Quenching Americans’ thirst has become a hotbed of menu development. It’s no longer enough to offer plain iced tea, branded carbonated soft drinks and sparkling water. Customers expect flavor innovation, variety and often health benefits as they sip. The same holds true with alcoholic drinks, where freshness and seasonality are a priority. In any case, beverages are now leading the way to food sales rather than vice-versa, states Kathy Hayden, foodservice analyst with Mintel.
Donna Hood Crecca, senior director of the adult beverage resource group at Technomic, agrees. “The beverage side of the menu can drive incremental sales, plus be a key point of differentiation,” she claims.
In talking to Mintel, Technomic and operators, we singled out ten trends that can differentiate the beverage menu and build traffic and profits.
1. Tea explodes. Tea on casual dining menus has grown 20 percent during the past three years. Fruit-flavored teas alone have shown 12 percent growth and herbal infusions are getting the most menu mentions, reports Mintel. Bonefish Grill, for example, sells a signature Thai Iced Tea, infused with green tea, coconut, cream and fresh mint, for $3.
At the 2013 Fancy Food Show, hot and iced teas were in the spotlight. Several tea lattes incorporated matcha, a Japanese green tea. “Some of the specialty drinks based on coffee are now moving over to tea,” says Hayden, citing lattes, cappuccinos and dessert drinks.
2. Snacking on beverages. Smoothies have grown 13 percent and milkshakes rose 9 percent over the past three years, reports Mintel. Chains like Jamba Juice have led the way, but even McDonald’s has its successful Blueberry Pomegranate Smoothie. Sonic’s “Summer of Shakes”—a promotion of 25 flavors—has made the QSR a destination for ice cream-based thick shakes. “Beverages have become the new snacks,” points out Hayden. “Portability and convenience are a big part of the reason.”
3. Health and wellness. Probiotics, immunity boosters, Omega 3s and other enhancements are popular additions to smoothies, juices and teas, like Red Mango’s Pro-biotic Iced Tea. “Beverages are leading the way in functionality messages,” says Hayden.
4. Seasonal sourcing. Limited time beverage promotions—both alcoholic and non—are booming, many of which use locally sourced, seasonal ingredients borrowed from the kitchen. At The Cocktail Club in Charleston, South Carolina, beverage director Jackson Holland creates farm-to-shaker cocktails and mocktails. The latter includes a Basil Orange Fizz and Berry Lemonade; the Russian Matinee (blackberries, citrus vodka, bitters and lemon) provides buzz.
Holland started a cocktail class this summer; he takes students to the Charleston farmer’s market where they choose produce and convert it into cocktails. “We have over 200 liquors on the shelf, but I try to steer people to flavors that will work well together. You don’t want to combine a bitter herb with a bitter spirit,” he explains.
5. Made in the U.S.A. Speaking of spirits, Holland notes that bourbon and rye are “hot”—an observation backed up by Technomic. American whiskey is a strong growth category. Ditto domestic wine—it accounts for 70 percent of on-premise wine, says Hood Crecca. And domestic beers are outpacing imported. “The biggest surge is the mention of ‘local’ on adult bar menus. It rose 363 percent from 2012 to 2013,” she adds.
Purchasing from local distilleries, breweries and wineries—and promoting it—is a selling point. “At The Pearl Gastropub, we use spirits from two Columbus, Ohio distillers—a rye and a bourbon,” says Ryan Valentine, director of beverage for Cameron Mitchell Restaurants, “and we engage with small producers in each market.”
6. Batching. Hand-crafted cocktails are all the rage, but some guests get antsy waiting 10 minutes for a custom drink. Batching cocktails is an on-trend solution. At M Restaurant, Valentine bottles a margarita-type cocktail that he carbonates with CO2 and caps. At service, the bartender just uncaps the bottle and pours. Holland also bottles cocktails and juices fruit in volume, five gallons a time. “It’s prep heavy, but people in Charleston don’t’ like to wait.” He adds that it takes a bit of experimenting to balance the flavors.
