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The benefits of a strong specialty beverage program

6 min read

Restaurant and Foodservice

Thays Morgan, senior manager for strategy, planning and development for the full-service restaurant channel at Coca-Cola

This post is sponsored by Coca-Cola.

Specialty beverages offer foodservice operators a low-cost way to drive margins, differentiate themselves from competitors and satisfy consumer needs.

Using ingredients they are likely to already have on hand, operators can generate excitement around the menu and raise their check averages with a variety of offerings that strengthen their own brands.

Specialty beverages are among the fastest-growing categories in foodservice, and their multifaceted nature can speak to consumer preferences for both health and indulgence, and also allow for personalization and customization.

We talked to Thays Morgan, senior manager for strategy, planning and development for the full-service restaurant channel at Coca-Cola’s foodservice division, about how operators can leverage specialty beverages to grow their business.

Why are specialty beverages so important to foodservice operators?

When we look at the specialty beverage categories — teas, lemonades, limeades, shakes, smoothies and even sparkling sodas and specialty sodas — they are forecast to have double-digit growth over the next five years. We’ve done some work with Mintel to understand the growth, and based on Mintel’s projections, it will account for 20% plus of foodservice beverage growth over the next three to five years. That’s one of many reasons specialty beverages are important for foodservice operators.

From a consumer standpoint, they are looking for variety in flavors, and variety in ingredients. This presents an opportunity for operators to meet consumer demand and to offer something that’s innovative and experiential.

How can operators use these products to generate customer excitement around the menu?

There are several operators in the marketplace who are leveraging specialty beverages to differentiate themselves from others in terms of presenting specialty beverages that leverage existing ingredients in-outlet, and put a new spin on the ingredients. Many operators still believe that specialty beverages require high levels of customization and high labor costs, but in many instances, there are opportunities to innovate and create signature new offerings that will meet consumer demand.

Many operators have the basic beverage ingredients for smoothies, shakes, teas and lemonades already on hand, and there’s an opportunity to layer in other items to create that specialty element.

This “premiumization” will create buzz with consumers, and also satisfy customers who want something different when they dine out. Layering new ingredients into specialty beverages fills that need for a reward that they might not get in an at-home dining experience.

What are some of the other benefits of having a dynamic specialty beverage program?

One, it drives beverage incidence, especially when operators are struggling to increase their check averages. Two, the margins on specialty beverages are very strong. It also provides an opportunity for operators to differentiate themselves and their beverage offerings from their competitors.

From a consumer standpoint, the benefits are the customization, the premiumization, and the personalization of their specialty beverages. Those three are critical elements, which appeal to consumers seeking a variety of flavors and ingredients, including healthier options that specialty beverages bring.

What are some examples of the types of specialty drinks that restaurants can create?

There’s growth in smoothies, shakes, teas, lemonades and limeades, but the bulk of consumption is still with carbonated soft drinks, or sparkling soft drinks, so integrating these various ingredients is really key to creating excitement and the development of a specialty beverage program.

In our research we looked at the attributes that consumers considered important when defining specialty beverages, and it varied based on the category we were looking at. Some of the ingredients people identified were real fruit, and when we asked about smoothies and shakes, people talked about ice cream being added.

There’s a healthier-options element, but also an indulgence element. That’s where the operator really needs to understand who their consumer is and what their offering should be.

I think that lends itself to where we at Coca-Cola can provide some turnkey solutions for operators with the recipe box that we have on our Coke Solutions site. They can also go through their contact at Coca-Cola, and work with our culinary and mixologist partners who could be a resource in helping them develop some signature specialty beverages.

Describe some creative ways operators can add these drinks to their menus to drive increased sales and profits.

There are a variety of ways to market and communicate specialty beverages, from having a separate beverage menu, to more traditional ways like table tents and posters. Operators can also leverage crewmembers to be true ambassadors for their specialty beverage program, and highlighting specialty beverages that may link back to different meal items.

Another approach beyond core communication would be to incorporate some seasonality. We see that coming into play where tea can be leveraged not only in the spring and summer, but also as a hot beverage in the colder months.

Operators can also create specialty beverages that link back to specific holidays, such as Valentine’s Day or Mother’s Day. This is where some creativity comes into play — not just using specialty beverages as a one-time offering, but continuously throughout the year.

What resources does Coca-Cola offer to help operators build and maintain a strong specialty beverage program?

We have extensive research, and we have insights related to flavor trends and beverage trends that they can leverage. We also have different marketing programs that may be available to them, which enable them to create a strong specialty beverage program.

We are a one-stop shop in that we can provide both insights and marketing resources. Beyond the research and tools that we have, at Coca-Cola we have the portfolio to offer them the right brands and the right products, and consumers in research have identified brands as playing a key role in their path to purchase specialty beverages.

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