NRN senior food editor Bret Thorn says lemonade, iced tea and iced coffee are the hottest beverages right now.
Nancy, we’ve discussed many topics related to the foodservice industry over the years, but an entire highly profitable and tasty area that we have neglected is beverages.
Now that summer is upon us and people are looking in earnest to quench their thirst, I think it’s time to right that wrong.
I’d like to stick with nonalcoholic beverages, if I may.
To sell them, restaurateurs are in a constant struggle to convince their guests to trade up from free water to, well, anything else. That’s not easy. Sales of classic sodas have been declining for years, and restaurateurs tell me that they need to offer something to their guests that they can’t get elsewhere if they’re to be expected to fork over extra cash.
One of the current heroes in the soft drink world is lemonade. Americans ordered 1.4 billion servings of that drink in the year ended April 30, 2015, an increase of 3 percent from a year earlier, according to research company The NPD Group.
I always think of lemonade as a refreshing summertime treat, but actually people drink it all year round. NPD found that, while 2.6 percent of summertime foodservice orders include lemonade, that figure only drops to between 2.3 percent and 2.4 percent during the rest of the year.
Some of the country’s biggest chains have caught on. In May, KFC added Dole Classic Lemonade as a permanent addition to its menu, available in regular and strawberry flavors, and for the summer Wendy’s is selling lemonade with blackberry purée added to it, giving it an extra health halo.
Cinnabon recently made a similar move, bringing back its seasonal Wild Berry Medley, a combination of strawberries, raspberries, blackberries and blueberries, that can be added to the chain’s frozen lemonade.
Pretzel specialist Auntie Anne's often offers peach lemonade in the summer, and this year it also introduced regular Limeade and Cherry Limeade for the season.
Chick-fil-A’s lemonade has long been a popular seller, and it recently found a new use for it by mixing it with its vanilla soft serve for what it calls Frosted Lemonade.
Some other restaurants are getting a bit fancier, like Native Foods Café, a 26-unit chain based in Chicago, which offered a strawberry lemonade, available from April through July, that also has lavender and sea salt in it.
Iced tea is also a popular choice, and it can be a huge draw. Carin Stutz, CEO of McAlister’s Deli, recently told me that at her top-performing restaurants the chain’s signature sweet tea can be included in half of all orders, which is astounding.
Stutz said the chain has also experimented with green tea, which has been a top recommendation of health fad gurus for some time now. McAlister’s has had less success with that than its regular tea, but other chains are giving it a try, too.
Dunkin’ Donuts launched green tea last year in flavors such as Blueberry, Raspberry and Peach, and Tropical Smoothie Café offered a Citrus Green Tea that blended the tea with orange, lemon and basil.
In May, Wendy’s introduced Honest Tropical Green Tea. It features Fair Trade Certified organic green tea, Fair Trade Certified organic can sugar, mango and pineapple flavors in a blend created exclusively for the chain.
For the summer, Wendy’s is mixing that tea with pineapple juice, pomegranate juice and blueberry purée for its Blueberry Pineapple Fruitea Chiller. Similarly, its Orange Mango Fruitea Chiller has mango purée, orange juice and a splash of carrot juice shaken with the proprietary green tea.
Then there’s coffee, America’s favorite hot beverage, which is growing in popularity in its iced form. Thirty-two percent more restaurants offered iced coffee in 2014 than in 2005, according to Datassential. Although many quick-service restaurants, from Taco Bell to Bruegger’s Bagels, are adding new varieties of flavored coffee, fewer people are drinking flavored coffee. According to Dan Cox, president owner of Coffee Analysts, a testing lab based in Burlington, Vt., about 42 percent of coffee drinkers drank flavored coffee five years ago, but that figure is now around 33 percent.
Instead, people are drinking better, unflavored coffee. In the realm of iced coffee, cold-brewed coffee, made by soaking ground beans in cold water for many hours, is a growing trend. Its fans, which include yours truly, say it tastes richer and less bitter than conventional iced coffee. Starbucks introduced it to 2,800 locations in the Northeast, Mid Atlantic and Midwest, as well as in some Canadian cities, earlier this year. Since then it has rolled it out across North America, and I can tell you their New York City restaurants run out of it more often than I’d like.
Chick-fil-A, which upgraded its coffee last year and is now the only quick-service chain to serve coffee that fits the criteria of the Specialty Coffee Association of America, serves cold brew iced coffee systemwide.
