Water is essential for all of us, and coffee for some of us, but for Tundra Transfer both are its saviours as it recovers from a pandemic downturn.
The purified water and coffee supplies company was hit hard by Covid, which dragged down its revenues to less than half of last year’s.
As a one-stop shop for coffee needs, Tundra Transfer provides offices, mines, airlines, trucking companies, restaurants and hotels in the NWT with beans, Keurig pods and coffee makers, as well as maintenance services for coffee machines.
But as government offices and other businesses closed in March, sales of Tundra’s coffee and coffee services dropped by 80 per cent, said president and owner-operator Annette Althouse.
“Government offices are a huge customer of ours. Once they all went home, I had to lay off seven out of 13 people,” she said.
Before Covid, Althouse employed two full-time drivers who delivered coffee supplies, and two who delivered water. She had to lay off one of each.
“In March alone (revenues) were already down by 30 per cent even though we were only shut down for a week. April was down 39 per cent. May was down 56 per cent.”
After thirst for water bottles to offices and homes began to dry up, Tundra’s plant scaled back the bottling activity from five days a week to three days.
As some businesses began to open last month, Tundra managed to percolate up from its low point in May and revenue rose in June, to 30.5 per cent below the numbers from June 2019.
With the help of the federal wage subsidy program, the company rehired four of the seven staff it laid off and is now back to 10 of its original staff of 13.
“I think people were sort of in shell shock and thought we were closed when we weren’t,” Althouse said. “Once the reality set in and they overcame the shell shock and they saw our doors were open, then things started to return little by little. We’re an essential service. We’ve got a lot more traffic in the office now.”
Aside from lowering Tundra’s revenues, the business slump had other side effects, some unexpected and even positive. For one thing, there’s a “tremendous overstock” of Keurig coffee pods in its warehouse that it has been clearing out since April through a sale on the products.
Restaurants, mines and hotels have shifted their purchasing preferences from coffee to compostable take-out containers and cutlery for hot meals, said Annette’s husband and business partner Dennis.
Hotels have been buying the items to prepare meals for people quarantining there, he said.
Though those purchases from March 1 to June 30 represented an increase of only one per cent compared to the same period last year, the growth was limited to mines, restaurants and hotels, compared to before Covid when a wider range of businesses were among the customers,
Demand for Styrofoam containers “dropped off to almost next to nothing,” Dennis said, and disposable cup sales have fallen by 36 per cent.
The company’s courier service, which it developed almost two years ago when Greyhound shut down its network in Western Canada, has grown since the pandemic arrived in the NWT.
Its truck leaves Yellowknife every Thursday at 5 a.m. and goes to Behchoko, Fort Providence, Hay River and other locations.
“The truck delivers essential things to the health centres, and the (driver) brings back blood samples from the health centres to Yellowknife,” Dennis said. “We supply the Big River Service Centre (in Fort Providence) with popcorn and coffee and materials for the cappuccino machine, and we supply the slush machine. We have about 20 slush machines that we supply with the syrups and the cups and lids and straws.
“All of that has been ongoing and it became even more essential during Covid because it could be that people are becoming more aware of the service and it has picked up in volume. Advanced Medical Solutions is a medical supplies company and we are the courier for them for the communities.”
Other seasonal items have helped buoy revenues, such as the shop’s ice bags, made from its highly purified water that leaves no bubbles or suspended solids once frozen, and it remains frozen for longer than conventional ice.
Annette said that up to this point in July, business is down 31.6 per cent compared to last July, but she doesn’t expect it revenue to be down significantly from June.
Coffee, half of Tundra’s business mainstay, has shown a small increase in sales over the past few weeks as some government offices resume operations, Dennis said.
Tundra will be able to rehire one of its drivers on Aug. 17 in anticipation of more government offices opening, and demand for coffee and water rising.
Looking back over the last four months, Annette said the fallout from the pandemic wasn’t as bad as she was fearing, and she credits her staff with being adaptable.
She’s also thankful for how the Yellowknife community responded to the situation.
“I’m feeling this community has really supported us,” she said. “I’m feeling optimistic that things will continue to grow.”
She said the response from customers has been a huge source of gratitude.
“We waived all the coffee contract fees. With the volume of consumption having dropped, the additional fees haven’t been charged. If ordinarily an airline company, for example, buys a case of coffee every week and then during this period they only buy one case of coffee, we charge them the consumption price and not the normal contract price.
“I’ve had so many people come to me and say, like Jeff from Jiffy Lube, ‘When this is over we’re going to wash all of your vans for free!’ because we waived all of his fees and I said, ‘Do you know how many vans we have?’” Annette said, laughing.