- WHITE PAPERS
While some quick-service restaurant chains – such as Bojangles and Chick-Fil-A – have long flaunted their southern roots by offering sweet tea as a staple, most are just now starting to catch on to the beverage’s appeal.
Although tea is the third-highest selling drink at QSRs, behind iconic burger mates soda and shakes, it still has plenty of untapped potential.
According to the National Restaurant Association's 2010 Restaurant Industry Forecast, specialty iced tea is the No. 1 nonalcoholic beverage trend.
"Tea is still considered an undeveloped market, with an emphasis on sweet tea. Since McDonald's has expanded its $1 sweet tea (beginning in 2009), the usage has increased and the demand is also increasing, creating opportunity for other restaurants to satisfy the need and craving," said Darren Tristano, executive vice president of Technomic Inc., a foodservice consulting firm. "The increase of tea options is very likely at QSRs."
Cool beverage, hot trend
Mintel Menu Insights' 2009 Menu Innovation Report is consistent with this prediction, concluding that iced tea beverages – especially those with fruit-inspired flavors – are a "hot trend" within the QSR industry. The tea market reached $3.9 billion in 2009 and Mintel's forecast calls for a 53 percent increase from 2008-2013.
Since McDonald's introduced sweet tea and fresh brewed ice tea, it has sold more than 1.5 billion cups.
"That’s enough tea to fill more than five Olympic-sized swimming pools weekly," said Danya Proud, senior manager, McDonald's U.S. Media Relations. "Our business decisions are based on what we hear from our customers. Sweet tea is now available in the majority of McDonald's U.S. restaurants and the response has been overwhelmingly positive."
Other chains that have embraced this demand include Arby's, with its Iced FruiTea line, including mandarin peach, passion fruit, diet peach and diet blackberry flavors; Sonic's sweetened, unsweetened, raspberry, peach and cranberry flavored teas; and Jack in the Box's mango, peach and raspberry teas.
Jack in the Box also added Coca Cola Co.'s Gold Peak to its menu this year, offering yet another dimension for its thirsty customers.
"We have always emphasized the importance of providing fresh-brewed iced tea and have realized a great deal of consumer loyalty with our tea program," said Brian Luscomb, corporate communications vice president at Jack in the Box. "With the introduction of Gold Peak, we saw a new premium tea as a way to bring excitement to the beverage category. We were the first QSR to offer this brand in fresh-brewed form which delivers a much more natural and refreshing flavor."
Burger King followed suit and added Gold Peak earlier this year. Also as part of its contract with Coca-Cola, Sonic introduced its "Ultimate Drink Machine" in the spring, which will infuse new flavor options into its green tea. The machine's national roll out will be complete by the end of 2011.
Popeyes Louisiana Kitchen took a proprietary approach to the game, introducing its own "Cane Sweeeet Iced Tea" in May. Alicia Thompson, vice president of communications and public relations for Popeyes, said the timing of the launch made perfect sense.
"I think anyone in the QSR segment who has been watching trends realizes the tremendous opportunity for beverage growth globally, and tea is a hot concept that consumers want," Thompson said.
Thompson adds that the product's sales are off to a great start, notably because it complements the food.
"We developed this blend deliberately to tie in with the flavor and spicy-ness of our food. Tea is such a cooling and refreshing beverage and it's the perfect fit for our menu," she said. "Additionally, it will help drive our innovation and creativity and put us in a better position. As more chains look to add beverage variety, those who are not are going to be left behind."
Health, variety factors
Mintel's report studied why consumers are demanding tea, and 77 percent answered "taste." Tea offers a compatible canvas for fruit-flavored infusion, giving consumers a greater selection than traditional soda choices.
"Offering a variety of flavor options is important if you want to increase your beverage incidence. This prompted us to introduce our line of flavored iced teas last summer, and we continue to expand the availability of our sweet tea," Luscomb said.
Additionally, almost half of Mintel's respondents said they prefer tea because it is a healthy alternative to other beverages.
Subway added Fuze iced tea to its U.S. menus in 2009, issuing a company statement saying the product – owned by the Coca-Cola Co. – is compatible with Subway's platform, as it contains antioxidants and vitamins.
"As consumers are shifting their behaviors, it's essential to offer healthier options," Luscomb said.
Full steam ahead
The future for tea certainly looks strong, no doubt with some help from the increased QSR inclusion. The Tea Association of the USA, Inc. recently released a report predicting an accelerated increase in foodservice tea sales throughout the next five years.
Cinnabon plans to jump on board soon as it is currently testing iced tea blends to add to its newly revamped menu, and chains that offer Gold Peak may get a boost from Coca-Cola's new Flex Fresh equipment, which can brew more than 50 different kinds of iced tea.
"The tea category will continue to exhibit a high level of growth. More importantly, tea seems to be reaching a much younger audience than it did in the past," Luscomb said. "It is reasonable to assume that tea has staying power on QSR menus."