Those are the big trends I see in nonalcoholic beverages. What’s on your radar, Nancy?
A sea change for beverages
The following is Kruse Company president Nancy Kruse’s take on nonalcoholic beverage trends.
I’m glad you brought this subject up, Bret, because I’ve been watching with great interest as the beverage category undergoes a real sea change. As you point out, conventional soft drinks have been in steady decline — we chugged down 7 percent less regular soda last year, according to The NPD Group — and the diet versions are seriously sinking, too, as consumers reject artificial sweeteners in droves. These rather stunning reversals to the stalwart carbonated-soft-drink category have threatened margins and amped up innovation. Restaurateurs have stepped up to the plate, and my take is that they’re creating their beverage offerings in sync with their food menus.
There’s a pronounced emphasis on better ingredients, for example, which very often means fresh fruit. You’ve pointed out a number of examples, to which I’d add quaffables like IHOP’s Splashers, which start with a base of lemonade or lemon-lime soda and then add seasonal fruits like blueberries and watermelon. Fruits have become real go-to ingredients for beverages as diners embrace their healthful sweetness and operators score points with fresh, seasonal add-ins.
This isn’t new, but it does seem to me that it’s picked up considerable steam of late. What is new and much more surprising is the widespread adoption of pure cane sugar as an alternative to the refined white stuff, which has been well and truly demonized. Chick-fil-A’s scratch-made, signature Lemonade and Popeyes’ Cane Sweeeet Iced Tea tout its use. Then there’s the sort of off-kilter appearance of Mexican Coca-Cola in American markets, a product that is distinguished from its domestic counterpart by its use of cane sugar. Several analysts have pointed out that consumers seem to view cane sugar as a kind of health food, a wonderfully nonsensical example of the extent to which we’re willing to rationalize our choices, logic be damned.
There’s also a marked trend toward hand-crafted soft drinks in line with the larger embrace of artisanal foods of all kinds. Hot Lips Pizza in Portland, Ore., has garnered praise and awards for its eponymous soda line that uses local and seasonal fruits like marionberry, black raspberry and pear. The five-unit company notes that its desire to brew its own soda line coincided with the discovery of an old bottling machine from the 1960s, and the rest is history. In Chicago, Eleven Lincoln Park offers hand-crafted, barrel aged root beer, while Wao Bao’s six locations promote a popular homemade ginger ale with real ginger. Pomegranate is available as a mix-in.
But it’s not just smaller operators who’ve embraced their inner soft-drink maker. Sonic Drive-Ins, which runs one of the most consistently innovative beverage programs on the planet, continues to push the envelope, as witness the new line of energy drinks infused with “natural energy, antioxidant vitamin E and other essential vitamins” and available in varieties like Energy A.M., an orange energy drink made with real strawberries and lemons. Sometime back, Ruby Tuesday launched its Zero Proof line, which consists of hand-crafted, made-to-order seasonal sodas like the Apple Cider Fizz, which boasts chunks of orchard apple and a finish that’s crisp and sweet. It’s a nifty and nonalcoholic way to connect with the burgeoning hard-cider craze.
It’s also a cool way to tap into another trend, which is the continuing allure of sparkling drinks. We like beverages with bubbles. This is true of the bar business, and it’s true of the soft side, too, as patrons embrace the fun, festive nature of sparklers. Most of the beverages mentioned above are carbonated, and new ones continue to come on stream. Last summer, Starbucks launched Fizzio’s Handcrafted Sodas line that includes sippers like Orange Cream and Lemon Ale. Red Robin, no slouch in the drink department, menus cream sodas in flavors like raspberry and orange that require a bit of audience participation. Diners are invited to stir in the whipped cream on top for a hands-on, appropriately creamy finish. And at the aptly named Spritz Burger in Chicago, pastry maven Gale Gand had a hand in making syrups that are combined with seltzer spritz tableside to yield sippables like Mandarin Orange with agave and herbes de Provence and Berry Mint with red berries and lemon zest.
So here’s looking at you, Bret. There’s no question that the ground is shifting in the beverage market, as Coca-Cola USA’s recent, extraordinary incursion into the milk market clearly illustrates. Given this fluidity, it will be interesting to see what the future holds for beverage bills of fare.
Contact Bret Thorn at [email protected].
Follow him on Twitter: @foodwriterdiary
Nancy Kruse, president of the Kruse Company, is a menu trends analyst based in Atlanta and a regular contributor to Nation’s Restaurant News. E-mail her at [email protected].