How we adapted, survived, and thrived during COVID-19?
originally published on Linkedin on June 27, 2021
This was the most prevalent question for restaurant operators for the last 17 months. I would love to share with you how Duino was able to answer this question.
Duino Coffee is an independent specialty coffee shop in McKinney, TX; established in February 2019 with a mission to create a hub for the community to meet, engage, and celebrate over craft coffee, specialty teas, indulgent eats and local arts. We currently have one location plus a mobile catering trailer. Our goal within the next 5 years is to expand to 4 locations across DFW.
At Duino Coffee’s we appreciate that challenges also present opportunities, so we formulated a thoughtful strategy to navigate the uncertainties of the pandemic and help the business achieve profitability in especially difficult conditions. Our strategy earned us top honors for being the most resilient, creative and innovative small business in dealing with this crisis. The award was sponsored by the McKinney Chamber of Commerce, Visit McKinney, McKinney Community Development and McKinney Main Street.
We had just celebrated our first anniversary two weeks before orders to shelter-in-place were mandated in Texas. On paper, we were doomed. We had 2 weeks of working capital and a vulnerable young business that had just started to produce positive cashflow. Simply put, Duino did not have the financial resources, network of partners, brand recognition, business know-how and the resiliency of more established businesses. We had to take big risks and aggressively fight for our survival.
Our COVID-19 strategy was driven by 3 main guiding principles:
1) Relevancy: Closing, even if temporarily, was never an option (to the extent it was legally permissible to remain open). Closing would have been a much easier and more cost-effective way to deal with the uncertainty. But closing would deem our business irrelevant to prevailing events; it would take away our voice in the community; and it could make re-opening more difficult or impossible. In situations like these our actions, products and brand voice need to be part of the story of our customers and relevant to their challenges and changing needs.
2) Business Flexibility: We need to be open to new ways of conducting our business, even if it meant that we had to deviate from our original business plan. Our strategy should never be reactionary or short-term minded. We recognize that despite terrible business conditions, we need to identify golden opportunities to build our brand and position our business for growth.
3) Crew and Customer Safety: All our stakeholders, including crew members, customers and even vendors had heightened health safety concerns. Duino had to create a safe and accommodating environment. We had to build credibility, rapport, trust and higher degree of empathy to address the spectrum of safety perceptions and expectations.
Our Strategy
Summary of our COVID-19 strategy
1- Brand Voice
We started with a communication strategy that had a consistent theme, mantra and voice. “Rise Up” became a crying call for our business and our community to rise-up to the challenge. Our communication strategy was reinforced by positive, uplifting and personal messages. We wanted to be an oasis of optimism and positivity to counter the endless flow of negative news.
2- Community Engagement
We activated a higher level of community engagement through several innovative fundraising campaigns that brought the best out of our community. One notable campaign was “The White Cup Challenge”, where we invited customers to paint our paper coffee cups with words of encouragement and optimism. The cups sold for $2 and all proceeds benefited a local food pantry.
Our crew members were also busy every day preparing food and drinks for worthy causes in our community. We joined forces with local influencers and organizations to feed local doctors and nurses. It was a way to give our support to those who were fighting in the frontline trenches.
Food and Coffee sent to Medical City in MckInney
When calls for social justice were sweeping across the country, we actively became part of the narrative. We hosted a candlelight vigil and a (safe) live outdoor concert. Proceeds from the event benefited the National Urban League, an organization that sponsors social programs in underserved communities.
3- Crew Members
Throughout this ordeal, I am proud that we did not lay-off a single crew member. In fact, we ended up adding five new jobs since COVID-19 started. We were also able to maintain bi-weekly payroll that was somewhat close to pre-COVID levels. The community reciprocated our efforts with generous donations to benefit our crew. As a result, our business was rewarded with a level of crew and customer loyalty that is hard to find in the restaurant industry.
4- Safety Measures
Our policy took a step further beyond the prevalent policies by most restaurants at the time. We implemented: hygienic check-ins for crew members every 30 minutes, elevated food safety procedures, introduced flexible sick policy, and enforced the sanitization of tables and chairs after every use. We also developed a proactive action plan in case one of our crew or customers tested positive.
These measures came at a great cost to our business, but the payoff was immeasurable in the form of credibility and respect by our crew and customers.
5- Product Offering
Customer behavior changed drastically; they were looking for one-stop shopping experiences whether online or in person. Restaurants which offered a full and diverse menu were relative winners. Independent coffee shops that offered only drinks and limited food offering were fighting an uphill battle. As a result, Duino expanded its pre-pandemic food offering, to a full “café” menu with an extensive list of breakfast, panini, quesadillas, and desserts. It was a transformation that required an overhaul of our kitchen setup, crew training and business processes.
The pandemic also impacted how we celebrated holidays, so we responded with “Breakfast-in-Bed” bundle for Mother’s and Father’s Day, which was a huge hit. Over 75 bundles were pre-ordered within hours of the announcement. We were pleasantly overwhelmed by a parking lot full of customers waiting to pick-up orders. Music was blasting from parked cars, and an impromptu parking lot party started. The festive environment was a pleasant opportunity for the community to decompress and reconnect. Duino was at the center of it all!
We focused on introducing items that had higher price points and greater value to generate quick cash-flow. “Daily Delivery Subscription” was one of our most successful cash-flow generating initiatives. It allowed customers to pre-pay for two weeks or more of hand-crafted drinks and get them delivered to their doorstep by 9am daily. It was a win-win-win: customers got their daily dose of drinks from Duino; our crew had meaningful and motivating high-volume work; and the business got much needed cash-flow in the form of a 2-week prepayment for purchases (a 2-week interest free loan!).
6- Systems and Technology
Businesses which did not have a drive-thru were in a major disadvantage, and those which did not have online ordering capabilities were dealing with a mission impossible. We do not have a drive-thru but were lucky to have been in the final stages of piloting an order-ahead and delivery app just a few weeks prior to the pandemic. We accelerated the deployment of the system and within days, Duino had a fully functional online tool for pickup, curbside and in-house delivery that rivaled big national chains.
So where does Duino go from here? We were able to return to profitability by August of last year. 2020 sales ended +32% better than 2019. So far 2021 looks even better (almost +60% YTD sales growth). But the crisis is far from over. Our strategy needs to evolve to address continually changing conditions and trends.
COVID-19 was an unwelcomed surprise; but we did not duck or hide, we rose-up to the challenge to ensure that our brand survived the unknown. Our story is not over yet, but so far COVID-19 has made Duino a better business that is more connected to our community, more focused and more resilient. I guess I could say we needed a bit of a nudge to show what we are made of.
