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How Digital Commerce Revolutionized Coffee’s Supply Chain

Discover how eCommerce drives revenue for B2C and B2B business in the coffee industry around the world by providing better shopping experiences and integration opportunities for buyers.

coffee_small.jpgAfter a period of unprecedented eCommerce growth, companies are transforming operations digitally at a pace never seen before. The Coffee industry alone makes up a whopping 1.6% of the United States’ GDP, and is just one industry undergoing massive digital transformations on all levels of the supply chain.

In 2018, eCommerce grocery sales reached $4.75 billion in the US, and have steadily climbed upwards since, with Coffee representing the leading category.  As other agricultural products like nuts, seeds, and oats follow suit and gain traction online, the online selling of food and beverages will continue to reach new heights and more companies will enter the fray.

How are companies in agriculture, food and beverage investing in their digital capabilities to capitalize on the increased market for these products online? Here are a couple of examples from Coffee suppliers around the world.

Suppliers Streamline Sales at the Source

Agricultural suppliers, one of the earliest portions of the Coffee supply chain, are facing increasingly tough supply demands and are being asked to stretch themselves as thinly as possible to service customers all over the globe. The global digital agriculture market is estimated to grow from $5.6 billion in 2020 to $6.2 billion in 2021. Without the proper digital infrastructure this early in the supply chain, agriculture distributors are finding it harder and harder to meet these increased demands and provide the value necessary for their vendors to succeed.

Olam International is one of the biggest global distributors of Coffee Beans and other agricultural products like seeds, nuts, and more in the world. As a company supplying more than 23,000 small businesses worldwide with food and raw materials, Olam saw quickly it needed to modernize it’s internal and external online eCommerce portals to meet the new digital demands of these businesses.

This digital transformation included integrating Olam’s custom ERP (Enterprise Resource Planning) and sole source of truth for all of Olam’s inventory data into 3 new separate Magento instances. The three new sites; OlamSpecialtyCoffee.com, OlamNuts.com and OlamSpices.com, previously having been on one single instance, were now much easier to maintain and differentiate between different teams. They also allow the three divisions to better serve the massive network of businesses they need to distribute to, with included custom extensions for advanced search, social media, and more.

Post-transformation, Olam International is much better positioned to meet the global digital demands of their vendors. It is clear to see that this type of digitization and optimization is a growing trend in agriculture supply chains, and we will continue to see more multinational companies investing in streamlining these processes. In an episode of the Mckinsey Podcast, Susan Lund, partner at the McKinsey Gloval Institute said, “companies now will expect to see a disruption to their production lines...every three-and-a-half to four years.” Investing in optimization and digital transformation before the next big disruption event is crucial to staying afloat during those times.

Disrupting Local Coffee Distribution

Due to office closings and a surge of working from home putting morning commutes to a halt, local coffee demand saw another huge wave of disruption last year. As many corner coffee spots and bodegas saw less and less foot traffic near offices, many companies started to overhaul their Direct-To-Consumer operations to get back in the hands of these customers.

Home coffee buyers are spending much more money for organic and exotic coffee beans delivered straight to their homes. According to BlueCart, coffee drinkers will pay up to 110% more for coffee they enjoy to be delivered directly to their home, and many companies are seeing the increased value of direct-to-consumer coffee distribution.

CoffeeAM is a B2B supplier of coffee beans to local small coffee shops, cafes, and coffee connoisseurs across the country. They realized early on the necessities of digital optimization, and that selling their exotic and organic coffee beans directly to consumers at home would need a digital infrastructure powerful enough for global distribution. This journey begins with upgrading their eCommerce platform.

After migrating off Magento 1 and onto Shopify Plus, CoffeeAM was able to further invest in customer experiences and optimization through the platform's extensive integration ecosystem. After their upgrade, CoffeeAM invested in automatic reordering and a Coffee of the Month subscription model, an automated fraud detection service, advanced shipping options and services, and more. These premium eCommerce features are much harder to provide on older platforms, and the results CoffeeAM saw post-launch speak for themselves:

In the 10 months post launch of their new site, CoffeeAM saw 36% more revenue, a 17% better conversion rate, and 45% more transactions than the same period over the previous year. Their improved customer experience and new features placed them in the right spot to capitalize on the direct-to-consumer coffee market post-COVID.

Digitizing Commerce for Coffee Machines

Now, once the coffee beans have been transported from their original exotic location to the local stores, or once your monthly supply of coffee has arrived from your favorite DTC brands, how are you going to make it? How are coffee machine companies seeing disruption and rapid change in their industry as well?

Similarly, to coffee beans themselves, a massive increase in working from home lead to many high-end coffee machines being bought for homes in need of their daily coffee fix. Jura Coffee, a global manufacturer and distributor of these high-end coffee machines has seen massive increases to transaction volume (57% increase YOY) and revenue (54% increase YOY) before and during the pandemic due to their consistent willingness to innovate and with new site features and customer experience advancements. To continue to scale during this period of growth, Jura Coffee had to upgrade their eCommerce operations as well, moving from Magento 1 to Magento 2 after the former platform’s end of life and work on a site redesign.

One of the biggest areas of Jura’s recent investment is in their mobile responsiveness and functionalities. In their migration to Magento 2, Jura focused heavily on providing a much better mobile experience to their customers, and they succeeded. Thanks to a new mobile responsive design and providing ways to use Jura’s various customers experiences on mobile, like Jura LIVE, the coffee machine manufacturer is also seeing a 55% boost in mobile traffic and a 44% better conversion rate on mobile. The better functioning mobile site is allowing customers to better experience Jura’s machines, with live product demos and even 3D product models available to users shopping on mobile devices, increasing their engagement and willingness to buy on mobile.

With Insider Intelligence forecasting a mobile commerce market cap of $284 billion this year, there’s no more important time to invest in your mobile commerce operations.

Continuous Exponential Growth

Digital Transformation at every level of the supply chain is giving companies exponential growth in revenue. With upgrades and investment into your digital infrastructure and eCommerce comes upgrades to your customer experience, and with that comes boosts in transactions, revenue, conversion rate and average order of value.

What else can companies invest in to drive exponential growth in their eCommerce operations? For B2B’s, premium B2B site features are crucial to improving customer experience, from advanced site search and shipping options to contracted product offerings and pricing for specific customers. Many B2B customers using eProcurement systems may also request, or require, integration with a seller’s eCommerce platform, further enhancing the customer experience and accelerating the purchasing process. Getting the most out of your customer data and serving your highest converting customer groups will explode your eCommerce operations tenfold.

For B2B’s and B2C’s alike, Augmented Reality is taking center stage as the customer experience to beat in 2021. In order to differentiate your site from the competition, providing unique and confidence boosting experiences should be the number 1 priority for eCommerce managers and CXO’s alike. As well, implementing AR solutions in factories and warehouses has shown major increases to safety, maintenance speed, and production efficiency.

Learn more about the biggest disrupting factors in B2B and B2C business today on Redstage’s blog. If you’re interested in connecting with PunchOut2Go to learn more about eProcurement integrations, fill out the form below and an integrations expert will be in touch shortly.

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