The perfect brew: How self-reliant cafés struggle to survive

Yang Wenjie
The coffee business seems to attract people who want to start their own businesses. But there are pitfalls.
Yang Wenjie
The perfect brew: How self-reliant cafés struggle to survive
Ti Gong

Coffee-tasting events are hosted at Yuan Yue's workshop, part of the training for young baristas. 

There seems to be no end for the public hankering for a good cup of coffee. Despite the glut of coffee shops in Shanghai, new ones keep popping up, often using creative ideas to beat the competition.

There are at least 800 cafés in Minhang District, according to the dining-service search app Dianping. More than 200 are independent operators and the rest are franchise chains like Starbucks, Costa and Luckin.

The coffee business seems to attract people who want to start their own businesses. But there are pitfalls.

“It’s hard for a café to survive for more than half a year,” said Yuan Yue, who trains baristas.

Jin Liyao, who learned the ropes from Yuan four years ago, now runs cafés in two Minhang industrial parks.

Considering the neighboring environment and the nature of his customers, Jin has done the interior décor in simple, warm tones. The business hours coincide with the hours of the park: 9am to 6pm on weekdays.

In 2014, when he opened his first café, Jin looked for creative ways to make his business stand out. He found online TF Coffee, a highly popular barista-training company established by Yuan.

Yuan had a lot of experience in coffee-making and was an authorized judge in the Specialty Coffee Association. Jin always found her ideas enlightening.

From time to time, Jin invites Yuan to join him in a “coffee tour” in Shanghai. They go from one shop to another, assessing how the cafes appeal to customers and keeping abreast of current trends.

During the hot summer season, osmanthus flavoring, sparkling water and coconut water turned out to be the most common ingredients added to iced coffees.

“We update our menu from time to time to offer new things to regular customers and to try to attract new customers,” Jin said.

Many young people, said Yuan, dream about opening a café.

“The job may sound tempting because it promises a lot of free time, with the chance to make some money,” she said. “But the industry, in fact, is full of uncertainties. A lot of people don’t really understand what coffee is all about when they decide to step into the business. You can guess the result. If a café can hang on for a full year — through both busy and lean seasons — then it has a chance to succeed.”

Jin said independent coffee shops have one big advantage. They can develop their own individual personalities, which cookie-cutter coffee chains can’t do.

But it’s important, he added, to know your environment and clientele.

“In the industrial parks, for example, it’s busy in the daytime but dead at night,” he said. “In a busy downtown area, a customer may stay for only about 20 minutes, while they may stay much longer in a more relaxed area. All these different scenarios need to be taken into consideration.”

Over the years, Yuan and Jin have initiated several dozen workshops to share their expertise with aspiring café owners. There are also hands-on sessions in coffee-tasting. Based on the success of their efforts, the duo is planning a series of new courses.

There is even a WeChat group of more than 60 members who communicate regularly about coffee culture and customer feedback.

Yu Pei runs an outlet of Popular Bookmall that serves coffee in the Gumei community. He said business advice from TF Coffee has boosted his revenue.

The bookstore opened at the end of 2018. It originally used the same coffee beans as those used in a partner’s homestay facility. But after six months, Yu realized that the tastes of the bookstore customers, mostly young mothers, were very different from those in the homestay.

After some bean-tasting at TF Coffee, Yu changed the beans at his café. It turned out to be a wise choice.

“Our customers prefer the coffee made with the new beans, and coffee sales have risen to 50 percent of our overall beverage revenue,” Yu said.

Yu holds regular coffee culture courses at the bookstore, which have proven popular with coffee lovers.

At Yuan’s suggestion, he also offers a “hidden menu” to regular customers, giving them “special treat” cups of coffee.

Yuan shows up at the bookstore from time to time to “tune” Yu’s coffee machine.

She also operates a coffee bean grinding and roasting facility in Minhang.

“The right coffee bean and roasting are at the heart of a good cup of coffee,” she said.

Even though the café market was put to test in the past few months due to the coronavirus outbreak, Yuan remains upbeat about the future.

“Many of our lifestyle habits may have been changed since the pandemic, but opportunities always exist for venues where people can socialize,” she said. “People are taste-oriented. Once we have tasted the good stuff, we never go back to inferior choices.”

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