7. Cicerones. Sommeliers are rock stars, now it’s time for the cicerone—the sommelier of the beer world. At The Pearl Gastropub, the entire FOH team went through the Level I Cicerone Certification Program to become knowledgeable about the beer list, reports Valentine. The staff was also briefed on food pairings.
8. Soft drink mixology: Sales of fountain sodas and bottled carbonated soft drinks have been slipping, but that doesn’t mean fizzy drinks are history. Housemade and artisanal sodas created with fresh and/or premium ingredients are gaining share, according to Technomic. Chicago-based Tavernita has White Grape and Chile Ginger Ale on tap, and Ruby Tuesday is menuing Strawberry Fizz, hand-crafted with real strawberries and fresh squeezed lime.
“Producers and restaurants are carbonating tea and juice blends—any way to add more bells and whistles,” says Hayden.
9. Lemonade days. Old-fashioned lemonade is making a new-age impact. Mintel’s research indicates that lemonades are becoming more complex; mango, blackberry, cherry, strawberry and lime are some varieties showing up.
Lemonade as mixer is also a trend to watch. The Arnold Palmer—lemonade and iced tea—is soaring on menus. And the Shandy—a mix of beer and lemonade—is a summer fave.
10. Flavor rules. As we reported in “Flavor drives demand,” [Restaurant Business, July, 2013], today’s drinkers are flavor cravers. “Operators are responding by layering and doubling up on flavor,” notes Hayden. For example, Brio Tuscan Grille offers a White Peach Arnold Palmer, while Victor’s Cuban Café in New York City features a Mango Mojito. Millennials are the ultimate flavor cravers, so this trend has legs.
Q&A with Arsen Avakian
Founder & CEO, Argo Tea, Chicago, Illinois-based
What sets Argo apart?
Our goal is to change Americans’ perception of tea, so we travel to source the finest teas and create unique signature drinks—our “tea cocktails.” Acai berries come from Brazil and white tea from China; we use fruit juices and crushed berries—no flavorings. Three tenets guide our beverage development: smart calories, all-natural and real ingredients.
How does R&D come up with your signatures?
The three people on our team have a passion for mixology. Some ideas evolve in our kitchens, others through our travels. Our Jasmine Tea-Mosa—a blend of green tea, oranges and jasmine—came about through a visit to suppliers in Taiwan. They used oranges like we use lemons with tea and we translated it into an all-American beverage. We also encourage all our employees to contribute ideas.
What are your best sellers?
Our seasonal specials, which are available for a limited time at our 40 cafes. We try to catch a flavor that defines the season and run it for six weeks. Right now, it’s an iced Teana Colada—pineapple and coconut with chamomile tea and milk; for late summer, it is Hibiscus Ginger Ale with cardamom and fresh ginger—warm spices that foreshadow Fall.
Talk about your branded line of RTD bottled teas.
We developed these as a premium alternative to sodas. They’re sold in Whole Foods and a couple of fast-casuals, including Big Bowl and Wow Bao in Chicago. We now offer eight flavors. Two popular signatures in our cafes—Hibiscus Tea Squeeze and Hibiscus Sangria—were bottled teas first.
We see ourselves as an alternative to a bar—a cool place to experience well-crafted non-alcoholic drinks. Starbucks may be the PC in the beverage world, but we want to be the Apple.
33% of younger customers say that the beverage selection was “important” or “extremely important” in their decision to visit a restaurant or bar.
Iced tea has outpaced carbonated soft drinks in growth.
Lemonade increased by 27% on casual dining menus in the last three years.
Craft beer experienced double digit growth in 2011–12 in the Top 500 chains. Double digit growth is expected in 2013 as well.
Flavor expansion is boosting soda sales. While colas still dominate the market, strawberry soda has seen the most growth—19%—in the last three years.
Frozen coffee sales were up 11% from 2008-2011 and are expected to see another 11% jump from 2011-2014.