Article

Beverage trends: Are you ahead of your competition?

There's a larger world to explore than sodas and sweet and unsweet iced tea.

March 4, 2016 by Travis Wagoner — Editor, Networld Media Group

A majority of QSR chains serve fountain drinks, but trends are changing, and it may be a good time to evaluate your beverage program. There's a larger world to explore than sodas and sweet and unsweet iced tea.

"I think more QSR operators will experiment with adult beverages following Taco Bell's testing of alcohol at select units and Starbucks serving wine and beer on its Starbucks Evenings menu," said Laura McGuire, editorial director of Technomic. "Adult beverages will also help QSRs better compete with fast casuals, many of which serve alcohol."

McGuire also believes that spiced and spicy beverages are another trend that will grow at QSRs over the next year, stating that fast casual operators already add heat to drinks through ingredients like jalapeño, Sriracha and cayenne, and this trend will start to trickle down to QSRs in the coming months.

Mindy Armstrong,director of Insights & Innovation at Food IQ, agreed, saying that although there are many exciting trends in the beverage category right now, tere's a lot of energy in specialized teas, playful lemonades, savory beverages, herbal flavors, better-for-you beverages and sour and bitter flavors.

"Tea is fully accepted by consumers and continues to penetrate menus across all cuisines," Armstrong said. "In a recent consumer poll, we found that Fruit Flavored Teas, Tropical Flavors and Tea + Fruit Blends fall into the top five most appealing options for consumers when thinking about tea. We've also been watching the evolution of savory beverages to include flavors and ingredients like herbs, shrubs, and spicy flavors from jalapeno and chipotle."

Plus, tea is trendier than ever, Armstrong said.

"Citrus is familiar, yet interesting, as we learn about more varieties, such as calamansi and yuzu, that we can experiment with on the beverage menu," she said. "Tea has a natural health halo associated with it and offers a neutral base in which you can build a program upon, whether it is an LTO program or an option to balance the beverage menu."

Armstrong also stated that according to Mintel Menu Insights, herb-flavored beverages and beverages with herb-flavored ingredients have grown 7 percent over the past three years. Additionally, Herbal Teas, Uniquely Flavored Teas and Floral Garnishes fall into the Top 5 most-appealing options for consumers when thinking about floral and herbal beverages.

Adding healhty drinks

Health is a hot topic for all segments of the food industry, and beverages are no exception. From low-calorie to natural sweetness, better-for-you beverages are ones to watch.

"According to Mintel Menu Insights, beverage menu item claims that have seen the most growth over the past three years include terms such as 'Fresh,' 'Dairy-Free,' 'Zero-Calorie,' and 'Gluten-Free,' " Armstrong said. "Sour and bitter flavors are increasingly palatable to consumers as our tastes continue to evolve and we seek new and exciting flavor experiences. Mintel Menu Insights claims that 'Sour' has risen by 200 percent over the past three years."

Dunkin' Donuts is seeing a trend toward more premium beverages, including in the coffee and espresso space, said Chris Fuqua, vice president, Dunkin' Donuts Brand Marketing & Global Consumer Insights & Product Innovation.

"Our recently launched Macchiato has been particularly popular among Dunkin' Donuts guests," Fuqua said. "It's a permanent part of our brand's menu, and can be customized with any of Dunkin' Donuts' sweetened or unsweetened flavors, including Caramel, Mocha and French Vanilla. The ability to personalize a beverage to a guest's liking has also been very popular, as consumers enjoy the ability to create a beverage all their own."

Customization is key to Sonic Drive-In's drink offerings, said Scott Uehlein, vice president of product innovation and development. The chain offers more than 1.3 million drink combinations, and all drinks are customizable to meet the needs and tastes of its guests.

"We see personalization and customization as a trend, especially with our brand and always making what our customer wants," Uehlein said. This is a trend across all of our foods, including drinks, and is especially appealing towards millennials. Drink options are a key differentiator for the brand compared to other QSRs – beyond the average soft drinks. We have black and green iced tea, our signature Limeades, Slushes and more. Drinks account for roughly 30 percent of Sonic's sales."

Another trend Sonic is seeing that consumers are attracted to classical beverages with a nostalgic taste. Sonic's customers have gravitated toward the chain's more sophisticated beverages that offer real fruit like fresh-squeezed lemons and real strawberries in the Slush and Limeades options.

