The growing importance of beverages on the bottom line

One take away from what could easily be described as the “Starbuckian” decade is that the right beverage menu drives traffic. This quite literal revenue “stream” may never have flowed as powerfully as it does today, which is why QSRweb recently posted a few questions about beverage trends to three major players in the industry  — Coca-Cola, S&D and Krystal.
Put simply, customers love to drink, both when they dine and when they don’t. The key, however, is that not just any drink will do. Today’s diners demand variety galore in beverages that are both nutritious and delicious, while also providing some type of memorable “experience” or even a great story about its origins or properties.
As if all that wasn’t enough, today’s imbiber wants it weird, too. So, take that steamy cup of coffee, and put it in the deep freeze, or add something offbeat, tropical or ethnic. In fact —  and many may find this hard to believe —  leave out the alcohol in some of the offerings. But please, don’t skimp on style just because that teetotaler or designated driver wants to stay sober.
And that’s just the froth on the root beer. To learn more, read on for our three-way conversation with:

• Amy Vincent, director, local eating and drinking channel strategy and commercialization, Coca-Cola Company
• Alice Crowder, VP of marketing, Krystal Company
• Pam Everett, director of category management, S&D Coffee & Tea

Q: What are the big beverage trends in restaurants today?
Coke: Innovation is one of the most significant trends in the beverage industry right now. It is more important now than ever before, as it is the key to boosting incidence and sales. In fact, 66 percent of consumers say that a restaurant that offers interesting food and drink specials would tempt them to try the restaurant for the first time. Millennials in particular are driving the demand for innovation, as they seek out new, creative food and beverage options.
Emerging beverage categories include specialty iced tea, as the majority of the fastest growing beverages on menus right now is variations of tea. … Asian flavors, such as lychee and matcha … green tea smoothies and cold-pressed juice, which is up by 519 percent on menus.
Krystal: We’re seeing an increase in mid-morning and mid-afternoon snack occasions, and for these occasions, guests are looking for something easily consumable in their cars. But not just anything will do. Consumers, in general, are looking for high-flavor … solutions that will help get them to their next activity.
S&D: Major trends in the market include cold-brew coffee, flavored teas, as well as more complex flavor combinations in beverages, often with an ethnic influence. Suppliers are responding to industry trends with … cold brew coffee solutions … interesting flavored teas … and tea and coffee products that are versatile and can be used in applications such as cocktails, frozen drinks and specialty craft beverages.
Who’s the typical customer for these types of promotional drinks?
Krystal: It really does vary. For example, Millennials love the intense flavor of our Slushies, but we’ve found that almost everyone appreciates the nostalgia inherent in the Kool-Aid brand. So the drinks have been popular with all ages.
Our Caramel Mocha Frost has been a hit with guests looking for a mid-morning snack – especially those with a taste for something more indulgent. And our hand-spun milkshakes are a high-quality, decadent treat that span all dayparts and demographics.
S&D: Generally, we see consumers interested in trying new S&D: flavors and often seeking a connection to their food and drinks. There is a desire for an authentic and unique experience, often connected by a “story” behind the food or beverage. Hence the popularity of origin-specific coffees, farm-to-table menus and family-style dining in many trending eateries and restaurants.
Who’s the typical customer for these types of drinks and what are they looking for these days when they go out to eat?
Coke: Millennials play a major role in the foodservice industry. … They are the most willing to treat themselves. Millennials are an especially important audience when it comes to specialty beverages, as they drive a larger share of overall beverage consumption than older generations and are more variety-seeking, drinking 4.3 beverage types a week.
They value innovation and desire the same taste, ingredient integrity and variety they love in craft beers from carbonated soft drinks. For this demographic, food is more than just “something to eat” – it’s an experience. In fact, 76 percent of millennials agree that “satisfying hunger for new experiences is important.” Because specialty beverages are considered new, unique and innovative, millennials are drawn to them.
Additionally, millennials are looking for healthy, functional beverage options that coincide with their lifestyle. Fresh, local and natural call-outs resonate the most with them, with 43 percent of millennials saying they would be most likely to go to a restaurant that uses local foods and ingredients.

“The average American experiences 22 away-from-home situations every week in which he or she could purchase a beverage or food – that presents restaurants with more than 5 billion situations every week. Only half of those 5 billion situations include a beverage, with food or solo. The other half — when no beverage is consumed — is an untapped opportunity for foodservice operators.”