass-produced household brands like Folgers being the first). Third-wave growth has been impressive over the last decade, with a compound annual growth rate of 5.5%. It doesn’t take a spreadsheet to figure that out: Just look at the number of succulent-adorned coffeehouses that popped up in cities and towns around the country.

That is not to suggest small-time cafés owners owe Schultz a thank-you. Starbucks has harmed the “hipster cafés” as much as it has helped them. According to a 2019 report from Allegra World Coffee Portal, an industry research group, Starbucks, Dunkin’, and the conglomerate JAB Holding Company, which owns such brands as Peet’s and Panera, collectively own nearly 80% of the U.S. coffee-shop market. (The report wasn’t all bad news for indie cafés: It found that “nearly a quarter of consumers surveyed cite coffee quality as the biggest impetus for behind [sic] repeat coffee shop visit.”) What’s more, a global survey of the specialty coffee industry (that is, high-end mocha) by the Specialty Coffee Association found that while 80% of businesses made less than $2 million in revenue per year, Starbucks earned more than $26 billion in 2019 alone.

Given that Starbucks has been investing heavily in drive-thru and mobile-only ordering, its dominance of the industry — particularly at a moment when smaller shops are so vulnerable — puts the future of the third place into an even more precarious position. Starbucks, the same company that famously embraced the concept of the third place when building its brand in the ’90s, is now saying the concept exists “everywhere [a customer is] holding our cup,” as Rosalind Brewer, Starbucks’ Americas group president and chief operating officer, said in a statement last year. Should Covid succeed in killing off a majority of the indie cafés, cities across the U.S. could be left with a coffee culture dictated by a group of C-suite marketing execs. And what happens, then, if Starbucks decides all that floor and counter space isn’t worth it to the company’s bottom line?

Any hit to independent cafés that operate as third places won’t just be felt by their employees and community members; the pandemic also has ruptured supply chains in ways that have downstream impacts on farmers, importers, and producers. Farmers are already dealing with an industry-wide pricing crisis, as bean prices have been trading at below the cost of production for coffee farmers since 2018, and potential payment delays from further up the chain could prove fatal. While the pricing crisis was already a hot topic within the industry, any efforts to fix it — namely, by paying farmers more — will likely be stalled due to Covid.

“Fixing a global market in the context of trying to respect and understand how markets work is challenging,” said Peter Roberts, a professor of organization and management at Emory University. “Momentum will be stalled completely. Anyone that was doing the intervention work now has to sort of think about how they’re allocating their funds. So, you’re going to get a six-month to two-year hiatus in having this conversation.”

In a worst-case scenario, this means a future where farmers are disincentivized to grow coffee and we’re back to sipping Folgers every day. Bui, the Seattle Coffee Works owner, has already seen this scenario play out. “We were in Vietnam this winter, and people are moving away from growing coffee there because it is not profitable,” she said. “They’d rather grow flowers. You can make more money and do less work.”

Should Covid succeed in killing off a majority of the indie cafés, cities across the U.S. could be left with a coffee culture dictated by a group of C-suite marketing execs.

But perhaps the future for coffee isn’t so dire. Perhaps independent cafés will embrace, as Bui already has, the idea of direct trade — the purchase of beans straight from the farmer, rather than middlemen. It is an arrangement that, according to Bui, means more money for both parties. “We’re committed to working with the people that we’re used to working with,” she said. “And they are very understanding, and willing to tighten their belts as much as they can. So if this is just one year we’ll probably get through it.”

Perhaps we’ll get a vaccine and café owners can reinvigorate the husks of their business. And perhaps companies looking to save money on office space will use the last few months of successful remote work as the excuse to abandon pricey offices entirely, allowing a fleet of now-immunized workers to set up their makeshift offices in one of their city or town’s coffeehouses. Sedgewick, the historian, sees this as a real possibility: “It may be true that coffeehouses are more important for the future of work than skyscrapers,” he said.

In the meantime, Bui has an interesting idea for all the unused floor space in her café locations. “We’ve got these big beautiful spaces scattered around town that are standing empty. Maybe we can use them for art installations and liv-cast those. People are having mental health issues, and probably need to get some things off their chest. Maybe there is a way that we can be an outlet for that.”

Ox’s social media feeds have been full of information on how to vote by mail in Pennsylvania, along with instructions on how to improve the brew process from home. Even now, in the face of uncertainty, they’re trying to be a bridge between public and private space for their communities.