"We continue to differentiate ourselves from other QSR’s by delivering customization, quality food and offering innovative menu options especially with our drink selections," Uehlein said. "We have new lemonades up our sleeves that we plan to launch later this spring. We offer unique flavor options made with real lemons and limes like Frozen Lemonades and Frozen Limeades."

What drives beverage trends?

For something to be trendy, there must be a reason for the trend.

"QSRs are continually trying to offer the most interesting and exciting beverages for their customers," McGuire said. "Often, that's returning a favorite such as McDonald's Shamrock Shake, which is now coming out for spring. It can also be more on the innovative side, such as Burger King's new Dr. Pepper Shake, which is a relatively simple idea but has generated a good amount of buzz for the chain."

There are also other factors at work; Armstrong believes that convenience, value, craveability and flavor drive beverage trends.

"Beverage in QSRs wears many hats by providing the opportunity to drive a visit, complement a meal, offer a snack or serve the need for an indulgent treat," she said.

For Dunkin' Donuts, Fuqua said that ideas for new menu beverages come from a range of sources and are inspired by beverage and flavor trends, guest and crew feedback, and popular culture.

"Our culinary, marketing, innovation and consumer insights teams are at the heart of both idea creation and evaluation," he added.

Sonic's Uehlein believes consumers’ changing tastes drive QSR beverage trends.

"Consumers are also becoming more open to new and unorthodox flavor combinations, allowing for more opportunity to get creative with innovative new products," he said. "Offering unique slush flavors like Blue Coconut and Green Apple while introducing candy additions is important to our guests and gives them a chance to try new flavors with each visit. The QSR industry will always need to offer a diverse quality of beverage choices to accommodate consumers' ever-changing taste preferences." 

'Tis the season?

Seasonality is something to consider when selecting beverages for your QSR. Hot chocolate, for example, would not be a big seller at a QSR in Nashville in July.

"The trends themselves are not necessarily seasonal — we tend to see a fairly even amount of seasonal beverages through the course of the year," McGuire said. "There has been some movement in recent years in terms of QSRs embracing seasonal ingredients when it comes to LTOs introduced throughout the year. In general though, we see lighter offerings and citrus flavors in the spring, cold refreshing ades and iced teas in the summer, pumpkin and autumn flavors in the fall, and more indulgent hot beverages in the winter."

Sonic, last summer,  launched a major Slush promotion for the second consecutive year, featuring 28 flavors made with real fruit, interesting flavors and iconic candy.

"The combination of 28 Slush flavors is simply something the competition cannot do," Uehlein said. "The Slushes are made with real candies mixed right in, including Nerds with rainbow candy, Jolly Ranchers and popping candy." 

Armstrong believes that a lot of beverages are a mainstay on the menu, while flavor trends are often seasonal in nature.

"This is due to several reasons: 1) availability and seasonality, 2) consumer acceptance, 3) menu relevance," she said. "Tracking and predicting 'what's next' vs. 'what's now' offers an opportunity to stay ahead of competitors while keeping the beverage menu interesting and exciting."

Dunkin' Donuts uses the fall and winter seasons to capitalize on its hot beverages.

"Special menu items that come with a certain time of year — whether it's Pumpkin coffee and Macchiato in the fall, or Sugar Cookie, Snickerdoodle and Peppermint Mocha coffee and Lattes during the holidays — give us a chance to have a little bit of fun and to introduce beverages that will play into our guests' associations with certain traditions and seasons," Fuqua said.

For Sonic, from a business perspective, seasonal and limited-time offer menu items keep customers coming back to try new things.

"By offering Limited-Time Offers and seasonal products, it allows us to appeal to new customers across different day-parts, and also allow us to bring existing customers back to try new and innovative items," Uehlein said. "The secret to our success has been staying true to our roots and brand identity as we have grown."

About Travis Wagoner

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Travis Wagoner spent nearly 18 years in education as an alumni relations and communications director, coordinating numerous annual events and writing, editing and producing a quarterly, 72-plus-page magazine. Travis also was a ghostwriter for an insurance firm, writing about the Affordable Care Act. He holds a BA degree in communications/public relations from Xavier University.