Coffee firm ground down from battling insurance claims

Switch Espresso managing director Hamish Evans. Photo / Mark Mitchell

After February's devastating earthquake Pete Davies told the Business Herald he expected the disaster to have a big effect on his Christchurch coffee roasting and cafe firm.

Almost two months later his prediction is turning out to be accurate.

The co-owner of Sydenham-based Underground Coffee says the company's sales are still down about 25 per cent on pre-quake levels.

Around a third of the Christchurch cafes his business supplied with roasted coffee remain closed because of cordons and damage.

Many, including one owned and operated by Underground near the city's town hall, had been permanently shut.

Another Underground cafe in Colombo St began trading just last week, while the firm's site in Victoria St remained "yellow-stickered" and closed.

The company's Sydenham roastery, in Cass St, which also houses a small cafe, escaped major damage and is operational.

Davies said the processes around insurance claims were taking up a lot of his time.

"You think you're covered, but when you get down to the fine print you find there's wee triggers there that deem that not to be the case," he said. "The quake was bad enough but then trying to validate your existence [to insurance companies] ... can get pretty tedious."

Davies said some staff were still suffering psychological trauma caused by the disaster, with two employees too frightened to return to a mezzanine floor used as office space.

"We've had to reconfigure how we function to cater for that," he said.

Meanwhile, Hamish Evans, who owns the Switch Espresso cafe and roastery in coastal New Brighton, which escaped large-scale quake damage, said business had been booming since water and electricity returned to the area about two weeks after the disaster.

Sales were up about 80 per cent on pre-quake levels because of an increased population in New Brighton and a reduced number of coffee outlets across the city.

But another cafe that Evans opened in the central city just two weeks before the February quake, Black Betty, resumed trading only last week.

He said it had placed immense pressure on the business to have the site closed for so long, although the Government's Earthquake Support Subsidy, which covered the cost of paying staff while the cafe was shut, had lessened the impact.

New Zealand Coffee Roasters Association president Tony Kerridge said more than 120 Christchurch cafes and bars had been closed by the quake.

Generally, those that had resumed operations were benefiting - through increased sales - from the reduced number of hospitality businesses in the city, he said.