For restaurant operators, it’s a given that iced tea is the most-profitable non-alcoholic beverage they can sell. However, the operators who sell the most iced tea don’t take it for granted—they know the brand power of a premium, fresh-brewed iced tea, and they know that when guests don’t see their favorite beverage brands on the menu, they often default to ordering tap water.
It’s no secret that quality is extremely important to consumers today. In fact, research shows that consumers have a clear preference for iced tea that is fresh brewed rather than prepared from concentrate1, and great-tasting, fresh-brewed iced tea sells again and again. There might be only a few cents of cost difference between a glass of premium, fresh-brewed iced tea and a glass of ordinary iced tea, but the former is vastly more appealing. Operators can cover the additional cost of the premium product by selling a few more glasses; the subsequent glasses sold result in incremental profit.
For example, suppose an operator sold an additional glass of premium iced tea to just one in four customers per day. If the daily customer count is 200 and a glass of iced tea is priced at $2, the result is an additional $36,500 in sales per year. Multiply that by a gross margin of around 95 percent, and it’s easy to see how repeated iced tea orders send dollars to the bottom line. Of course, this is only possible if customers enjoy the taste of the iced tea that’s on the menu and choose it over other beverages.
Today, it’s more important than ever to have a great-tasting, high-quality iced tea. In 2012, Americans consumed more than 79 billion servings—or over 3.6 billion gallons—of tea, about 85 percent of it iced, according to The Tea Association of The USA. For a growing number of consumers, fresh-brewed iced tea is the lighter, tastier and healthier alternative to sugary carbonated soft drinks, which have been declining for years. Total U.S. carbonated soft drink volume is now back to where it was in 1995, according to the trade journal Beverage Digest. Operators can sell premium, fresh-brewed iced tea at the same price points as soft drinks, yet come out ahead in profit because iced costs operators much less.
To get the most out of an iced tea program, operators can partner with a company that is an expert in tea and committed to helping operators grow their businesses. Lipton® is the brand preferred 2-to-1 by restaurant patrons and more than half of iced tea drinkers are more likely to visit a restaurant that serves Lipton®, according to research by Ipsos InnoQuest2. Additionally, research by the NPD Group found that consumers are willing to pay up to $0.65 more per glass of iced tea if the brand is Lipton®. The bottom line is, Say It’s Lipton®, Sell More Tea.
1. Technomic Consumer Iced Tea Segmentation Study, December 2009.
2. Ipsos InnoQuest, August 2012.
This post is sponsored by Lipton®