Sparkling water, in both plain and flavored varieties, has virtually taken over the beverage world in recent years. According to the NPR report Seltzer’s Popularity Bubbles Up in the U.S. from August 10, 2017, sparkling water sales are up 42% over the past five years—and this trend shows no signs of slowing down.
Whether at home or away from home, consumers are seeking out healthier beverages. But many still enjoy the fizziness and flavors that carbonated sodas traditionally provide. For those consumers, sparkling water strikes a happy medium. Sparkling water, such as PepsiCo’s new bubly line, is especially popular with younger consumers—earlier this year, the Los Angeles Times reported that it’s the hottest beverage among millennials.
With sales trends on the upswing and younger diners preferring it, sparkling water is here to stay. Here’s how operators can leverage this trend on menus.
Benefits of sparkling water for operators
The sparkling-water category is expected to double in size to about $3.5 billion over the next five years1. Serving the consumer desire for more fun, sparkling water products is beneficial for restaurants for several reasons, according to Samantha Siegal, Director, Water and Commercial Marketing for PepsiCo Foodservice: consumers want these products, offering them helps restaurants stay ahead of the competitive landscape and offering them monetizes a behavior that would otherwise keep consumers from purchasing beverages.
Additionally, many consumers are moving away from carbonated soft drinks and are seeking out sparkling water as an alternative; in fact, 65% of sparkling water consumers are switching from carbonated soft drinks2. Part of this could be due to cutting back on sugar, artificial flavors and calories, as 61% of consumers say they are more likely to purchase beverages with an “all-natural” descriptor, with no artificial flavors or sweeteners, according to Technomic’s 2018 Beverage report.
Sparkling water allows restaurants to provide beverage options that deliver the experience, satisfaction and fun of bubbles without the calories or artificial ingredients. What’s more, the carbonation in sparkling water drinks helps cut through heavier foods and can enhance the flavor of menu items. Thus, having a sparkling water offering is key for ensuring customer satisfaction.
Trends in sparkling water
Beyond serving sparkling water straight up, these bubbles have made huge moves in mixology, in both cocktails and mocktails. Increasingly, these beverages feature sparkling water instead of other mixers. Utilizing ready-to-drink sparkling water options can help deliver on consumer desires; it’s also easier for bar staff, since making carbonated water in-house can be time consuming and inconsistent.
To this end, Siegal notes that operators should offer a full portfolio of sparkling water flavors. This enables them to feature new, exciting and unusual flavor offerings on their menus. According to Siegal, it also enables them to choose flavors that pair well with foods, such as mango. Beyond new flavors, operators should also make sure that they stock both the basic and most popular flavors, since diners appreciate a mix. In fact, 75% of sparkling water consumers believe that variety is important.3
Expanding to off-premise
Sparkling water is also trending in off-premise, from take-out to delivery and online ordering. Overall off-premise business has grown to between $25 and $35 billion dollars—and it’s expected to grow another 15% over the next five years, according to Technomic’s Next-Level Off-Premise 2018 Study. With more beverage variety, including sparkling water options such as Pepsi’s bubly sparkling water, restaurants can increase the chances that their customers purchase drinks along with their meals.
“We know that when consumers operate through this take-out/delivery/online space, their purchase of beverages absolutely plummets,” Siegal says. “That’s driven by two facts…either they have something else ready at home or they can get something else cheaper.” To appeal to these consumers, the same trends apply—they want interesting and delicious beverage options. “Providing packaged solutions in the sparkling-water space that give consumers what they don’t necessarily have where they’re going is hugely important, as this becomes an increasingly common part of even higher-end restaurant economics,” Siegal says.
Sparkling water has made big waves in the beverage and restaurant industries, and it’s only going to continue to grow. Operators should not only offer sparkling water in a variety of flavors to cater to changing consumer preferences, but they should also consider experimenting in mixology and adding options for off-premise purchasing.
1. IRI MULOC; 2022F, based on LRB Model Projections
2. IRI Scanner 2012-2015 3-Year CAGR; L52 through March 27, 2016 and IRI Panel Brand Switching Year End 2015
3. PepsiCo bubly NTS, May 2018
This post is sponsored by PepsiCo Foodservice