Ukrainian roasters share the impact of war and their ongoing recovery
Not only was the purchasing power in Ukraine falling because people were scared to spend money, but sales were also decreasing while costs were increasing.
“It ended up being a blessing in disguise. When that container arrived in Turkey, we actually managed to find a potential supermarket chain partner that we started negotiations with to expand there. We’re still in the process of looking at either selling our products in their stores or partnering with them to open our cafés in Turkey,” says Balzhyk.
“Currently we are also actively working on our expansion into the United Kingdom, with an e-commerce format launching later in 2022, and a chain of cafés opening in 2023.”
While forward projections for the growth of itis.cafe are encouraging, Balzhyk has had to face the devastation of two of its coffee shops, which were bombed by Russian missiles.
“The most frustrating part was that those two cafés were the most recent ones we’d opened. They housed the newest, best equipment and trained staff, everything was prepared specifically for the new opening of the cafés. We invested a great deal of time and money into the new stores,” Balzhyk says.
“Luckily, our staff weren’t there at the time of the explosion. Those two cafés were in shopping centres in Kyiv and Odessa. There was damage done to both cafés, but we are happy that our staff are safe and unharmed. One of those shopping centres has already reopened, and we have completely renovated the café. The second one will be opening next year in stages, and we are currently working on renovating it. ”
Another Ukrainian company affected by the conflict is Fresh Black coffee roastery. The company hosts the largest coffee centre in Eastern Europe, supplying coffee all over Ukraine, to cafés, restaurants and offices.
Founder Viktor Shramenko says before the war began, the company was roasting around 50 tonnes of coffee per month.
“Once the war started in February, business stopped. After three weeks, we decided to move our production from the border of Kyiv and evacuated our production to the western part of Ukraine in Lviv. It was very difficult to organise logistics to our new location. It took us three weeks to move our production and it was a costly process,” says Shramenko.
“Another two weeks later, we tried to organise relocating our team to Lviv and rented some flats for our employees. A month and a half later, halfway through April, we conducted our first roast at our new facility. By 1 May, we started to reach our normal roasting capacity of one to two tonnes per day.”
With 80 employees to provide for, Shramenko was determined to save every member of his team and pay their salary throughout the conflict, even if it meant sacrifices to the company’s revenue.
“We decided to use 100 per cent of our profits to pay our staff’s salaries. Equipment can be replaced, you can buy it again and again, but the reason our business succeeds is because of our team, they are most important,” he says.
Before the war, Shramenko says the Ukraine coffee market was beginning to be recognised for its specialty coffee, describing the country as a high-quality coffee destination.
“To me, the most exciting coffee city in the world is London. I think Ukraine is very similar to London’s coffee scene because you’ll find a coffee shop every 50 metres in the city centre. You’ll also find each coffee shop has excellent equipment, such as Slayer, Faema or La Marzocco coffee machines,” he says.
“We need global businesses to collaborate with Ukraine so we can continue to grow our reputation as a specialty coffee community. That would be very helpful for us because we’re in such a terrible situation and don’t have enough opportunities in our country.”
Every cloud has a silver lining, and Shramenko jokes that in a small way, even the COVID-19 somehow prepared his business for war, giving his team the experience of how to conduct business during a crisis.
“We heavily dropped the price of specialty coffees that scored 86 to 89 or over. We were making zero profit but were trying to start selling coffee again to decrease stock. Before the war we were selling coffees such as a Colombia Finca Puerto Alegre Geisha for €88 (about US$86) per kilogram, now we sell the coffee for €60 (about US$58) per kilogram,” he says.
In the first several months of the war, Shramenko even gave some of his stock, such as microlots, fermentations, and Geisha varieties, to Ukraine soldiers so “they could enjoy the taste of specialty coffee again.
“We calculated that we provided around €22,000 (about US$22,566) of our coffee to the soldiers, and every month that sum is increasing. We need our army to stay strong in this war,” says Shramenko.
The Ukraine situation is one of loss and tragedy, but through the conflict are stories of hope and resilience. Gemini Espresso CEO Anton Mianovskyi says it’s been a surreal experience no business – or person – should ever have to endure.
“It’s so strange how in the 21st century we still have a crazy situation like this happening in the world. For the Ukraine coffee community, it’s very important to live and work in a safe country,” Mianovskyi says.
“Together with the global coffee community we can solve this situation faster and return to a normal life. This conflict is affecting the entire world, exacerbating the universal cost of living, even affecting global petrol prices. It just shows you that one mistake can destroy everything and create massive consequences. Together, let’s drink some coffee and bring peace.”
This article was first published in the September/October 2022 edition of Global Coffee Report. Read more HERE.
Source: GCR Mag