What’s brewing at beverage-centric concepts?

It’s not just drinks driving sales at coffee shops.
Photograph courtesy of Starbucks

top 500

They’re labeled “coffee cafes” in the Top 500, and while most consumers still stop by for a cup of joe, their menus have expanded way beyond coffee. And for good reason. Following Starbucks’ lead—No. 2 on the Top 500 with 8.3% sales growth—smaller players are stepping up their game. Creative breakfast items, savory and sweet snacks and trend-setting coffee and tea drinks are tempting customers to visit more often and often buy more than just a cup of drip coffee.

Coffee 2.0

While hot coffee drinks are still the beverage of choice at these concepts, consumption of cold brew grew by 36% year over year, according to Technomic Ignite menu data. The cold-brew craze started with chains making their own cold-press iced coffee. Then technology made it possible to offer nitrogen-infused cold brew on tap. Caribou Coffee (No. 136) was the first to debut nitro cold press, but now all the big players are serving it up. And expect to see even more nitro on display: High-tech, design-forward nitro cold-brew systems were showcased by a number of equipment manufacturers at the 2019 NAFEM Show in February.

Younger consumers are boosting the popularity of cold brew and iced coffee drinks. Technomic’s recent Beverage Consumer Trend Report found that 18- to 34-year-olds are building sales of these drinks. This demographic is also pushing chains to turn coffee into a better-for-you beverage option. Nondairy milks are a must-have, with menus touting the plant-based benefits of almond milk, coconut milk and the latest—oat milk.

Peet’s Coffee & Tea (No. 138) has taken health a step further, going in the direction of “food as medicine” with its Golden Caffe Latte. It gets its golden color from turmeric, an ingredient with anti-inflammatory properties. Peet’s extended the line with a Golden Cappuccino and Golden Cold Brew Fog Latte, as well as a Golden Matcha Latte, a drink that offers the antioxidant benefits of green tea along with turmeric. Several other coffee cafes are expanding their tea offerings to drive traffic among non-coffee drinkers and get with the health trends.

Thought for food

While coffee cafes are streamlining menus overall, food sales are a focal point of many brands’ growth strategies, Technomic revealed in its Bakery and Coffee Cafe Category Menu Insights report. Several concepts are innovating with breakfast sandwiches. Dunkin’ (No. 8)—which officially dropped the “Donuts” from its name to align more as a coffee brand than a snacks brand this past fall—has ramped up R&D with several new entries, including a Power Breakfast Sandwich featuring a veggie egg white omelet on multigrain bread and a Smoked Sausage Breakfast Sandwich. The chain also introduced the Dunkin’ Run snack menu, tempting customers with items such as donut fries and pretzel bites to get them in the door after breakfast and in late afternoon.

Source: Technomic Top 500 Chain Restaurant Report

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